Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in the last month.
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Dotzel, T. and V. Shankar (2019): The Relative Effects of Business-to-Business (vs. Business-to-Consumer) Service Innovations on Firm Value and Firm Risk: An Empirical Analysis, Journal of Marketing, 83(5), pp.133-152
Many firms introduce both business-to-business service innovations (B2B-SIs) and business-to-consumer service innovations (B2C-SIs) and need to better allocate their resources. However, they are unsure about B2B-SIs’ effects on firm value or risk, especially relative to those of B2C-SIs. The authors address this problem by developing hypotheses that relate the number of B2B-SIs and B2C-SIs to firm value and firm risk together with the moderators (the number of product innovations and customer-focus innovations). To test the hypotheses, the authors develop and estimate a model using unique panel data of 2,263 SIs across 15 industries over eight years assembled from multiple data sources and controlling for firm- and market-specific factors, heterogeneity, and endogeneity. They analyze innovation announcements using natural language processing. The results show that B2B-SIs have a positive effect on firm value and an insignificant influence on firm risk. Importantly, the effect of a B2B-SI on firm value is significantly greater than that of a B2C-SI. Unlike B2C-SIs, the effect of B2B-SIs on firm value is greater when the firm has more product innovations. Surprisingly, unlike B2C-SIs, the effect of B2B-SIs on firm value is less positive when the SIs emphasize customers. These findings offer important insights about the relative value of B2B-SIs.
Link: http://dx.doi.org/10.1177/0022242919847221 [Google]
Kanuri, V. K. and M. Andrews (2019): The Unintended Consequence of Price-Based Service Recovery Incentives, Journal of Marketing, 83(5), pp.57-77
Subscription-based service providers (e.g., newspapers, internet services) often issue price-based incentives to recover from service failures. However, because considerable time may pass between when providers issue a recovery incentive and when service contracts are due for renewal, it is unclear whether recovery incentives can improve customer retention in the long run. The authors investigate this question by examining 6,919 contract renewal decisions of newspaper subscribers who received varying levels of recovery incentives after newspaper delivery failures. In contrast to conventional wisdom, they find that recovery incentives are associated with lower contract renewal likelihoods. They rationalize this finding using the economic theory of reference prices and further demonstrate that firms could mitigate the unintended consequence of recovery incentives by reminding subscribers of the original price at touch points following the recovery, discounting the renewal price, and prolonging the duration between the recovery and renewal. The authors also show that the intensity of promotions in the external environment at the time of administering recovery incentives, and that acquiring subscribers by communicating the value of the subscription service, can influence the long-term effectiveness of recovery incentives. For subscription-based service providers, the authors propose a decision support model to optimize recovery and renewal incentives and demonstrate its utility within this empirical context.
Link: http://dx.doi.org/10.1177/0022242919859325 [Google]
Nitzan, I. and D. Ein-Gar (2019): The “Commitment Projection” Effect: When Multiple Payments for a Product Affect Defection from a Service, Journal of Marketing Research (JMR), 56(5), pp.842-861
Many service providers offer supplementary products related to their ongoing services (e.g., fitness centers offer fitness smartwatches). In seven studies, the authors show that the payment method for such supplementary products (multiple payments vs. a single lump sum) affects customers’ tendency to defect from the provider’s core service over time. Specifically, when customers pay for add-ons in multiple payments—provided that (1) they perceive the add-on as being bundled with the core service and (2) the payment period has an end point—they are initially less likely to defect from the service provider than when they pay in a single payment. Over time, however, as payments are made, this gap closes, such that defection intentions under the two payment methods eventually become similar. The authors propose that this phenomenon reflects “commitment projection,” wherein a decrease in customers’ commitment to the add-on product over time is projected onto their commitment to the service provider. These findings carry important managerial implications, given that many service providers offer add-on products in multiple-payment plans and that customers’ defection decisions substantially affect firms’ profitability.
Link: http://dx.doi.org/10.1177/0022243719850504 [Google]
Bavafa, H. and C. Terwiesch (2019): Work after work: The impact of new service delivery models on work hours, Journal of Operations Management, 65(7), pp.636-658
In many professional service organizations (PSOs), a single server such as a physician or lawyer delivers services to customers across multiple channels. In these settings, there exists a risk that work obligations encroach on the personal lives of the servers. We empirically examine this concern in the primary care setting of physicians providing care to patients following the introduction of a new service delivery channel, e‐visits. Our data cover an 8.5‐year timespan and include 3.3 million patient encounters, including about one million e‐visits. We find that e‐visit adoption nearly doubles the number of hours containing work (defined as office visits or e‐visits) each week. Of the additional hours containing such work, only 49% are in weekday business hours; the rest are in weekday evenings or early mornings (37%) and on weekends (14%). We also show that increases in office or e‐visit workloads lead to more post‐workday activity in the e‐visit channel. We conclude the analysis by examining the impact of these workloads on e‐visit work content, as measured by the number of words and amount of time spent on each e‐visit; we estimate precise but practically small effects of workload on these work content outcomes.
Link: http://dx.doi.org/10.1002/joom.1052 [Google]
Massimino, B. and B. Lawrence (2019): Supersize me? Franchisee size and voluntary compliance with corporate brand‐building initiatives, Journal of Operations Management, 65(7), pp.659-684
We examine the effects of a franchisee’s size, distance from headquarters, and local competition on voluntary compliance with corporate brand‐building initiatives at the outlet level. Specifically, we consider compliance with a corporate social responsibility effort to solicit charitable donations at the time of retail checkout, measuring compliance performance as the amount of donations received at each outlet. Our analysis utilizes an objective, longitudinal sample of 777 franchised outlets in a national quick‐service restaurant chain. Surprisingly, we find that distance from headquarters is positively related to compliance; we relate this finding to recent, extant research on geographic distances and franchisee behaviors. We find the beneficial effects of larger, multiunit franchisees are mitigated as franchisees’ geographic distances from headquarters increase; we relate these findings to horizontal agency within franchising systems. We further find that franchised outlets in more competitive markets comply less with brand‐building initiatives, even less so when part of a larger franchisee network. Our results underscore the important moderating role franchisee size plays in outlets’ compliance, which we link back to extant perspectives on agency theory. Supplemental analyses consider tensions between compliance and operational efficiency, as well as effects of hypothesized factors on another mandatory form of compliance.
Link: http://dx.doi.org/10.1002/joom.1056 [Google]
Verleye, K., H. Perks, T. Gruber and J. Voets (2019): The Long and Winding Road: Building Legitimacy for Complex Social Innovation in Networks, Journal of Product Innovation Management, 36(6), pp.695-720
Social innovations, which increasingly take place in interorganizational networks, occur in environments characterized by resource scarcity. To secure access to resources, social innovators need to establish legitimacy for their initiatives. Yet, empirical work investigating the process of establishing legitimacy for social innovation—also known as legitimation—is absent. This research aims to uncover how legitimacy is established when social innovations are developed, over time, through interorganizational networks. To investigate this process, the research adopts a longitudinal case study of a network of five market‐leading organizations in the home care sector. A process‐based analysis of evidence from 33 meeting observations, 45 in‐depth interviews, and 249 documents reveals three novel findings. (1) The attainment of overall legitimacy depends on the establishment, over time, of three types of legitimacy targeted at different audiences. These are framed as building blocks oriented toward achieving interorganizational, multilevel, and external legitimacy. (2) The process of establishing legitimacy, across the building blocks, is underpinned by two dominant combinations of patterns—denoted as courting and demonstrating commitment. (3) Variation in two underlying mechanisms—conflicting tensions and role promotion—drives the enactment of these patterns across the different building blocks. The study’s novelty lies in the extrication of critical types of legitimacy and dominant patterns and mechanisms which underpin the process of establishing legitimacy. It contributes to social innovation and innovation legitimation literature by providing a deep‐grained understanding of the process to establish legitimacy within social innovations carried out through interorganizational networks.
Link: http://dx.doi.org/10.1111/jpim.12506 [Google]
Blessing, G. and M. Natter (2019): Do Mystery Shoppers Really Predict Customer Satisfaction and Sales Performance?, Journal of Retailing, 95(3), pp.47-62
• Many companies use mystery shopping (MS) to measure salespeople’s behavior. • We examine whether MS assessments can be related to customer evaluations and sales. • We observe a low correlation between MS assessments and evaluations of customers. • In contrast to customer evaluations, MS assessments cannot predict sales. • These findings put the informative value of MS data into question. Mystery shopping (MS) is a widely used tool to monitor the quality of service and personal selling. In consultative retail settings, assessments of mystery shoppers are supposed to capture the most relevant aspects of salespeople’s service and sales behavior. Given the important conclusions drawn by managers from MS results, the standard assumption seems to be that assessments of mystery shoppers are strongly related to customer satisfaction and sales performance. However, surprisingly scant empirical evidence supports this assumption. We test the relationship between MS assessments and customer evaluations and sales performance with large-scale data from three service retail chains. Surprisingly, we do not find a substantial correlation. The results show that mystery shoppers are not good proxies for real customers. While MS assessments are not related to sales, our findings confirm the established correlation between customer satisfaction measurements and sales results.
Link: http://dx.doi.org/10.1016/j.jretai.2019.04.001 [Google]
Tracey, J. B. (2019): References for Prescription, Cornell Hospitality Quarterly, 60(3), pp.192-192
An introduction is presented in which the editor discusses articles in the issue on topics including performance metrics reported by two leading industry data providers; ability of gaming customers to detect differences in payout probabilities; and type of strategic decision-making process.
Link: http://dx.doi.org/10.1177/1938965519853654 [Google]
(2019): Does the Squeakiest Wheel Get the Most Grease?, Harvard Business Review, 97(5), pp.26-26
The article discusses the impact that the power distance (PD) of customer service employees has on the compensation of angry customers, including in regard to perceived threat, referencing an article by author Ella Glikson et al. in the “Journal of Service Research.”
Link: http://dx.doi.org/ [Google]
Cui, L., S.-I. I. Su, Y. Feng and S. Hertz (2019): Causal or effectual? Dynamics of decision making logics in servitization, Industrial Marketing Management, 82(), pp.15-26
This study explores servitization as an innovative market strategy for manufacturers and investigates how the decision making logics change over time in the servitization transformation process. Effectuation theory is applied to examine servitization as a new theoretical exploration. A longitudinal case study of a global heavy vehicle manufacturer’s servitization process in China reveals that the decision makers adjust their decision making logics depending on the stage of the servitization process and associated risk patterns. As the servitization process evolves into a more sophisticated stage, decision makers will change their decision making logics from a causation dominant logic to an effectuation dominant logic in order to cope with the increased risks. Effectuation theory originally developed from entrepreneurship research is found to be a valid theory for the explanation of the risk and uncertainty control behaviors in the servitization transformation process of manufacturing firms. • This study investigates how the decision making logics change over time in the servitization transformation process. • Effectuation theory is applied to examine servitization as a new theoretical exploration. • Decision makers adjust their logics depending on the stage of the servitization process and associated risk patterns. • As the servitization process evolves, decision makers will change their logics from causation to effectuation. • This study offers a contextualized understanding of service strategy adopted by a global heavy vehicle manufacturer.
Link: http://dx.doi.org/10.1016/j.indmarman.2019.03.013 [Google]
Prior, D. D., J. Keränen and S. Koskela (2019): Customer participation antecedents, profiles and value-in-use goals in complex B2B service exchange, Industrial Marketing Management, 82(), pp.131-147
Customer participation (CP) is often attractive to suppliers. CP can reduce the burden of service delivery for the supplier while also improving customer satisfaction. However, several recent reviews highlight a dearth of research in business-to-business (B2B) contexts. When considering a specific type of actor – customer firm representatives – findings from a 3-year abductive study of a global mining company suggest actor-based antecedents shape CP through prescriptive and normative controls, with interpersonal dynamics between actors moderating these relationships. The findings also suggest service delivery network (SDN)-based antecedents such as SDN process locus , SDN risk orientation, and SDN knowledge orientation , shape CP, with resource availability and the degree of solution integration moderating these relationships. Moreover, CP manifests as one of four main CP contribution profiles: high overall CP , selective (technical) CP , selective (facilitating) CP, and promotional CP depending on individuals’ relative commitment and focus. Further analyses revealed that each of these profiles embody different value-in-use (VIU) goals such as risk minimization , quality , efficiency and reputation maintenance. • Actor-based antecedents shape CP through prescriptive and normative controls; interpersonal dynamics moderate these • Service delivery network (SDN)-based antecedents shape CP • CP manifests as one of four main CP contribution profiles. • CP profiles embody different value-in-use (VIU) goals.
Link: http://dx.doi.org/10.1016/j.indmarman.2019.02.005 [Google]
Roy, S., S. S and S. Bhatia (2019): Service quality versus service experience: An empirical examination of the consequential effects in B2B services, Industrial Marketing Management, 82(), pp.52-69
The present study investigates the role of service experience in B2B services vis-a-vis service quality. In particular, the study addresses the question: how do the relative effects of service quality versus service experience in a B2B setting influence the immediate (satisfaction and perceived value) and subsequent customer outcomes (loyalty and word of mouth)? To this end, three surveys were conducted (with a combined sample size of 626) of customers of financial consultancy services. The collected data is subjected to factor analysis and structural equation modeling to test the study hypotheses. Major findings indicate a stronger influence of service experience on satisfaction and perceived value as compared to service quality. Results also show a stronger indirect effect of service experience on loyalty and word of mouth (via satisfaction) compared to service quality. In addition, service experience was found to influence both perceived utilitarian and hedonic value derived from service while service quality was found to influence only utilitarian value. The findings underline the importance of service experience in a B2B setup. • Examines the relative consequential effects of service quality versus service experience. • Highlights the importance of service experience over service quality in B2B services • Extends the current understanding in B2B in terms of creating better customer outcomes. • Provides managerial implications to enhance satisfaction, customer loyalty and WOM in B2B services.
Link: http://dx.doi.org/10.1016/j.indmarman.2019.02.017 [Google]
Khurana, S., L. Qiu and S. Kumar (2019): When a Doctor Knows, It Shows: An Empirical Analysis of Doctors’ Responses in a Q&A Forum of an Online Healthcare Portal, Information Systems Research, 30(3), pp.872-891
Healthcare portals are gaining in popularity, connecting doctors with potential consumers of healthcare services. As online search and transaction marketplaces, they bring both sides of the market onto the same platform. Managers or platform owners seek to create value by increasing the number of users on either side of demand and supply of services. User-generated activity on Q&A forums of such sites reduces information asymmetry and indicates an increased adoption by either side. In this study, we have provided insights into understanding drivers for increased recommendations for doctors in online healthcare-services marketplace. The identification of these drivers and their directionality, interplay, and magnitude of impact are all of direct relevance to site promoters and managers as well as users. We find that the introduction of doctors’ responses has a significant causal impact on demand-side user perception of medical services offered. More importantly, our research suggests that doctors’ specialty, experience, qualifications, transparency in appointment booking, service fees, and response quality moderate the effect of doctors’ Q&A responses on user recommendations. Question-and-answer (Q&A) forums are gaining popularity as a user-engagement tool to drive traffic on multiservice portals. In a platform market model, demand-side users seek answers from supply-side users because such answers can indicate value offered, reduce buyer uncertainty, and offer social proof. Analyzing user-generated content on the Q&A forum of a prominent healthcare portal, we find that the introduction of doctors’ responses has a significant causal impact on demand-side user perception of medical services offered. More importantly, our research suggests that doctors’ specialty, experience, qualifications, transparency in appointment booking, service fees, and response quality moderate the effect of doctors’ Q&A responses on user recommendations. These results demonstrate that because of information asymmetry in healthcare, doctors use thoughtful online responses not only to socially interact with patients but also to signal their expertise.
Link: http://dx.doi.org/10.1287/isre.2019.0836 [Google]
Nault, B. R. and S. Zimmermann (2019): Balancing Openness and Prioritization in a Two-Tier Internet, Information Systems Research, 30(3), pp.745-763
The open internet is plagued by congestion that restricts the development of sophisticated internet-based services. Broadband and edge providers have proposed a two-tier internet with a fee-based fast lane that coexists with the open internet. This requires a restriction of internet openness, also known as network neutrality, in the fast-lane internet. Opponents of a two-tier internet believe it would hinder innovation and cause underinvestment in the open internet. The challenge is for policy to balance a fee-based fast lane with the viability of the open internet. We find that edge providers with greater bandwidth requirements per unit of output convert to the fast lane and that the fast lane can drive innovation from edge providers with high bandwidth requirements. The broadband provider chooses fixed fee pricing for the fast lane but has no incentive to increase internet capacity as long as the open internet is not monetized. With no investments in internet capacity, all edge providers of the open Internet and their end users are worse off with a two-tier internet. To maintain quality-of-service in the open internet and to increase social welfare, a two-tier internet has to be coupled with policy whereby a portion of broadband provider profit is invested in internet capacity. The open internet is plagued by congestion that restricts the development of sophisticated internet-based services, as was predicted in early work on priority pricing. Broadband and edge providers have proposed a two-tier internet with fee-based prioritization of traffic in a fast-lane internet that coexists with the open internet to overcome these problems. Doing so restricts internet openness, also known as network neutrality, in the fast-lane internet. Opponents of a two-tier internet believe it would hinder innovation, motivate underinvestment in internet infrastructure, and, consequently, reduce the quality of service (QoS) of the open internet. The challenge is for policy to balance a fee-based fast lane for priority traffic and safeguard against the viability of the open internet. In our model, edge providers choose output levels and internet type; a broadband provider chooses investment in internet capacity and pricing for prioritizing traffic in the fast lane; and a policy maker chooses a mechanism for balancing openness and prioritization in a two-tier internet. We find that edge providers with greater bandwidth requirements per unit of output convert to the fast lane, which can drive innovation from edge providers with high bandwidth requirements. The broadband provider chooses fixed fee pricing for the fast lane but has no incentive to increase investment in internet capacity as long as the open internet is not monetized. So long as there are no investments in internet capacity, all edge providers of the open internet and their end users are worse off with a two-tier internet. To maintain the QoS of the open internet and to increase social welfare, a two-tier internet has to be coupled with a policy mechanism, whereby a portion of broadband provider profit is invested in internet capacity.
Link: http://dx.doi.org/10.1287/isre.2018.0828 [Google]
Ciuchita, R., D. Mahr and G. Odekerken-Schröder (2019): “Deal with it”: How coping with e-service innovation affects the customer experience, Journal of Business Research, 103(), pp.130-141
E-service customers have myriad alternatives, so they can easily reduce their use of an e-service or switch to competitors. To enhance existing customers’ experiences and convince them to persist in their usage, companies often introduce new versions of e-services. However, the changes resulting from such incremental innovations can be effortful for customers to learn and potentially even ruin their experiences. If e-service providers want to avoid losing existing customers, they must understand how customers deal with the changes introduced by incremental innovations and the resulting impacts on the customer experience, with both the innovation and the e-service in general. To address these research questions, the current study proposes a conceptual model based on service innovation, appraisal and coping, and customer experience theories and empirically tests it with data from two quantitative studies. The results show that incremental changes in existing e-services affect the cumulative customer experience, but firms introducing such innovations can encourage certain coping strategies (e.g., problem-focused) to leverage different dimensions of the encounter experience (e.g., usefulness of the new version, pleasure in using it).
Link: http://dx.doi.org/10.1016/j.jbusres.2019.05.036 [Google]
Dou, X., X. Zhu, J. Q. Zhang and J. Wang (2019): Outcomes of entrepreneurship education in China: A customer experience management perspective, Journal of Business Research, 103(), pp.338-347
Although important to business and economic development, entrepreneurship education has offered its customers (i.e., students) mixed experiences. While some prior studies find entrepreneurship education to have a positive effect on entrepreneurial attitude or activities, others report the opposite, suggesting the need to consider environmental factors. Drawing on the nascent research on customer experience management, this study treats entrepreneurship education as a service product and advocates that service providers take a “touchpoint journey view” in that the providers should manage or influence all touchpoints in the environment—some touchpoints are internal to the providers, while others may be external. This perspective leads to a comprehensive conceptual model that identifies ten student-resource touchpoints across three areas: a) curricular b) regulatory environment, and c) social environment resources. With a unique sample of students who are systematically exposed to all three types of resources through a pilot entrepreneurship program, this study finds empirical evidence to support the proposed model. These findings offer pertinent implications to entrepreneurship education design (e.g., totality of various touchpoints). In addition, with the rising influence of the Chinese economy, this study also represents a meaningful step toward a better understanding of consumers’ service goods experience in this strategically important market.
Link: http://dx.doi.org/10.1016/j.jbusres.2019.01.058 [Google]
Driffield, N., V. Pereira and Y. Temouri (2019): Does offshore outsourcing impact home employment? Evidence from service multinationals, Journal of Business Research, 103(), pp.448-459
This paper investigates the impact of offshore outsourcing across 5746 European service multinational enterprises (MNEs) on employment at home. We estimate labour demand equations and specifically isolate the global financial crisis (GFC) by undertaking analysis through our longitudinal 19-year panel data, separately for the pre- (1997–2007) and crisis period (2008–2016). We distinguish between offshoring to high and low income countries, as well as between service industry groups. We show that there is some evidence that offshoring by location intensive service firms is associated with employment growth at home during the crisis period, while offshoring in information intensive industries in high income countries is associated with a reduction in employment at home, as firms offshore to be nearer to the client. Overall, our findings suggest that the crisis period has lessened the impact of offshoring service FDI on employment at home.
Link: http://dx.doi.org/10.1016/j.jbusres.2017.09.051 [Google]
Lioliou, E., L. Willcocks and X. Liu (2019): Researching IT multi-sourcing and opportunistic behavior in conditions of uncertainty: A case approach, Journal of Business Research, 103(), pp.387-396
Multi-sourcing arrangements are a major trend in the contemporary outsourcing landscape, but our understanding of what makes these complex ventures effective remains relatively fragmented. Our study focuses on the multi-sourcing and opportunistic behavior of service providers, and in particular a relatively neglected but major driver of opportunistic behavior, namely the uncertainty surrounding the transaction. Developing an extended transaction cost economics perspective, our investigation focuses on the roles of internal and behavioral uncertainty and the occurrence of opportunistic behavior. We research a rich multi-sourcing case study within the financial services sector and compare and re-analyze a detailed case in the literature. According to our findings, internal uncertainty creates an ‘alignment of actions’ problem between outsourcing partners, while behavioral uncertainty can shape an ‘alignment of objectives’ problem, leading to the occurrence of opportunistic behavior. Our findings further contribute to a more thorough understanding of ways to reduce these uncertainties and facilitate coopetition between multiple vendors.
Link: http://dx.doi.org/10.1016/j.jbusres.2019.04.002 [Google]
Moon, S., M.-Y. Kim and P. K. Bergey (2019): Estimating deception in consumer reviews based on extreme terms: Comparison analysis of open vs. closed hotel reservation platforms, Journal of Business Research, 102(), pp.83-96
We examine how open and closed review posting policies play differentiating roles in creating social media bias. As a supplementary method to existing ones detecting fake reviews, we develop a trust measure estimating how genuine the review is, based on the frequent usage of strongly positive or negative words. Using the hotel industry as our application context, we empirically demonstrate that our trust measure serves as a correction factor that reduces social media bias. Interestingly, we observe particular hotel service features revealing strong upward manipulation to promote the businesses (for example, positive overall recommendation, interesting surroundings, and personal travel). By contrast, we identify some other features that reveal the presence of strong downward manipulation (for example, negative overall recommendation, disappointing room amenities, and poor atmosphere). From a practical perspective, this research can help both managers and consumers make better informed decisions by reducing the impact attributable to social media manipulation. • Our trust measure based on extreme terms supplements existing algorithms reducing social media bias. • We empirically support the validity of our extreme-term-based approach. • We identify particular hotel service features vulnerable to upward or downward manipulation. • Overall positive and negative evaluations are reduced after we correct for fake reviews.
Link: http://dx.doi.org/10.1016/j.jbusres.2019.05.016 [Google]
