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Getting customers to accept new digital business models

When the customer sits on a seat heater but is unable to use it: One of the topics marketing researcher Janina Garbas explored in her doctoral thesis was how customers respond to product upgrades. It earned her a place as a runner-up in two of the most prestigious science awards. By Kathrin Haimerl

Symbolic photograph: Colourbox.

After-sales – This term sends companies into raptures. In the age of digital business models, the idea behind after-sales services is to give businesses the opportunity to make money after they have sold a product through post-purchase add-ons for customers. The automotive industry, in particular, sees enormous potential in this novel business model.

As an example: The new car has a heater built into the seat. However, customers only get to use it if they request a product upgrade, i.e. if they add this option after the initial purchase by paying a fee. "How does it make customers feel if they're literally sitting on the seat heater but don't get to use it yet?" asks Dr Janina Garbas, former doctoral student at the University of Passau's Chair of Marketing and Innovation and postdoc at RWTH Aachen University since April 2022.

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The researcher analyses questions like this one and others in her doctoral thesis entitled "From Now to Next – Three Essays on Consumer Responses to Innovative Technology-Driven Business Models". As one of three finalists, she presented the insights of her main essay entitled "You want to sell this to me twice?! How perceptions of betrayal may undermine internal product upgrades" to the jury at the annual conference of the European Marketing Academy (EMAC) held in the Danish city of Odense in May and came second in the "EMAC-Enginius Doctoral Competition 2023" for early-stage researchers. In June, at this year's "Frontiers in Service" conference in Maastricht, the jury of the "SERVSIG Best Dissertation Awards in Service Research" announced that they had selected her as a finalist as well. EMAC is Europe's most important professional society for marketing theory and research. The "SERVSIG Best Service Dissertation Award" is one of the world's most reputable awards for early career researchers in services research.

"At that level, the going gets rather tough. So, making it that far is a tremendous achievement," says Professor Jan Schumann, Vice President for Research at the University of Passau, who supervised the doctoral thesis at his Chair and helped develop the topic jointly with Dr Garbas and her colleague Dr Sebastian Schubach. Jan Schumann had come up with the idea during a lecture at the University of Passau in which a representative from the automotive industry enthusiastically presented this novel after-sales business model. "It actually makes complete sense from the business management perspective, and customers benefit as well. You used to have to go to the garage for that, but now you can just add the option online," says Janina Garbas. But do customers see it that way too?

The researcher sought to answer this question in a series of experiments. For these, she and her co-author team developed a number of different scenarios. Between 150 and 350 participants were each presented a scenario and asked to answer questions related to the situation: "Would you be willing to pay for this seat heater?"

Customers feel annoyed when it comes to hardware components

The result: "With hardware components like the seat heater, the respondents felt a sense of betrayal," says Garbas. "They feel the feature in the product actually already belongs to them." She goes on to explain that software updates are less of an issue and believes that this is so because consumers are familiar with software updates from other areas, like smartphones. She has also looked into what could help to reduce this sense of betrayal. Her recommendation: Customers should not do the updates for hardware components themselves. Instead, businesses should offer such updates as a service.

Janina Garbas also recorded a somewhat negative feeling among customers in a second digital business model. In another essay of her doctoral thesis, she examined customer willingness to disclose data to businesses if these businesses share the date with other companies.

The GDPR does not improve gut feeling

The privacy calculus theory is a model used in research, according to which customers weigh the costs against the benefits of data disclosure. Together with her co-authors, Garbas shows how cost-benefit considerations play a secondary role and gut feeling is what matters. She also examines the extent to which legal regulations such as the General Data Protection Regulation (GDPR) can mitigate this negative feeling. After all, one might think that this would give customers more security. In fact, however, the reference to the GDPR does not help to improve that negative feeling. Recommendations from friends and acquaintances are the only way to increase a customer‘s willingness to share their own data.

In order to ensure the success of digital business models, companies need to probe deeper to figure out where such customer reluctance comes from.

Dr Janina Garbas

This is what came as a surprise to Garbas in both essays: "That it's really not easy to shut down the negative response," she says and goes on to point out: "In order to ensure the success of digital business models, companies need to probe much deeper to figure out where such customer reluctance comes from."

"A tremendous achievement": Professor Jan Schumann with his former doctoral student Dr Janina Garbas. Photograph: Uli Schwarz/University of Passau.

The overarching topic in the essays Garbas penned for her doctoral thesis focuses on customer behaviour in innovative technology-driven business models. They also have one thing in common: The early career researcher scrutinises phenomena that have practical relevance. This was one of the reasons she had decided to pursue an academic career: "We're not perched high up on an ivory tower with our topics."

Personal profile

Garbas is from the municipality of Tiefenbach in the district of Passau. She obtained her bachelor's and master's degree in business administration from the University of Passau. She highly recommends anyone else wishing to pursue an academic career to choose a topic for which they have a certain degree of passion since they will be expected to work on it for years and maintains that you must not let yourself be discouraged by setbacks.

Garbas‘ main essay, which she had been working on since 2018, was not published until last year in the prestigious Journal of the Academy of Marketing Science. The process itself is exhausting because other researchers meticulously review your work and comment on it in what are called peer reviews. "You work on a paper for years and then it gets criticized all over," Garbas recounts and laughs.  "But that's an essential and very important part of the process," she concludes. 

That made presenting the project on the main stage of the EMAC Conference all the more rewarding. Hence her advice to others: "Hang in there. It will pay off in the end."

Professor Jan Schumann

Prof. Dr. Jan Hendrik Schumann

forscht zu Konsumentenverhalten in B2C-Beziehungen

Was macht es mit Menschen, wenn Firmen deren Daten weitergeben?

Was macht es mit Menschen, wenn Firmen deren Daten weitergeben?

Prof. Dr. Jan Hendrik Schumann ist seit 2012 Inhaber des Lehrstuhls für Marketing und Innovation an der Universität Passau. Außerdem ist er Projektleiter im DFG-Graduiertenkolleg 2720. Seit Juli 2013 ist er zudem einer der Direktoren des Instituts für Markt- und Wirtschaftsforschung.

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