Service Transition Strategies in Service-Dominant Settings: Towards Comprehensive Financial Services in SME Markets

In recent years, firms across markets and industries have sought to grow beyond their traditional core business by developing ancillary service offerings and value-added solutions. However, in practice, knowledge on the transition from stand-alone products/services towards more advanced solution offerings that meet customer needs is vague, especially in service sectors. The objective of this research is to create new knowledge on the application of service transition strategies within service-dominant settings with respect to the customer-provider relationship. The focus is on the financial services industry. The research objective is divided into two research questions taking different perspectives of the phenomenon: the providers’ move from basic services to more advanced ones, and their business customers’ response to these more advanced offerings as opposed to stand-alone services. The research questions are studied through four scientific publications that rely on an integrated theoretical approach and a qualitative research orientation. In terms of empirical material, interview studies and case studies are used as the primary research methods. The results suggest that the transition strategy dimensions of service extension and relationship focus are increasingly utilised among financial service providers. Simultaneously, the evidence shows that the integration of various components within the comprehensive offering still seems to be in its early stages. This finding indicates that service providers rely mainly on a pure component strategy in the provision of comprehensive financial services. As business customers fail to perceive the benefits of purchasing pure component-based comprehensive offerings (the main limiting factors are the absence of customer loyalty programs, unfavourable pricing and image conflicts), they seem to follow price-based purchase behaviour and negotiate their service offering with many different service providers. The main contribution of this research lies in showing that even as service providers are advancing in many frontiers of service transition, they are not succeeding in integrating services into effective solutions that meet business customer needs. This suggests that service providers are yet to achieve the ultimate service/solutions position. Service providers appear to consider comprehensive offerings mainly as an attempt to cross-sell new services to business customers, rather than a new means to solve customer problems or make life better or easier for customers – factors identified as the main outcomes of “true” solution offerings. Therefore, an important contribution of this research is the identification of factors affecting the customer-perceived value of purchasing comprehensive financial services in SME markets.