Paper info

Customer Involvement in New Service Development in Financial Conglomerates

Irinja Maenpaa and Jesse Valtanen

The paper was published at the 27th IMP-conference in Glasgow, Scotland in 2011.

ABSTRACT
Given today’s industry dynamics, new service development is becoming increasingly
important to the competitiveness, growth and survival of organizations. Customer
involvement has been advocated as a potentially powerful tool for developing successful new
services. Even though customer involvement has been studied broadly in the financial
industry, little has been done in the context of financial conglomerates.
The purpose of this study is to evaluate the potential of customer involvement in financial
conglomerates by answering the following question: how are user involvement activities
taken into consideration in the new service development process in financial conglomerates?
The user involvement activities are described in terms of objective, type of customer, phase,
intensity and mode of involvement. The research builds on literature on financial conglomerates
and customer involvement in the new service development process.
The research was conducted as a qualitative multiple case study among two large financial
conglomerates within one country. The data was collected through ten in-depth interviews
among key informants in the case companies banking, life insurance and property-casualty
insurance units. As the interviews have been conducted very recently, we are still in the process
of analysing the results. For now we can only indicate some findings of the research.
Based on our preliminary results, it seems that financial conglomerates understand the
potential benefits of customer involvement in new service development processes and some
types of customer involvement activities have been performed within our case companies.
However, it seems that there is lot of potential to improve the daily practices related to
customer involvement Identified problems in the involvement activities include the difficulty
of creating customers the right incentives to participate in the service development processes
and the challenge to interpret the output of customer involvement clearly enough to
implement required actions in the development process. In addition, the co-operation between
bank and insurance company seems to be quite rigid, as the service development processes
are not integrated. This complicates customer involvement in the processes.
The main benefit of this research for financial services providers is the opportunity to analyse
their existing new service development processes from the viewpoint of customer
involvement activities and to gain valuable insight on how to employ customer-orientation
within the new service development processes.
Keywords: New service development, financial services, financial conglomerate, customer
involvement