Customer needs: Search for comprehensive

In developing the basic services, customer needs were, to some extent, taken into consideration in all cases. However, customer contributions to portfolio development were rather scarce with relation to the rich and versatile knowledge that

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customers were found to possess. In general, all focal firms had a relatively accurate overall conception of their customers’ needs for the currently offered basic services. That is, their understanding of why customers purchase services and what are the main benefits achieved was not overly conflicting with the views of the participating customers. Nonetheless, interviews with customers offered a more elaborate and comprehensive picture of their needs than what the service providers expressed.

In all case companies, a vast majority of the interviewees on the focal firm side considered their understanding and utilization of customer needs somewhat incomplete. The interviewees noted that their understanding of the customer needs was not as good as it probably could be. For example, half of the interviewees from the focal firm of DEVICE explicitly noted that they do not have a full understanding of what their customers value. As an example, one interviewee pondered:

What is it really that the customer (…) is ready to pay for? (…) What is it that they want? Often, they are interested in many things but then in the end are not ready to pay for it (product group manager, AF4, DEVICE).

The same concern, not having a comprehensive picture of customer needs, was shared by a majority of the interviewees of the other two focal firms. Within the focal firm of FLOW, service development was not usually based on systematically gathered customer knowledge but more on the assumptions or occasional discussions with particular customers. The focal firm of SCALE, in contrast, had awoken to the fact that their understanding of customer needs had become obsolete over time. Consequently, the firm had invested time and effort in improving their customer understanding, for example, through a customer survey.

We have invested in understanding customers (…) those old thoughts and expectations about what customers want (…) they did not necessarily correspond to what is the current state (CFO, AF5, SCALE).

Nevertheless, the understanding of the customer needs was still regarded as inadequate by a majority of the focal firm interviewees in the case of SCALE.

All participating customers in the cases of DEVICE and FLOW provided both versatile and elaborate descriptions of why they purchase basic services and what kinds of benefits they look for. In the case of FLOW, customers were less focused on the basic services and less attention was paid to the issue.

First, a majority of the customers expressed a need for service-specific expertise that was sought by taking advantage of external service providers. This type of

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expertise was mainly considered as non-core expertise that the customer companies neither possessed nor wanted to acquire by themselves. Therefore, it was justified to seek it from outside.

Without question, we start with that they [focal firm] have the expertise to the services and their development, we don’t have that expertise and we don’t keep it up (procurement director, CC5, FLOW).

Many customers also pointed out that service providers can have the kind of exclusive expertise that was not easily available from elsewhere.

We assume (…) that the suppliers know best about their own devices and device life- cycles (maintenance manager, BC6, DEVICE).

Furthermore, a few customers remarked that the focal firms offered access to some other services and/or products that they sought. For example, a service provider could offer services to similar equipment of other suppliers’ devices or to some other type of equipment. In addition, trainings and technical support was discussed by a few customers.

Second, an overwhelming majority of customers expressed the need for not only services and service capabilities but also the qualities of the service providers. These included local presence and availability of resources, overall flexibility and adaptability to customer needs, references, and perceived price-quality ratio.

Experience and capability (…) definitely that it [service provider] can take up the flexibility challenge. The level of costs is of course important (…) Is it of uniform quality? (vice president, CC2, FLOW).

Moreover, the generic qualities for service providers that are not only related to basic services were highlighted by a majority of the interviewees. These generic qualities included, for example, a sufficiently big company size, financial standings of the service provider, and management of the health, safety, and environment (HSE) issues.

Third, variation in customer needs emerged as a focal issue. The interviews demonstrated that the needs of some participating customers varied over time and between different service/product groups. For example, some customers emphasized that they have different needs and criteria for different services offered by the focal firm. Consequently, if the delivered services were related to customers’

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different functions or equipment, the customers specified their needs for the particular purposes or pointed out what is more critical and what is possibly less critical.

[Outgoing] parcels can still be on stand for a day, but if the incoming flow halts then it shows instantly (procurement director, CC5, FLOW).

Another example was the differing needs for reactive maintenance (i.e., repair) and periodic maintenance services. According to a few customers, the OEM expertise was highlighted in periodic maintenance, whereas in repair services, the response time was the most important criterion. Thus, these customers favored smaller, local service providers instead of OEMs. A particular customer also pointed out that they are much more dependent on the services of the focal firm when there is a newly installed product. However, the need for OEM support decreases as their own maintenance organization gets familiar with the particular product over time.

In the very beginning, we are totally depending on them. But then, of course, we have our own upkeep or maintenance organization (…) which learns that (…) Then the criticality decreases (manager, production development, AC5, SCALE).

In addition, a few customers stressed the possibility to procure additional services from the focal firms when needed, for example, when there were occasional needs for additional resources owing to a larger maintenance shutdown, a high volume of orders, or some temporary arrangement like a layout change in the factory.