Purpose – The purpose of this study is to identify the impacts on transaction costs from marketing management by service design thinking.
Approach –The article is based on the case study of “enkla vardagen”; a project implemented by service design consultants contracted by the Swedish multinational bank SEB. By applying desk research and interviews the study intends to find out whether identified impacts on costs are transaction costs and how other costs were affected by the use of service marketing management by service design thinking (SDT). The hypothesis is that SDT reduces transaction costs.
Findings – The empirical evidence shows that from the perspective of the bank, savings in transaction costs included reductions in uncertainty, which enabled them to reap the long-term savings in transaction costs by conversion of high cost customers to low-cost contracts. However, there were increases in other costs. These were one-time and it is likely they are lower than the savings. In addition, customers saved transaction costs in terms of one-time efforts and lower commission costs. The implication of the case study is thus that SDT saves transaction costs.
Social implications – There is keen competition within the banking sector implying service provides have incentives to satisfy end-users’ needs. The incentives are expected to be different for organisations acting in a non-competitive environment, e.g. public sector organisations. In these environments design thinking may not even be considered. Lacking competitive pressure, public sector organisations in charge of developing e-government services might, therefore, choose solutions that are less able to provide end-user friendly designs and, therefore imply higher transaction costs both within the organisations and for users. As the public sector is financed by tax money, the matter is both of public interest and of citizen-level concern.
Originality – The contribution of this article is about linking service marketing management by design thinking to transaction costs. Earlier studies have analysed the impact from information and communication technology (ICT) on transaction costs, while this study focuses on the service marketing management perspective. To the knowledge of the authors, there are no previous studies that connect service design thinking to potential impacts on transaction costs.
5th International Research Symposium on Service Management, Pärnu, Estonia, June 8-12, 2014.