Considered Service-specific journals were Journal of Service Research, Journal of Service Management, Journal of Services Marketing, Journal of Service Theory and Practice, Service Industries Journal, Cornell Hospitality Quarterly, and Service Science.
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Yoganathan, V., V.-S. Osburg, W. H. Kunz and W. Toporowski (2021): Check-in at the Robo-desk: Effects of automated social presence on social cognition and service implications, Tourism Management, 85(), pp.104309
The rise of humanoid robots in hospitality services accelerates the need to understand related consumer re- actions. Four scenario-based experiments, building on social presence and social cognition theories, examine how humanoid robots (vs. self-service machines) shape consumer service perceptions vis-a`-vis concurrent presence/ absence of human staff. The influence of consumers’ need for human interaction and technology readiness is also examined. We find that anthropomorphizing service robots positively affects expected service quality, first-visit intention, willingness to pay, as well as increasing warmth/competence inferences. However, these effects are contingent on the absence of human frontline staff, explained by viewing anthropomorphism as a relative concept. Humanoid robots increase psychological risk, but this poses no threat to expected service quality when consumers’ need for human interaction is controlled for. Additionally, we show that a humanoid robot’s effect on expected service quality is positive for all but low technology readiness levels. Further implications for theory/ practice are discussed.
Gelbrich, K., J. Hagel and C. Orsingher (2021): Emotional support from a digital assistant in technology-mediated services: Effects on customer satisfaction and behavioral persistence, International Journal of Research in Marketing, 38(1), pp.176-193
In their traditional role, digital assistants in technology-mediated services provide customers with information, guidance, and suggestions. However, as the opportunities offered by technology and artificial intelligence increase, digital assistants can also provide emotional support, which refers to empathetic, reassuring expressions for customers who have failed or succeeded in fulfilling a task. We show across four experiments that emotional support offered by a digital assistant increases customer satisfaction (Study 1 and 2) and persistence (Study 3 and 4) in using technology-mediated services. The increase in satisfaction occurs via the perceived warmth of the digital assistant, and the increase in persistence via the serial mediation of perceived warmth and satisfaction. Further, the results of a moderated serial mediation show that the effect on persistence only occurs when a digital (but not when a human) assistant provides emotional support in technology-mediated services. Finally, the effect of emotional support on persistence occurs independently of the digital assistant’s embodiment. Practitioners learn how to imbue technology-mediated services with a human touch, inducing favorable customer outcomes. • Emotional support from digital assistants fosters satisfaction and persistence. • This effect occurs because users perceive the assistants’ feedback as warm. • An embodiment of the digital assistant is not necessary. • The support is beneficial both when customers fail and succeed in fulfilling a task. • The effect only occurs when digital (but not human) assistants provide support.
Keeling, D. I., K. Keeling, K. de Ruyter and A. Laing (2021): How value co-creation and co-destruction unfolds: a longitudinal perspective on dialogic engagement in health services interactions, Journal of the Academy of Marketing Science, 49(2), pp.236-257
Complex services, such as healthcare, struggle to realize the benefits of value co-creation due to the substantial challenges of managing such services over the long-term. Key to overcoming these challenges to value co-creation is a profound understanding of dialogue (i.e., ‘quality of discourse’ facilitating shared meaning) during service interactions. Contributing to an emerging literature, we undertake a longitudinal, ethnographic study to assess dialogue between professionals and patients through the lens of dialogic engagement (i.e., iterative mutual learning processes that bring about action through dialogue). We develop and empirically support six dialogic co-creation and co-destruction mechanisms that impact on the resolution of tensions and integration of knowledge resources between service providers and consumers. We reveal the multidimensional and dynamic nature of value created or destroyed through these mechanisms in dialogue over time. Taking healthcare as an exemplar, we offer a research agenda for developing our understanding of DE in complex services.
Lamey, L., E. Breugelmans, M. Vuegen and A. ter Braak (2021): Retail service innovations and their impact on retailer shareholder value: evidence from an event study, Journal of the Academy of Marketing Science, (), pp.1-23
To survive in the competitive retail landscape, retailers launch service innovations designed to grant additional value to consumers. This study investigates whether and in which circumstances retail service innovations create shareholder value, using stock returns to capture investors’ point of view. An event study is used to analyze a broad, varied set of 350 service innovation announcements by publicly listed retailers. The study shows that the customer value benefit(s) aimed for by the retail service innovation (i.e., its level of convenience and engagement) has an impact on shareholder value. Moreover, this impact is contingent upon the stage of the consumer purchase process that the innovation targets, and upon the hedonic or utilitarian nature of the products offered by the retailer that initiates the innovation. The impact on retailer shareholder value is more positive for service innovations high on convenience that speed up and simplify the shopping process, when implemented at the purchase stage or by retailers offering utilitarian products. Service innovations high on engagement that focus more on non-transactional initiatives instead fare well in the post-purchase stage.
Dogru, T., M. Mody, N. Line, L. Hanks, C. Suess and M. Bonn (2021): The Effect of Airbnb on Hotel Performance: Comparing Single- and Multi-Unit Host Listings in the United States, Cornell Hospitality Quarterly, (), pp.1
Extant research provides ample evidence that Airbnb has an adverse impact on hotel revenues and that a majority of Airbnb hosts offer multiple listings on the platform. Arguably, multi-unit host listings are the primary driving force for the associated decreases in hotel revenues. To test this proposition, this study examines the extent to which single- and multi-unit host Airbnb host listings have differing effects on hotel revenues. The results show that the adverse impact of Airbnb supply on hotel revenues was mainly driven by decreases in hotel prices rather than decreases in hotel demand. Contrary to expectations, single-unit host listings exerted greater downward pricing pressure on hotels than multi-unit host listings. These effects were consistently observed across hotel segments, with economy-scale hotels experiencing substitution effects in addition to pricing pressure. The findings have significant implications for researchers and stakeholders impacted by the sharing economy in the lodging industry.
Chung, D. J. (2021): How to Shift from Selling Products to Selling Services, Harvard Business Review, 99(2), pp.48-52
Only a few years ago, most software companies sold seat licenses for their products, charging customers on the basis of head count. But today, software is typically provided using cloud-based software-as-a-service (SaaS) models that charge customers fees for consumption. Technology companies have spent billions on the innovation necessary to achieve this product shift. Now, they need to transform their sales organization and sales management practices accordingly, including an overhaul of the skills salespeople need, how they are trained and compensated, and how they interact with clients.
Nanda, A. and D. Narayandas (2021): What Professional Service Firms Must Do to Thrive, Harvard Business Review, 99(2), pp.98-107
During economic slowdowns, consulting, law, and accounting firms often start offering services and taking on clients they really shouldn’t, just to keep the lights on. This path is perilous. If a firm’s practices have a diffuse mix of clients and unclear strategic positioning, it will weaken the firm’s market profile and lead to internal conflicts, especially about the organization’s future direction. This article presents two tools that professional service firms can use to manage their client mix and optimize their strategic position. The first is the practice spectrum. All practices fall on a continuum of sophistication that ranges from “commodity” to “rocket science.” Any position on this spectrum can be profitable, though the forces driving profits change as you move along it—as do the capabilities and skills required. Successful practices understand their true position on the spectrum and know which performance levers to pull. The second tool is the client portfolio matrix, which separates clients into four categories on the basis of cost to serve and willingness to pay. Rather than spreading clients across all four, firms should focus their acquisition efforts and follow different relationship strategies for each type of client.
Bock, D., V. Thomas, J. Wolter, C. Saenger and P. Xu (2021): An extended reciprocity cycle of gratitude: How gratitude strengthens existing and initiates new customer relationships, Psychology & Marketing, 38(3), pp.564-576
Customers who feel gratitude toward a firm are motivated to engage in direct reciprocity. However, does gratitude’s effect extend beyond the original dyadic interaction to affect relationships with other potential customers? Drawing from indirect reciprocity theory, we propose an extended reciprocity cycle of customer gratitude in which existing customer relationships are strengthened through direct reciprocity and new customer relationships are initiated through indirect reciprocity. Through an experiment, Study 1 demonstrates that employee‐centric reviews are written by grateful customers because they desire to help the firm. Utilizing another experiment, Study 2 reveals that gratitude‐driven employee‐centric reviews significantly increase other consumers’ attitudes toward helpful service firms (i.e., positioned as having a sincere brand personality). Study 3 extends the prior findings using field data from Yelp, revealing that employee‐centric reviews are perceived as more useful when shown for sincere rather than sophisticated brands. Collectively, results indicate that customer gratitude fosters not only direct reciprocity, but also indirect reciprocity by encouraging other consumers to reward firms that help customers, signaling to practitioners the importance of managing customers’ emotional experiences and strategically placing gratitude‐driven content.
Maldoy, K., C. J. S. De Backer and K. Poels (2021): The pleasure of sharing: Can social context make healthy food more appealing?, Psychology & Marketing, 38(2), pp.359-370
This study investigates whether healthy food can be made more appealing by looking at the pleasure induced by the social context in which food is eaten (eating alone, eating together, or sharing food), assuming that pleasure affects food appeal. Whereas unhealthy food is often considered a source of pleasure, healthy food is not. The pleasure induced in images portraying healthy food may depend on the social context in which the food is eaten. Based on evolutionary associations of sharing food and social interaction with pleasure, we expected that eating together induces more pleasure than eating alone and that sharing food induces more pleasure than eating together. Two between‐subject experiments with a 3 (context: eating alone, eating together, or sharing food) × 2 (healthfulness: healthy or unhealthy) design were conducted across various age groups and food types. Results indicate that images in which healthy food is shared induce more pleasure than images in which healthy food is eaten alone, making the food involved more appealing. Pleasurable imagery of healthy food being shared therefore seems to hold promise as a strategy to promote healthy eating through public service or commercial advertising.
Akşin, Z., S. Deo, J. O. Jónasson and K. Ramdas (2021): Learning from Many: Partner Exposure and Team Familiarity in Fluid Teams, Management Science, 67(2), pp.854-874
In services where teams come together for short collaborations, managers are often advised to strive for high team familiarity so as to improve coordination and consequently, performance. However, inducing high team familiarity by keeping team membership intact can limit workers’ opportunities to acquire useful knowledge and alternative practices from exposure to a broader set of partners. We introduce an empirical measure for prior partner exposure and estimate its impact (along with that of team familiarity) on operational performance using data from the London Ambulance Service. Our analysis focuses on ambulance transports involving new paramedic recruits, where exogenous changes in team membership enable identification of the performance effect. Specifically, we investigate the impact of prior partner exposure on time spent during patient pickup at the scene and patient handover at the hospital. We find that the effect varies with the process characteristics. For the patient pickup process, which is less standardized, greater partner exposure directly improves performance. For the more standardized patient handover process, this beneficial effect is triggered beyond a threshold of sufficient individual experience. In addition, we find some evidence that this beneficial performance impact of prior partner exposure is amplified during periods of high workload, particularly for the patient handover process. Finally, a counterfactual analysis based on our estimates shows that a team formation strategy emphasizing partner exposure outperforms one that emphasizes team familiarity by about 9.2% in our empirical context. This paper was accepted by Jay Swaminathan, operations management.
Bellos, I. and S. Kavadias (2021): Service Design for a Holistic Customer Experience: A Process Framework, Management Science, 67(3), pp.1718-1736
Modern service design practices conceptualize services as multistep processes. At each step, customers derive an uncertain value, which depends on a functional benefit and a subjective experience. The latter may depend on experiences realized at previous steps. Service designs determine the provider effort at each step given that customers prefer less-variable experiences, and enable a holistic perspective of the overall experience. We quantify two factors that shape service designs: the type of steps ((i) routine steps, where effort increases the functional benefit and decreases the experience variability, and (ii) nonroutine steps, where effort increases the functional benefit at the expense of higher variability) and a holistic coupling factor (at each step, the design is determined not only by experience realizations at predecessor steps but also by how it can shape subsequent experiences). The optimal efforts depend on the combination of these two factors, giving rise to actionable design rules. For a positive coupling factor, step type homogeneity leads to “spread the effort” designs (complementary efforts), whereas a negative coupling factor suggests focusing the effort on a few key steps at the expense of the rest of the service (substitutable efforts). Step type heterogeneity reverses these recommendations. Moreover, when the customer experience unfolds according to a nonstationary process with serial correlation, the effort at each step is determined by an impact zone defined by the steps surrounding the focal service step. Stronger correlation always induces higher effort, whereas weaker correlation may induce less effort in services with heterogeneous step types. This paper was accepted by Serguei Netessine, operations management.
Buell, R. W. (2021): Last-Place Aversion in Queues, Management Science, 67(3), pp.1430-1452
This paper documents the effects of last-place aversion in queues and its implications for customer experiences and behaviors, as well as for operating performance. An observational analysis of customers queuing at a grocery store, and four online studies in which participants waited in virtual queues, revealed that waiting in last place diminishes wait satisfaction while increasing the probabilities of switching and abandoning queues, with detrimental implications for queuing systems. The research suggests that last-place aversion can lead to maladaptive customer behaviors—switching behaviors that increase wait times and abandoning when the benefits of waiting are most pronounced. The results indicate that this behavior is partially explained by the inability to make a downward social comparison; namely, when no one is behind a queuing individual, that person is less certain that continuing to wait is worthwhile. Furthermore, this paper provides evidence that queue transparency is an effective service design lever that managers can use to reduce the deleterious effects of last-place aversion in queues. When people cannot see that they are in last place, the behavioral effects of last-place aversion are nullified; and when they can see that they are not in last place, the tendency to renege is greatly diminished. Finally, a system-level experiment, in which pairs of queues were created and analyzed, reveals that when the effects of last-place aversion are addressed, overall abandonment decreases, such that with equivalent arrival and service rates, total service provision can be increased. This paper was accepted by Vishal Gaur, operations management.
Buell, R. W., D. Campbell and F. X. Frei (2021): The Customer May Not Always Be Right: Customer Compatibility and Service Performance, Management Science, 67(3), pp.1468-1488
This paper investigates the impact of customer compatibility—the degree of fit between customers’ needs and the capabilities of the operations serving them—on customer experiences and firm performance. We use variance decomposition analysis to quantify the relative importance of customer, employee, process, location, and market-level effects on customer satisfaction. In our models, which explain roughly a quarter of the aggregate variance, differences among customers account for 96%–97% of the explainable portion. Further analysis of interaction-level data from banking and quick-service restaurants reveals that customers report relatively consistent satisfaction across transactions with particular firms but that some customers are habitually more satisfied than others. A second set of empirical studies provides evidence that these customer-level differences are explained in part by customer compatibility. Customers whose needs, proxied by differences in demographics and product choices, diverge more starkly from those of their bank’s average customers report significantly lower levels of satisfaction. Consistently, banks that serve customer bases with more dispersed needs receive lower satisfaction scores than banks serving customer bases with less dispersed needs. Finally, a longitudinal analysis of the deposit and loan growth of all federally insured banks in the United States from 2006 to 2017 reveals that customer compatibility affects a firm’s financial performance. Branches with more divergent customers grow more slowly than branches with less divergent customers. Institutions serving customer bases with more dispersed needs have branches that exhibit slower growth than those of institutions serving customer bases with less dispersed needs. This paper was accepted by Vishal Gaur, operations management.
Espinosa, M. (2021): Labor Boundaries and Skills: The Case of Lobbyists, Management Science, 67(3), pp.1586-1607
What are the determinants of in-house employment versus outsourcing in the service sector? I use detailed data on U.S. lobbying services to answer this question. I argue with a series of correlational exercises that firms tend to outsource lobbying tasks that demand a large amount of general skills, whereas they are more likely to assign firm-specific tasks to in-house lobbyists. I provide causal evidence that the need to do tasks that vary in their general skill component leads to a change in outsourcing. Using difference-in-difference estimations, I show that the 2010 British Petroleum oil spill increased the general skills needed by oil and gas firms and that, consequently, their use of lobbyists for hire increased. This paper was accepted by Joshua Gans, business strategy.
Hathaway, B. A., S. M. Emadi and V. Deshpande (2021): Don’t Call Us, We’ll Call You: An Empirical Study of Caller Behavior Under a Callback Option, Management Science, 67(3), pp.1508-1526
Although call centers have recently invested in callback technology, the effects of this innovation on call center performance are not clearly understood. In this paper, we take a data-driven approach to quantify the operational impact of offering callbacks under a variety of callback policies. To achieve this goal, we formulate a structural model of the caller decision-making process under a callback option and impute their underlying preferences from data. Our model estimates shed light on caller preferences under a callback option. We find that callers experience three to six times less discomfort per unit of time while waiting for callbacks than while waiting in queue, suggesting that offering callbacks can increase service quality by channeling callers to an alternative service channel where they experience less discomfort while waiting. However, after controlling for expected waiting times, callers generally prefer waiting in a queue over accepting a callback and waiting offline. This suggests that managers of this call center may want to spend efforts in educating their customers on the benefits of the callback option. Using the callers’ imputed preferences, we are able to conduct counterfactual analyses of how various callback policies affect the performance of this call center. We find that in this call center, offering to hold the callers’ spot in line or to call back within a window (guaranteed timeframe) reduces average online waiting time (the average time callers wait on the phone) by up to 71% and improves service quality by decreasing callers’ average incurred waiting cost by up to 46%. Moreover, we find that offering callbacks as a demand postponement strategy during periods of temporary congestion reduces average online waiting time by up to 86%, increases service quality by up to 54%, and increases system throughput by up to 2.1%. This paper was accepted by Vishal Gaur, operations management.
He, P., F. Zheng, E. Belavina and K. Girotra (2021): Customer Preference and Station Network in the London Bike-Share System, Management Science, 67(3), pp.1392-1412
We study customer preference for the bike-share system in the city of London. We estimate a structural demand model on the station network to learn the preference parameters and use the estimated model to provide insights on the design and expansion of the bike-share system. We highlight the importance of network effects in understanding customer demand and evaluating expansion strategies of transportation networks. In the particular example of the London bike-share system, we find that allocating resources to some areas of the station network can be 10 times more beneficial than others in terms of system usage and that the currently implemented station density rule is far from optimal. We develop a new method to deal with the endogeneity problem of the choice set in estimating demand for network products. Our method can be applied to other settings in which the available set of products or services depends on demand. This paper was accepted by Gabriel Weintraub, revenue management and market analytics.
de Jong, A., K. de Ruyter, D. I. Keeling, A. Polyakova and T. Ringberg (2021): Key trends in business-to-business services marketing strategies: Developing a practice-based research agenda, Industrial Marketing Management, 93(), pp.1-9
The marketing of B2B services has become an important field of academic enquiry. Industrial Marketing Management scholars have contributed to building a robust body of scholarship on the role of services as an indispensable aspect of company’s strategic performance process. However, with digitization, there is a clear need for theoretical concepts and frameworks that can guide companies in the development of contemporary and strategic roadmaps for their B2B service marketing strategies and performance practice. This position paper outlines an agenda and delineates issues in B2B service delivery that need to be addressed to close the gap between service marketing theory and practice and collaborate on the development of strategic service capabilities for the industrial marketing space. More specifically, we identify and discuss the impact of 5 important trends shaping B2B services: 1) gamification, 2) personalization, 3) Mixed Reality (MR), 4) data visualization, and 5) privacy. On the basis of these, we will offer a number of specific directions for future research by industrial marketing researchers. • Digitization reshapes B2B services as enabling services for channel resilience. • Gamification, personalization, MR, data visualization & privacy boost B2B services. • Contextual considerations are needed for B2B services to pivot to the new normal.
Gebauer, H., M. Paiola, N. Saccani and M. Rapaccini (2021): Digital servitization: Crossing the perspectives of digitization and servitization, Industrial Marketing Management, 93(), pp.382-388
For over three decades now, several product companies around the world have been undertaking servitization paths. They have been devoting growing and substantial efforts to expand their service business. Expanding the service business in addition to their traditional core product business secures long-term growth and strengthens competitive advantages in business-to-business marketplaces. Recently, service business expansion has taken up many of the new digital technologies offered through the digital transformation. Thus, the servitization literature has progressed toward a dialogue on digital servitization. Against this background, the present article introduces the reader to this special issue. It first recalls key aspects of the emerging digital servitization discussion, and then depicts, through illustrative case studies, the growth paths utilized by industrial product companies when they take advantage of the digital servitization process. After discussing how the articles included in this special issue advance the literature, the article develops a number of directions for future research on digital servitization.
Woo, H., S. J. Kim and H. Wang (2021): Understanding the role of service innovation behavior on business customer performance and loyalty, Industrial Marketing Management, 93(), pp.41-51
Providing new services to customers gives firms a competitive advantage in the market. Consequently, firms strive to develop innovative service that delivers new value propositions to customers and leads to customer satisfaction and the acquisition of new customers. The authors investigate the relationship between the innovative behavior of service providers, business customer performance, and business customer loyalty in the safety industry. The study’s results show that technology-oriented and co-creation-oriented innovative behavior leads to business customer performance. Business customer performance is closely related to recommendations and re-contracts. Moreover, the degree of safety involvement has a moderate effect between service innovation and business customer performance. The findings have important theoretical and managerial implications for service innovation for researchers as well as service providers. • This study focuses on innovative behavior of service provider in the safety industry. • Innovative behavior of service provider determines business customer performance and in turn, influence business customer loyalty. • This study finds that customers put differently emphasis innovative service elements according to safety involvement level.
Sharma, S. and A. Mehra (2021): Entry of Platforms into Complementary Hardware Access Product Markets, Marketing Science, 40(2), pp.325-343
This paper analyzes the entry of digital platforms such as Google into complementary hardware markets (e.g., internet service provision) using a game-theoretic model. Access to a platform’s services often requires consumers to use a complementary hardware product or service, for example, internet service is needed to access the YouTube platform. Typically, such access products are provided by third-party firms. More recently, however, some major platforms such as Google have themselves ventured into providing these access products. For example, Google Fiber provides access to YouTube. In this paper, we examine the effect of a platform’s entry into an access product market when the profits from the platform’s advertising business depend upon the quality of the access products. We develop a theoretical model to study this context and find that such an entry by the platform (i) can lead the platform to provide a higher quality access product than the third-party firms at a lower price, (ii) may, in contrast to the entry by a third-party firm, lead to a higher quality access product by both the platform as well as the firms, (iii) improves the platform’s profits because of increased advertising revenue and/or additional profits from the access product sales, and (iv) increases consumer surplus even though the platform becomes more dominant because of its entry into the access product market. All the results are driven by the positive association between the platform’s advertising profits and the quality of access products in the market.
Lee, C. Y., S. Shu and Z. Xu (2021): Optimal Global Liner Service Procurement by Utilizing Liner Service Schedules, Production & Operations Management, 30(3), pp.703-714
For global shippers (i.e., multinational manufacturers or retailers), strategic sourcing of container liner shipping services from ocean carriers is an important element of successful global supply chain management. We study how to utilize information about different ocean carriers’ liner service schedules so that shippers can optimize their sourcing decisions over the selection of carriers to transport container cargoes around the world through multiple shipping lanes. We first introduce a deterministic optimization problem, where cargo demands are given in advance and in which inventory holding costs are included to capture the impacts of liner service schedules on the total operating cost. We formulate the deterministic optimization problem as a mixed integer linear program, which can be simplified by exploiting a totally unimodular property, and can thus be solved directly by a general optimization solver. To further capture the impact of liner service schedules on shippers’ resilience to the uncertainties in cargo demands, we then introduce a two‐stage robust optimization counterpart of the deterministic problem based on a probability‐free demand uncertainty set. As the two‐stage robust optimization problem is challenging to solve, we derive some novel reformulations that can enable us to develop an effective solution method. By exploiting the information about liner service schedules, we show how our proposed models and solution method can help shippers to optimize their liner service procurement decisions.