How the design of product-service systems affects consumer adoption

Businesses implementing a product-service system (PSS) must make several big design choices, such as the payment scheme and contract duration. However, there is limited understanding of how such PSS ‘attributes’ affect consumer choices. To address this gap, we use a choice-based conjoint experiment among 298 Dutch adults. Our participants choose among PSS and purchase options for a washing machine, which vary across four attributes: payment scheme, price, minimum contract duration (MCD), and energy efficiency. We consider three payment schemes: purchase, pay-per-use, and pay-per-period. Our analysis reveals that preferences vary significantly across consumers. The payment scheme affects consumers' choices most strongly, while other attributes have similar levels of importance. Purchasing is the most popular payment scheme, followed by the pay-per-use option. Consumers are more price-sensitive when purchasing a product than when adopting a PSS. This suggests that there is space for multiple business models in the market and that PSS providers have more flexibility in pricing. We also shed light on how consumer characteristics, such as the ticking meter effect, psychological ownership, need for flexibility, insurance effect, greenness, usage, break-down probability perception, and cost expectation, affect their choices.