Customer-Perceived Value and Its Components in Industrial Scale Circular Business Models: Comparison of Recycling and Reuse Settings Through a Multiple-Case Study

Driven by growing environmental pressures, recent years have witnessed a powerful business transition towards the circular economy (CE) – an economic system regenerative by design that strives to conserve resources by narrowing, slowing, and closing material and energy loops. At the same time, the business customers’ experiences and expectations are also in transition due to the new types of offerings and interactions brought forth by the CE, as well as the growing demands for sustainability, internally and/or from stakeholders’ side. While the research on CE has generally bloomed, the customer perspective has so far been nearly absent in the literature. Especially the ways that business customers perceive value in the CE have been neglected, and no suggestions for classifications of customer-perceived value for the CE have been made. This leads to a situation where providers have troubles to develop and market circular offerings ac-cording to customers’ preferences, which would be needed to accelerate the circularity transformation. Thus, the objective of this study is to identify the components of customer-perceived value in the CE, investigate how they behave with different types of circular business models, and explore what parts of customer-perceived value the providers still have difficulties to recognize.
To meet the research objective, an explorative multiple-case, cross-industry study with dyadic data collection was carried out. Case selection process was twofold, starting with a careful mapping of potential cases. In the end, innovative circular offerings from the fuel, workwear, lifting, and tools industries were selected. The cases represent three distinct categories of circular business models (recycle and reuse with transferred and retained product ownership) to enable a comparative analysis. The primary data consisted of provider and various customer interviews for each case and was supplemented by multi-sourced secondary data. A comprehensive literature review on earlier customer value research was also conducted and all the gathered data utilized in an abductive thematic analysis with the help of qualitative analysis software Atlas.ti.
The findings reveal the five main components of customer-perceived value in the CE (economic, product performance, service, symbolic, and ethical value) as well as the 16 subcomponents that these consist of. The constructed classification and the discussion demonstrate what kind of value is critical for industrial scale CE customers and where negative value perceptions may be created. The comparison analysis shows that economic customer value is highlighted in reuse context, whereas symbolic and ethical value are more critical in recycle context. Finally, the study reveals issues that providers have difficulties to grasp when interpreting customer-perceived value, related to for example offering’s lifetime costs, infrastructural fit, or suitability to be sold as a service.
The study fills an important gap in the intersection of CE and customer value research streams. From a practical perspective, it gives managers robust tools for understanding what their customers value in circular business, how that value is structured, and how to avoid some typical pitfalls of interpreting the customer perceptions according to the type of business model. For customers, the results can serve as a tool for systematic supplier evaluation. In the future, the findings could be reviewed by conducting customer-centered studies with larger samples as well as by investigating the effect of customer-specific characteristics on value perceptions. The interconnectivity of value components and the dynamics of temporal change in value perceptions would also be important research avenues towards a full understanding of customer-perceived value in the CE.