Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in the last months.
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Crolic, C., F. Thomaz, R. Hadi and A. T. Stephen (2022): Blame the Bot: Anthropomorphism and Anger in Customer–Chatbot Interactions, Journal of Marketing, 86(2781), pp.132-148
Chatbots have become common in digital customer service contexts across many industries. While many companies choose to humanize their customer service chatbots (e.g., giving them names and avatars), little is known about how anthropomorphism influences customer responses to chatbots in service settings. Across five studies, including an analysis of a large real-world data set from an international telecommunications company and four experiments, the authors find that when customers enter a chatbot-led service interaction in an angry emotional state, chatbot anthropomorphism has a negative effect on customer satisfaction, overall firm evaluation, and subsequent purchase intentions. However, this is not the case for customers in nonangry emotional states. The authors uncover the underlying mechanism driving this negative effect (expectancy violations caused by inflated pre-encounter expectations of chatbot efficacy) and offer practical implications for managers. These findings suggest that it is important to both carefully design chatbots and consider the emotional context in which they are used, particularly in customer service interactions that involve resolving problems or handling complaints.
Garvey, A. M., T. Kim and A. Duhachek (2022): Bad News? Send an AI. Good News? Send a Human, Journal of Marketing, (2782), pp.1
The present research demonstrates how consumer responses to negative and positive offers are influenced by whether the administering marketing agent is an artificial intelligence (AI) or a human. In the case of a product or service offer that is worse than expected, consumers respond better when dealing with an AI agent in the form of increased purchase likelihood and satisfaction. In contrast, for an offer that is better than expected, consumers respond more positively to a human agent. The authors demonstrate that AI agents, compared with human agents, are perceived to have weaker intentions when administering offers, which accounts for this effect. That is, consumers infer that AI agents lack selfish intentions in the case of an offer that favors the agent and lack benevolent intentions in the case of an offer that favors the customer, thereby dampening the extremity of consumer responses. Moreover, the authors demonstrate a moderating effect, such that marketers may anthropomorphize AI agents to strengthen perceived intentions, providing an avenue to receive due credit from consumers when the agent provides a better offer and mitigate blame when it provides a worse offer. Potential ethical concerns with the use of AI to bypass consumer resistance to negative offers are discussed.
Zhou, Q., B. J. Allen, R. T. Gretz and M. B. Houston (2021): Platform Exploitation: When Service Agents Defect with Customers from Online Service Platforms, Journal of Marketing, (2783), pp.1
Online, pure-labor service platforms (e.g., Zeel, Amazon Home Services, Freelancer.com) represent a multibillion-dollar market. An increasing managerial concern in such markets is the opportunistic behavior of service agents who defect with customers off platform for future transactions. Using multiple methods across studies, the authors explain this platform exploitation phenomenon. In Study 1, they utilize a theories-in-use approach to clarify why and when platform exploitation occurs and derive some hypotheses. Study 2 empirically tests these hypotheses using data from a health care platform that connects nurses and patients. The results indicate that high-quality, long-tenured service agents may enhance platform usage, but customers also are more likely to defect with such agents. Platform exploitation also increases with greater customer–agent interaction frequency (i.e., building stronger relationships). This phenomenon decreases agents’ platform usage due to capacity constraints caused by serving more customers off platform. These effects are stronger as service price increases (because higher prices equate to more fee savings), as service repetitiveness increases, and as the agent’s on-platform customer pool comprises more repeat and more proximal customers. Finally, the authors use two scenario-based experiments to establish some managerial strategies to combat platform exploitation.
Becker, L., K. Coussement, M. Büttgen and E. Weber (2022): Leadership in innovation communities: The impact of transformational leadership language on member participation, Journal of Product Innovation Management, 39(2803), pp.371-393
Abstract Many organizations seek to establish online innovation communities (ICs) to obtain valuable knowledge and innovative ideas, though both research and practice suggest that they also struggle to sustain continued, high-quality member participation. Designated IC moderators might be able to stimulate IC members to participate regularly and make high-quality contributions. In response to calls to integrate organizational behavior and IC research, this study addresses the impact of community moderators? uses of transformational leadership (TFL) language on member participation. By operationalizing the TFL dimensions?charisma, individualized consideration, and intellectual stimulation?with language cues, this article uses an automated text analysis approach to review 64 firm-hosted ICs with 538,805 posts, analyzed with two hierarchical linear models. The findings show that moderators? charismatic language cues enhance members? participation quality and quantity. Although individualized consideration and intellectual stimulation increase participation quality, they decrease participation quantity. Organizations thus should assign moderators to lead ICs by using TFL language strategically, in accordance with the focal IC goals, in terms of the quality and quantity of member contributions to their innovation processes. This article contributes to the literature by exploring how leadership language in online communities can facilitate the development of innovative ideas. In addition, this study offers a more nuanced view on the effects of TFL by revealing both positive and negative outcomes in firm-hosted online ICs and it introduces a new, objective measure of TFL built on linguistic markers. This article also includes specific guidelines for how moderators can achieve effective leadership through their language use, as well as managerial implications for the effective selection, training, and support of IC moderators.
Kim, J. H., M. Kim, D. W. Kwak and S. Lee (2022): Home-Tutoring Services Assisted with Technology: Investigating the Role of Artificial Intelligence Using a Randomized Field Experiment, Journal of Marketing Research (JMR), 59(2784), pp.79-96
Despite a rising interest in artificial intelligence (AI) technology, research in services marketing has not evaluated its role in helping firms learn about customers’ needs and increasing the adaptability of service employees. Therefore, the authors develop a conceptual framework and investigate whether and to what extent providing AI assistance to service employees improves service outcomes. The randomized controlled trial in the context of tutoring services shows that helping service employees (tutors) adapt to students’ learning needs by providing AI-generated diagnoses significantly improves service outcomes measured by academic performance. However, the authors find that some tutors may not utilize AI assistance (i.e., AI aversion), and factors associated with unforeseen barriers to usage (i.e., technology overload) can moderate its impact on outcomes. Interestingly, tutors who significantly contribute to the firm’s revenue relied heavily on AI assistance but unexpectedly benefited little from AI in improving service outcomes. Given the wide applicability of AI assistance in a variety of services marketing contexts, the authors suggest that firms should consider the potential difficulties employees face in using the technology rather than encourage them to use it as it is.
Eckert, C., H. J. van Heerde, H. A. Wetzel and S. Hattula (2022): Spotlight Personnel: How Hiring and Turnover Drive Service Performance Versus Demand, Journal of Marketing Research (JMR), (2785), pp.1
In many sectors of the entertainment industry, a few employees attract the public spotlight when performing the core service. For example, in professional team sports, a team of players competes in games, and in TV shows, a cast of artists acts in different episodes. These employees, coined “spotlight personnel,” are an essential but expensive element of ongoing service delivery. Despite their importance and cost, very little is known about how changes in spotlight personnel affect service performance and demand. To address this gap, this article uses unique data on professional German soccer teams, tracking the quantity (number of players) and quality (average transfer price) of spotlight personnel hiring (incoming transfers) and turnover (outgoing transfers), objective service performance (winning percentage), and demand (ticket sales) across four decades, using both traditional and novel time series methods. The results show that service performance and demand are primarily affected by spotlight personnel hiring rather than by turnover. Hiring quantity decreases service performance yet increases demand, whereas hiring quality benefits both service performance and demand. The analysis further uncovers that these effects are subject to dynamic interactions and nonlinearities. Investment scenarios showcase how understanding these effects can substantially improve managerial decision making.
Gurnani, H., S. Singh, S. Tang and H. Wang (2022): Service Provision in Distribution Channels, Journal of Marketing Research (JMR), (2786), pp.1
Consumers may need help using an inherently complex product after purchase. This article studies a manufacturer’s and a retailer’s incentives to provide presales service and after-sales support in a distribution channel. The authors consider a model in which a manufacturer makes wholesale price and channel service decisions. Subsequently, a retailer makes retail price and channel service decisions. They find that, in equilibrium, both channel members provide presales service. If the fixed-cost investment needed to enhance the effectiveness of after-sales support is small, the manufacturer lets the retailer provide after-sales support. Yet when it is above a threshold and the retailer becomes unwilling to invest in providing after-sales support, the manufacturer steps in and does so. As expected, when the fixed cost is too large, the manufacturer also opts out of providing after-sales support. Interestingly, when the retailer provides after-sales support, the level of presales service and the demand for after-sales support can simultaneously be the highest among all configurations. Finally, the authors demonstrate the robustness of their main results by studying alternative channel service configurations.
Danuso, A., F. Giones and E. Ribeiro da Silva (2022): The digital transformation of industrial players, Business Horizons, 65(2787), pp.341-349
Digitalization is transforming the industrial landscape. Smarter products, data-based services, and new business models promise to reshape the whole manufacturing industry. But just below the visible excitement lurk unexpected tensions and challenges that can make digital transformation an excruciating journey for industrial companies. In this article, we decipher the digital transformation strategy choices of leading industrial firms in a highly innovative country. We then identify four dominant tensions that managers need to sort out. We also provide guiding principles for selecting a digital transformation strategy capable of overcoming each of the identified tensions.
Jap, S. D., W. Gibson and D. Zmuda (2022): Winning the new channel war on Amazon and third-party platforms, Business Horizons, 65(2788), pp.365-377
The top online marketplaces in the world, including Alibaba, Amazon, and eBay, sold $2.7 trillion in 2020, or 62% of global web sales that year. Despite the promise of unfettered access to customers, the reality is that most sellers struggle with unprecedented and unauthorized rogue resellers. These often anonymous, third-party individuals and firms may not provide the quality experiences aligned with customers’ expectations of a brand and often market their goods in competition with trusted partners. This requires a systematic battle plan to effectively protect the seller’s brand equity, service promise, and authorized distribution network. We describe the channel war that is at work and the forces fueling its development. We explain how rogue reseller activities drive down pricing, increase channel competition and conflict, impact the customer experience, and harm brand equity. We recommend revising product policies, procedures, and agreements to begin to differentiate products from those sold by unauthorized parties. We also recommend a legal strategy to complement these efforts. Critical steps include regular and active enforcement as well as implementing services, benefits, and quality controls for the brand’s products that cannot be replicated by unauthorized sellers and requiring authorized distributors and retailers to maintain those benefits and controls.
Sjödin, D., V. Parida and I. Visnjic (2022): How Can Large Manufacturers Digitalize Their Business Models? A Framework for Orchestrating Industrial Ecosystems, California Management Review, 64(2789), pp.49-77
For manufacturers, remaining competitive depends on their ability to digitalize their business models (i.e., offer digital and digitally enhanced products and services). To achieve this, they must engage with new digital partners and help their existing suppliers, partners, and other stakeholders to digitalize. Orchestrating this growing ecosystem is challenging. Manufacturers struggle with this endeavor because of specific barriers associated with their existing legacy business model and related to their lack of digital vision, product-centric value chains, and a bias toward firm-centered profit formulas. To overcome these barriers, leading manufacturers have developed new approaches to ecosystem orchestration.
Frank, A. G., G. H. d. S. Mendes, G. B. Benitez and N. F. Ayala (2022): Service customization in turbulent environments: Service business models and knowledge integration to create capability-based switching costs, Industrial Marketing Management, 100(2790), pp.1-18
Prior studies considered external conditions that trigger the adoption of servitization in product firms, but little is known on the decision to provide standardized vs. customized services. We analyze this tradeoff when companies face market and technological turbulence. We follow the capability-based switching costs theory, which considers the cost resulting from customer efforts to create new capabilities related to the solution offered by product firms. We propose that customized services help create these switching costs in turbulent environments. We also consider the mediating role of service-centric business models and the moderating role of cross-functional knowledge integration in these relationships. We combined data from a survey of 104 firms and secondary industry-level data on turbulence and analyzed it with regression techniques. Results show that, in turbulent environments, companies increase service customization instead of standardization and enhance service-centric business models, which benefits customer loyalty (a measure of capability-based switching costs). Companies focused on knowledge integration were less sensitive to technological turbulence and could better develop service activities for customization. We extend the service theory connecting it to the capability-based switching cost view and explain service provision mechanisms in turbulent environments. Managers can learn what to consider to implement a servitized business model in turbulent environments. • Market and technological turbulence are positively associated with servitization • Service customization is adopted instead of standardization when faced with turbulence • Service customization helps to develop capability-based switching costs • Cross-functional knowledge integration is critical to support service-centric business models • A stronger focus on knowledge integration makes less sensitive to technological turbulence
Ertz, M., S. Sun, E. Boily, P. Kubiat and G. G. Y. Quenum (2022): How transitioning to Industry 4.0 promotes circular product lifetimes, Industrial Marketing Management, 101(2791), pp.125-140
Resource conservation through extended product lifetimes has emerged as a rising mantra in various domains related to the circular economy. Meanwhile, it appears that product lifetime extension (PLE) is increasingly achievable through sophisticated technological production systems encapsulated in the concept of industry 4.0. To help managers and researchers understand the potential of PLE offered by crucial Industry 4.0 technologies, this study provides a systematic literature review synthesizing conceptual and empirical research demonstrating the PLE-Industry 4.0 nexus. Using the Digital Twin as a Service (DTaaS) as an architecture reference model for Industry 4.0, we identify four key constitutive technologies of Industry 4.0 (i.e., Additive Manufacturing, Artificial Intelligence, Internet-of-Things, and Big Data) that may contribute to improved product design, access, maintenance, redistribution, and recovery. The findings provide meaningful strategies that are actionable by managers to extend product lifetimes. • Proposition of a systematic review of product lifetime extension (PLE) through new technology. • Four technologies are covered the most in the literature in relation to PLE. • These technologies are: Internet of things, additive manufacturing, big data, and artificial intelligence. • Identification of the key features of each technology and its contribution to PLE. • A conceptual framework and theory-based agenda for research is proposed about the technology-PLE nexus.
Dmitrijeva, J., A. Schroeder, A. Ziaee Bigdeli and T. Baines (2022): Paradoxes in servitization: A processual perspective, Industrial Marketing Management, 101(2792), pp.141-152
Servitization describes a paradoxical and lengthy transformation process in the field of manufacturing, requiring manufacturers to move from competing on the basis of their products to competing on the basis of their services; yet the delivery of these services relies on the production of high-quality products. Such transformations may take several years, necessitating manufacturers to balance the competing demands of both the product and service businesses, as well as navigating their interdependency. In order to illuminate these competing demands, and understand their progression over the course of a manufacturer’s servitization journey, the present study conceptualises a processual perspective on the paradoxes inherent in servitization. The conceptualisation of the processual perspective integrates a servitization stage model with established paradox theory to depict the paradoxical tensions that servitization creates, while also demonstrating how, and when, these emerge. The conceptualisation is applied to longitudinal data from three case studies that reconstruct the manufacturers’ experiences from the point of the initial exploration of servitization to the implementation of their outcome-based service offering. The findings identify how learning, belonging, organising and performing paradoxical tensions emerge over time, and how they unfold and change depending on the objectives and activities of the manufacturers’ servitization stage. • Study conceptualises a processual perspective on paradoxes in servitization. • Integrates servitization stage model with established paradox theory. • Longitudinal data reconstructs manufacturers’ paradoxical tensions. • Identifies learning, belonging, organising and performing tensions.
Favoretto, C., G. H. S. Mendes, M. G. Oliveira, P. A. Cauchick-Miguel and W. Coreynen (2022): From servitization to digital servitization: How digitalization transforms companies’ transition towards services, Industrial Marketing Management, 102(2793), pp.104-121
Servitization and digitalization are two business model innovations that have affected product companies. From the convergence of these two trends, digital servitization emerged as a novel concept. Digital servitization pushes product companies to radically transform their business model, creating new challenges for its implementation. This paper aims to uncover how digitalization fundamentally transforms product companies in their transition towards services. Based on a systematic review of the literature, we analyze a sample of 180 articles published between 2005 and 2020 using both descriptive and content analysis techniques. Our review thereby offers both theoretical and managerial contributions. We descriptively analyze the evolution of the research field. Furthermore, we propose a new unified definition of digital servitization and discuss nine servitization dimensions where digitalization influences servitization—motivations; strategy; service offerings; structure; culture; resources and capabilities; processes; performance; and servitization ecosystems—leading to a new conceptual framework for digital servitization. Finally, we identify several directions for future digital servitization research. • Servitization and digitalization are two business model innovations that have affected product companies. • This study offers a comprehensive review and synthesis of extant work from 2005 to 2020. • Insights into the effects of digitalization in servitized product companies are analyzed. • Seven research propositions emerge from a new conceptual framework proposed for digital servitization. • Research gaps and avenues for future research on digital servitization emerge from our review.
Ahmad, B., D. Liu, N. Akhtar and U. I. Siddiqi (2022): Does service-sales ambidexterity matter in business-to-business service recovery? A perspective through salesforce control system, Industrial Marketing Management, 102(2794), pp.351-363
Service-sales ambidexterity has recently been presented as a modern type of ambidexterity. Despite the huge prominence of ambidexterity’s antecedents, literature has overlooked the influence of salesforce control system on service-sales ambidexterity that may turn into service-related performance outcomes. This research examines three main research questions: (1) whether behavior-based and outcome-based control directly predicts service-sales ambidexterity; (2) how service-sales ambidexterity affects service recovery performance and service innovation capabilities; (3) how the relationship among antecedents and outcomes of service-sales ambidexterity shaped by the interaction effect of manager trust in salesperson and resistance to change. We tested our research framework using a sample of 344 sales employees. The findings advocate that behavior-based control have a negative impression on service-sales ambidexterity. In contrast, outcome-based control has a substantial positive impact on service-sales ambidexterity. The study findings also demonstrate the positive influence of service-sales ambidexterity on both service innovation capability and service recovery performance. The present research found that manager trust in salesperson and resistance to change played a significant moderating role between antecedents and outcomes. This study contributes to several literatures and recommends future direction for researchers and practitioners. • The research investigates behavior-based and outcome-based control effects on service-sales ambidexterity. • Service-sales ambidexterity influences service recovery performance and service innovation capabilities. • Manager trust in salesperson moderates the relationships between predictors and service-sales ambidexterity. • Resistance to change strengthen the association between service-sales ambidexterity and outcomes. • Empirical results confirm the postulated hypothetical relationships.
Tóth, Z., A. Sklyar, C. Kowalkowski, D. Sörhammar, B. Tronvoll and O. Wirths (2022): Tensions in digital servitization through a paradox lens, Industrial Marketing Management, 102(2795), pp.438-450
Two of the most disruptive changes in today’s business markets are servitization and digitalization. Their increasing convergence into digital servitization leads to tensions both within and between organizations. The authors investigate such intra- and interorganizational tensions by applying a paradox theory lens. The study draws on 56 depth interviews and multiple site visits from two cases in the aerospace and maritime industries. Linked to the paradoxes of organizing, learning, belonging, and performing, eight tensions emerge from the findings. The intra-organizational tensions include digitally enabled control, digital upkeep, professional identity, and performance priorities. In turn, the interorganizational tensions comprise platform-based coopetition, information superabundance, organizational identity, and data utilization. For practitioners working with digital services, this study suggests an audit of tensions to inform continued formulations of a mitigation strategy. • Explored eight intra- and inter-organizational tensions in digital servitization. • Paradox theory lens: paradoxes of organizing, learning, belonging, and performing. • Tensions in business networks reflect digital servitization’s highly networked nature. • Digital native tensions are specific to digital (but not traditional) servitization. • For managers, the tension audit shows each tension’s roots and response strategies.
Tuzovic, S., R. Mulcahy and R. Russell-Bennett (2022): A hostile tale of disclosure and betrayal: Business perceptions of offshoring services, Industrial Marketing Management, 102(2796), pp.74-88
Underpinned by affect infusion theory, this study investigates whether the disclosure of business-to-business (B2B) services being offshored leads to a negative emotional response, known as the hostility triad, and a sense of betrayal. A 2 × 2 survey experiment was employed, manipulating disclosure (disclosure vs. non-disclosure) and temporality of disclosure (past vs. future), and analyzed using ANOVAs and structural equation modeling. The results revealed that non-disclosure of offshoring of B2B services leads to significantly higher levels of negative emotions. Temporality of disclosure is also shown to play a moderating role. Further, modeling demonstrates that the hostility triad of emotions could be considered as a cumulative rather than a discrete set of emotions. These findings provide important implications for future theorizing regarding emotions in B2B marketing as well as policy implications regarding disclosure of relationship conditions. • This study provides new insights how B2B customer reactions are shaped by communications of offshoring and its timing. • Non-disclosure of offshoring of B2B services leads to significantly higher levels of negative emotions. • The hostility triad of emotions can be considered as a cumulative rather than a discrete set of emotions.
Randhawa, K., R. Wilden and M. A. Akaka (2022): Innovation intermediaries as collaborators in shaping service ecosystems: The importance of dynamic capabilities, Industrial Marketing Management, 103(2797), pp.183-197
Innovation is increasingly a cocreative process centered on developing new solutions and (re)shaping service ecosystems. Recent research provides important insights into the capabilities keystone actors deploy to drive innovation in their role as a “shaper”. These studies highlight other non-focal actors as supporters of innovation, but their roles and capabilities in shaping service ecosystems are less clear. To address this gap, we study innovation intermediaries in the shaping of a service ecosystem that encompasses many service providers beyond a central keystone actor. Using data from multiple cases within a healthcare service ecosystem, we show how innovation intermediaries make connections among diverse organizations as both shapers and supporters of service-ecosystem shaping. Specifically, innovation intermediaries shape ecosystem configuration by organizing resources and relationships and support ecosystem governance by adapting institutional arrangements. Our data reveal that the integration of these shaper and supporter roles scaffold the enactment of a complex role of collaborator. This role is filtered through a recursive design feedback loop of reflexivity and reformation, and grounded in dynamic capabilities of sensing, seizing, and reconfiguring. We find that the collaborator role is critical for co-designing joint value propositions and advancing the efforts of keystone actors to shape service ecosystems. • Innovation intermediaries as non-focal actors play important role in service ecosystem shaping. • They shape ecosystem configuration by organizing resources and relationships. • They support ecosystem governance by adapting institutional arrangements that foster innovation.
Sands, S., C. Campbell, C. Ferraro and K. Plangger (2022): Buffering B2B service failure: The role of customer engagement, Industrial Marketing Management, 103(2798), pp.47-60
Research has shown that customer engagement contributes positively to competitive advantage. It is well-established that in the process of building and maintaining customer engagement, companies may make mistakes (service failures) that can jeopardise the success of customer-firm relationships. Studies on customer engagement have mostly focused on individual consumers, making this understanding in business-to-business (B2B) settings limited. Further, research on the interaction between customer engagement and service failure is scant. Given the unique characteristics of B2B marketing and relationships, we investigate the role of industrial customer engagement in customer responses to service failure. This knowledge is critical given the detrimental effects of B2B service failure on business relationships, revenues and profitability. We report findings from three studies, which show that high levels of industrial customer engagement act as a buffer to the negative effects of service failure on customers. This finding is pronounced for failures that are small and repeated over time. B2B marketing managers are encouraged to develop, measure and monitor customer engagement, while simultaneously seeking mechanisms that allow customers to voice failures, especially those that may seem small but occur repeatedly. • This research investigates the role of industrial customer engagement in customer responses to service failure. • Drawing on the theory of hassle effects, we distinguish between different kinds of service failures: small, small and repeated, and large. • A series of studies show that high levels of industrial customer engagement act as a buffer to the negative effects of service failur. • The buffering effect is pronounced for failures that are small and repeated over time.
Marcon, É., A. Marcon, N. F. Ayala, A. G. Frank, V. Story, J. Burton, C. Raddats and J. Zolkiewski (2022): Capabilities supporting digital servitization: A multi-actor perspective, Industrial Marketing Management, 103(2799), pp.97-116
Digital transformation in business solutions is offering opportunities for servitization to become more digitalized. In this context, digital servitization requires the actors involved to perform new roles and develop new capabilities. Although servitization actor capabilities in the digital transformation context have been addressed in prior studies, the literature lacks a detailed understanding of how they operate according to different service types and different actor roles. Through a systematic literature review, our study aims to expound the capabilities required for digital servitization, for Base, Intermediate, and Advanced services, and analyze who of the main actors of the service triad (manufacturer, intermediaries, and customer) should own such capabilities. This analysis resulted in a final sample of 47 main articles addressing capabilities. We show how the structure of the service triad shifts the digital service provision based on the capabilities required by each actor. For instance, Base Services demand less capabilities, thus, intermediary actors play a less important role since they just execute services usually on behalf of a manufacturer in a more discrete capacity. For Intermediate Services, the intermediary actor becomes more important, with capabilities needed to deliver the digital solution. In Advanced Services, customers’ relationships with manufacturers become stronger, as this actor reassumes a central role in the solution offer, and intermediaries move to a supporting role again. Our analysis offers propositions for future research on digital servitization and practical implications on the capabilities required. • Capabilities for digital servitization in Basic, Intermediate, and Advanced services. • Capabilities required by manufacturers, intermediaries, and customers for digital servitization. • Capabilities for digital servitization are analyzed through a systematic literature review. • The study shows that digital servitization requires a multiactor perspective on capabilities. • We provide detailed descriptions of what each of the actors needs for different service levels.
Gunarathne, P., H. Rui and A. Seidmann (2022): Racial Bias in Customer Service: Evidence from Twitter, Information Systems Research, 33(2800), pp.43-54
Detecting and reporting systemic racial bias is an essential step toward the eradication of racial discrimination in our society. Doing so not only requires society members to voice and share their anecdotal experiences, but also relies on researchers to document systematic statistical evidence of racial bias. This paper documents the first large-scale evidence of business-to-customer racial bias on digital platforms on which the perpetrators are individual employees who act on behalf of a company and the victims are customers. This is in contrast to existing studies of racial bias on digital platforms that focus on peer-to-peer marketplaces in which both the perpetrators and the victims are individuals acting independently and on their own behalf. By analyzing more than 57,000 social media customer complaints to U.S. airlines and leveraging a variety of analytics techniques, including text mining and facial recognition, we present quantitative evidence that African American customers are less likely to receive a response when they complain than otherwise similar White customers. Furthermore, our deep learning–based falsification test shows that the bias is absent without the race-revealing visual cue. This study offers a practical yet powerful recommendation for companies: conceal all customer profile pictures from their employees while delivering social media customer service. This paper provides the first large-scale evidence of business-to-customer racial bias (B2C bias) on a digital platform, on which the perpetrators are individual employees who act on behalf of a company and the victims are customers. This is in contrast to existing studies of racial bias on digital platforms that focus on peer-to-peer marketplaces (e.g., eBay), in which both the perpetrators and the victims are individuals acting independently and on their own behalf. In particular, we present the first evidence of B2C bias in corporate social media customer service, a practice that has grown in popularity recently. Unlike traditional call centers, agents providing customer service on social media respond, on average, to fewer than half of the complaints they receive as per our analysis. We investigate the effect of a complaining customer’s racial identity, as revealed by the social media profile picture, on the chance of receiving a response. By analyzing more than 57,000 social media customer complaints to major U.S. airlines and leveraging a variety of analytics techniques, including text mining and facial recognition, we present quantitative evidence that African American customers are less likely to receive a response when they complain than otherwise similar White customers. Furthermore, our deep learning–based falsification test shows that the bias is absent without the visual cue that reveals racial identity. This study offers a practical yet powerful recommendation for companies: conceal all customer profile pictures from their employees while delivering social media customer service.
Saldanha, T. J. V., A. Kathuria, J. Khuntia and B. R. Konsynski (2022): Ghosts in the Machine: How Marketing and Human Capital Investments Enhance Customer Growth When Innovative Services Leverage Self-Service Technologies, Information Systems Research, 33(2801), pp.76-109
Rapid improvements in underlying technologies coupled with the diminution of contact-based interactions are resulting in a commensurate increase in the supply and demand of contact-free commerce, necessitating firms to offer innovative electronic services over self-service technologies (SSTs). This raises critical questions regarding value creation as prior research suggests mixed effects of SSTs on customers and unclear implications of SSTs for firm customer growth. These complexities are accentuated when firms offer innovative electronic services because of customers’ unfamiliarity with the services. In turn, this dynamic raises questions about (a) how SSTs influence firm customer growth, particularly when the firm’s electronic services are more innovative, and (b) what complementary investments help firms achieve customer growth from SSTs and innovative electronic services. In this study, the authors argue that innovative electronic services on SSTs aimed at bringing the enterprise to the customer will only be beneficial if managers enhance customers’ awareness of, trust in, and experience of SSTs through complementary investments in marketing and human capital. The authors use data from more than 3,800 credit unions in the United States and find support for their arguments. The findings can help managers improve the success of their digital transformation efforts of offering digital services on SSTs. Rapid improvements in underlying technologies coupled with the diminution of contact-based interactions are resulting in commensurate increases in the supply of and demand for innovative electronic services over self-service technologies (SSTs). This situation raises critical questions regarding value creation as prior research suggests mixed effects of SSTs on customers and unclear implications of SSTs for firm customer growth. These implications are accentuated when firms offer innovative electronic services because of customers’ unfamiliarity with the services. In turn, this dynamic raises vital questions about (a) how SSTs influence firm customer growth, particularly when the firm’s electronic services are more innovative, and (b) what complementary investments help firms achieve customer growth from SSTs and innovative electronic services. In this study, we conceptualize the theoretical mechanisms underlying these relationships and empirically examine seven-year longitudinal secondary data of over 3,800 credit unions in the United States to obtain three main findings. First, consistent with prior views of SSTs, we find no significant unconditional effect of SSTs on firm customer growth. Second, we find that the innovativeness of the firm’s electronic services (IES) negatively moderates the influence of SSTs on firm customer growth, suggesting that SSTs may positively influence growth when IES is low but may deter growth when IES is high. Third, marketing intensity and human capital intensity positively moderate the influence of IES on the effect of SSTs on customer growth. In supplementary analysis, we find similar results using cross-sectional primary data from a sample of 186 U.S. credit unions and their customers matched with secondary data. Our unique theoretical contribution lies in highlighting that innovative electronic services on SSTs aimed at bringing the enterprise to the customer may not be enough for firms to achieve customer growth unless those services are accompanied by complementary investments in marketing and human capital.
Castillo, V. E., D. A. Mollenkopf, J. E. Bell and T. L. Esper (2022): Designing technology for on‐demand delivery: The effect of customer tipping on crowdsourced driver behavior and last mile performance, Journal of Operations Management, (2802), pp.1
Crowdsourcing technology platforms specializing in on‐demand last mile delivery face a novel problem—heightened agent independence increases uncertainty in last mile delivery and has the potential to undermine operational performance. Uncertainty emanates from drivers’ competing interests, or opportunity costs. Rather than increase remuneration, some platforms have designed the technology to allow customers to tip, but the subsequent effects on driver behavior and last mile performance have not yet been studied. We explore this feature of on‐demand delivery technology design—customer tipping—and its implications for crowdsourced delivery performance. Using netnography and secondary data sources, we empirically ground an adaptive, multi‐agent hybrid simulation to propose how customer tipping impacts service performance through context‐contingent driver behavior. Our results generally indicate that tipping as a technology design feature mitigates uncertainty in the crowdsourced delivery fleet and reduces fulfillment times and unit delivery costs. We also find evidence suggesting that the impact of tipping on driver behavior is geography‐contingent, with tipping having unexpectedly detrimental effects in high population density areas relative to low‐density areas. We conclude by making a series of theoretical propositions and managerial implications about designing technology to facilitate crowdsourced delivery.
Alavi, S., E. Böhm, J. Habel, J. Wieseke, C. Schmitz and F. Brüggemann (2021): The ambivalent role of monetary sales incentives in service innovation selling, Journal of Product Innovation Management, (2804), pp.1
Complex service innovations constitute a cornerstone in the strategy of numerous industrial companies. The industrial sales force assumes an important role in the selling of these complex service innovations. For firms a key challenge in this respect resides in ensuring the sales force’s motivation for the selling of such innovations and effectively solving customers’ business problems. Past research frequently discussed monetary sales incentives as an effective tool to reinforce desired employee behaviors, but, to date, the discussion has failed to produce conclusive guidance for practitioners as to whether monetary sales incentives in fact can facilitate selling of complex service innovations. To clarify the effects of monetary sales incentives in this respect, we draw on self‐focus theory to disentangle how complex service innovation selling is shaped by the interplay of salesperson service incentives (i.e., the extent to which variable compensation depends on service turnover) and salesperson share of variable compensation (i.e., the percentage of compensation that depends on performance). To test these interactive effects, we use a multiple‐source data set including 294 salespeople, and match objective firm data. The results reveal that when service incentives are high, the share of variable compensation exhibits an inverse u‐shaped effect on a salesperson’s problem‐solving behavior, which is an important predictor of innovative service selling success. In addition, the share of variable compensation increases work effort, which in turn drives innovative service selling success. These findings shed light on the intricate “human”, employee‐related side of service innovation management and provide actionable implications for managers how to increase their firms’ innovative service selling success.
Wu, Y., S. Nambisan, J. Xiao and K. Xie (2022): Consumer resource integration and service innovation in social commerce: the role of social media influencers, Journal of the Academy of Marketing Science, 50(2805), pp.429-459
Social media technologies have given rise to influencers who shape the purchasing behaviors of their followers (peer consumers), thus enabling consumer-initiated social commerce. However, few studies have explored how social media influencers, and more broadly, consumers, actively integrate resources to engage in service innovation in social commerce. This qualitative study (involving two firms and their influencers) examines the emerging roles of social media influencers and their resource integration behaviors in service innovation. Drawing on the service-dominant logic and the technology affordance theory, the study advances a framework that identifies the resource integration behaviors that underlie two primary roles of influencers—communicator and innovator—and explains how social media technology affordances facilitate these behaviors, and thereby, the ensuing innovation outcomes. By focusing on the technology-mediated processes of social media influencers’ engagement in service innovation, we contribute to research and practice in consumer-led service innovation in the emerging digital world.
Yun, S. and K. Suk (2022): Consumer preference for pay-per-use service tariffs: the roles of mental accounting, Journal of the Academy of Marketing Science, (2806), pp.1-14
When consumers purchase service plans, they often fail to choose the lowest cost alternative because of their general tendency to avoid pay-per-use pricing. The present research examines the role of psychological process in consumer’ preference for price plans, focusing on the reasons for lower preference for pay-per-use plans. In addition, this research proposes a novel method to increase the preference for pay-per-use pricing by simply reframing it as a price plan with an initial allowance and gains and losses from the allowance. The results of seven studies demonstrate that the reframed pay-per-use plan is preferred to the regular pay-per-use plan, although the actual costs are the same. The increased preference for the reframed pay-per-use is caused by the change in the salient reference point that influences the perceived gain and loss of the price plan.
Kim, T., H. Lee, M. Y. Kim, S. Kim and A. Duhachek (2022): AI increases unethical consumer behavior due to reduced anticipatory guilt, Journal of the Academy of Marketing Science, (2807), pp.1-17
The current research focuses on examining how the use of artificial intelligence and robotic technology, emerging non-human agent innovations in service industries, influences consumers’ likelihood of engaging in unethical behavior. Previous research has shown that non-human (vs. human) agents are perceived differently along many dimensions by consumers (e.g., that they lack emotional capability), leading to various behavioral changes when interacting with them. We hypothesize and show across four studies that interacting with non-human (vs. human) agents, such as AI and robots, increases the tendency to engage in unethical consumer behaviors due to reduced anticipatory feelings of guilt. We also demonstrate the moderating role of anthropomorphism such that endowing humanlike features on non-human agents reduces unethical behavior. We also rule out alternative explanations for the effect, including differential perceptions about the agents (e.g., “warmth,” “competence,” or “detection capacity”) and other measures associated with the company capabilities.
Holthöwer, J. and J. van Doorn (2022): Robots do not judge: service robots can alleviate embarrassment in service encounters, Journal of the Academy of Marketing Science, (2808), pp.1-18
Although robots are increasingly used in service provision, research cautions that consumers are reluctant to accept service robots. Five lab, field, and online studies reveal an important boundary condition to earlier work and demonstrate that consumers perceive robots less negatively when human social presence is the source of discomfort. We show that consumers feel less judged by a robot (vs. a human) when having to engage in an embarrassing service encounter, such as when acquiring medication to treat a sexually transmitted disease or being confronted with one’s own mistakes by a frontline employee. As a consequence, consumers prefer being served by a robot instead of a human when having to acquire an embarrassing product, and a robot helps consumers to overcome their reluctance to accept the service provider’s offering when the situation becomes embarrassing. However, robot anthropomorphism moderates the effect as consumers ascribe a higher automated social presence to a highly human-like robot (vs. machine-like robot), making consumers feel more socially judged.
Fotheringham, D. and M. A. Wiles (2022): The effect of implementing chatbot customer service on stock returns: an event study analysis, Journal of the Academy of Marketing Science, (2809), pp.1-21
Advancements in conversational Artificial Intelligence (AI) have led to rapid growth in firms’ use of AI chatbots in customer service roles. While the shareholder wealth effects of AI chatbots have yet to be investigated, recent findings suggest that AI investment may contribute negatively to firm value. This cautionary evidence, and the growing prevalence of AI chatbots, underscore that a clear understanding of their impact on firm value is urgently needed. An event study of 153 AI chatbot announcements demonstrates that implementation of AI customer service chatbots generates a .22% abnormal stock return, indicating investors respond favorably to this practice. Importantly, B2B (vs. B2C) firms have substantially more to gain from implementing AI chatbot customer service. However, we find chatbot anthropomorphism interacts with customer type, as investors respond less (more) favorably to anthropomorphized chatbots used in B2B (B2C) customer service roles. Two additional studies provide support for this pattern of findings.
Bolton, R. N., A. Gustafsson, C. O. Tarasi and L. Witell (2021): Designing satisfying service encounters: website versus store touchpoints, Journal of the Academy of Marketing Science, (2810), pp.1-23
This study investigated how touchpoints moderate the antecedents of customer satisfaction with service encounters by comparing online and in-store encounters. Construal level theory was used within the Touchpoint, Context, Qualities (TCQ) Framework (De Keyser et al., 2020) to integrate a comprehensive model of how touchpoints—websites or stores—influence the magnitude of customer responses to qualities of service encounters. A hierarchical linear model (HLM) was estimated using survey data describing the service encounters of 2.4 million customers with a global retailer. Online customers weighed cognitive and behavioral qualities more heavily than in-store customers, whereas they weighed emotional and sensorial qualities less heavily. Moreover, random effects in the HLM model indicated that each country and store would have unique clientele effects for specific qualities. Since each firm has limited resources, this research offers guidance on key qualities in designing satisfying service encounters for each touchpoint and how qualities should be standardized and customized in global omnichannel environments.
Benjaafar, S., H. Bernhard, C. Courcoubetis, M. Kanakakis and S. Papafragkos (2022): Drivers, Riders, and Service Providers: The Impact of the Sharing Economy on Mobility, Management Science, 68(2811), pp.123-142
It is widely believed that ride sharing, the practice of sharing a car such that more than one person travels in the car during a journey, has the potential to significantly reduce traffic by filling up cars more efficiently. We introduce a model in which individuals may share rides for a certain fee, paid by the rider(s) to the driver through a ride-sharing platform. Collective decision making is modeled as an anonymous nonatomic game with a finite set of strategies and payoff functions among individuals who are heterogeneous in their income. We examine how ride sharing is organized and how traffic and ownership are affected if a platform, which chooses the seat rental price to maximize either revenue or welfare, is introduced to a population. We find that the ratio of ownership to usage costs determines how ride sharing is organized. If this ratio is low, ride sharing is offered as a peer-to-peer (P2P) service, and if this ratio is high, ride sharing is offered as a business-to-customer (B2C) service. In the P2P case, rides are initiated by drivers only when the drivers need to fulfill their own transportation requirements. In the B2C case, cars are driven all the time by full-time drivers taking rides even if these are not motivated by their private needs. We show that, although the introduction of ride sharing may reduce car ownership, it can lead to an increase in traffic. We also show that traffic and ownership may increase as the ownership cost increases and that a revenue-maximizing platform might prefer a situation in which cars are driven with only a few seats occupied, causing high traffic. We contrast these results with those obtained for a social welfare-maximizing platform. This paper was accepted by Charles Corbett, operations management.
Cohen, M. C., M. D. Fiszer and B. J. Kim (2022): Frustration-Based Promotions: Field Experiments in Ride-Sharing, Management Science, 68(2812), pp.2432-2464
The service industry has become increasingly competitive. One of the main drivers for increasing profits and market share is service quality. When consumers encounter a bad experience, or a frustration, they may be tempted to stop using the service. In collaboration with the ride-sharing platform Via, our goal is to understand the benefits of proactively compensating customers who have experienced a frustration. Motivated by historical data, we consider two types of frustrations: long waiting times and long travel times. We design and run three field experiments to investigate how different types of compensation affect the engagement of riders who experienced a frustration. We find that sending proactive compensation to frustrated riders (i) is profitable and boosts their engagement behavior, (ii) works well for long waiting times but not for long travel times, (iii) seems more effective than sending the same offer to nonfrustrated riders, and (iv) has an impact moderated by past usage frequency. We also observe that the best strategy is to send credit for future usage (as opposed to waiving the charge or sending an apologetic message). This paper was accepted by Vishal Gaur, operations management.
Hu, Y., C. W. Chan and J. Dong (2022): Optimal Scheduling of Proactive Service with Customer Deterioration and Improvement, Management Science, 68(2813), pp.2533-2578
Service systems are typically limited resource environments where scarce capacity is reserved for the most urgent customers. However, there has been a growing interest in the use of proactive service when a less urgent customer may become urgent while waiting. On one hand, providing service for customers when they are less urgent could mean that fewer resources are needed to fulfill their service requirement. On the other hand, using limited capacity for customers who may never need the service in the future takes the capacity away from other more urgent customers who need it now. To understand this tension, we propose a multiserver queueing model with two customer classes: moderate and urgent. We allow customers to transition classes while waiting. In this setting, we characterize how moderate and urgent customers should be prioritized for service when proactive service for moderate customers is an option. We identify an index, the modified c μ / θ -index, which plays an important role in determining the optimal scheduling policy. This index lends itself to an intuitive interpretation of how to balance holding costs, service times, abandonments, and transitions between customer classes. This paper was accepted by David Simchi-Levi, stochastic models and simulation.
Choi, S., S. X. Liu and C. Choi (2022): ROBOT–BRAND FIT THE INFLUENCE OF BRAND PERSONALITY ON CONSUMER REACTIONS TO SERVICE ROBOT ADOPTION, Marketing Letters, 33(2814), pp.129-142
Can every brand benefit from adopting service robots? To tackle this important question, we examined the interactive effects of brand personality (sincere vs. exciting) and service robot type (high-contact vs. low-contact) on customer reactions to service robot implementation. Results from three experimental studies indicate that customers tend to react negatively to high-contact robots when the brand had a sincere (vs. exciting) personality. This tendency is driven by the poor perceived fit between the sincere brand personality and the implementation of high-contact robots. However, such brand personality effects are mitigated in the adoption of low-contact robots. For a sincere brand adopting high-contact robots, we suggest that signaling warmth can enhance the perceived brand–robot fit and thereby reduce negative customer reactions.
Caruelle, D., P. Shams, A. Gustafsson and L. Lervik-Olsen (2022): Affective Computing in Marketing: Practical Implications and Research Opportunities Afforded by Emotionally Intelligent Machines, Marketing Letters, 33(2815), pp.163-169
After years of using AI to perform cognitive tasks, marketing practitioners can now use it to perform tasks that require emotional intelligence. This advancement is made possible by the rise of affective computing, which develops AI and machines capable of detecting and responding to human emotions. From market research, to customer service, to product innovation, the practice of marketing will likely be transformed by the rise of affective computing, as preliminary evidence from the field suggests. In this Idea Corner, we discuss this transformation and identify the research opportunities that it offers.
Perez, D., G. Oestreicher-Singer, L. Zalmanson and M. M. Rubin (2022): “No, Thanks”: How Do Requests for Feedback Affect the Consumption Behavior of Non-Compliers?, Marketing Letters, (2816), pp.1-15
Consumers’ feedback helps firms, yet most requests for feedback are unanswered. Research on question–behavior effects suggests that providing feedback on prior experiences might influence subsequent consumption behavior, but provides little insight regarding users who decline requests (e.g., by clicking “No, Thanks”). Accordingly, we investigate whether the exposure to a request to rate a consumption experience influences users’ future conversion regardless of their compliance. We carried out two large-scale field studies in collaboration with a leading international website that offers basic service for free, and additional desirable features for a fee (“freemium”). We exposed users to a rating request and measured their subsequent likelihood of converting to the paid service. Users exposed to a rating request were more likely to convert compared with users who were not exposed; this effect persisted over 90 days. Notably, users who complied with the request were no more likely to convert compared with non-compliers.
Kumar, S., E. G. Miller, M. Mende and M. L. Scott (2022): Language matters: humanizing service robots through the use of language during the COVID-19 pandemic, Marketing Letters, (2817), pp.1-17
Abstract: Service robots are emerging quickly in the marketplace (e.g., in hotels, restaurants, and healthcare), especially as COVID-19-related health concerns and social distancing guidelines have affected people’s desire and ability to interact with other humans. However, while robots can increase efficiency and enable service offerings with reduced human contact, prior research shows a systematic consumer aversion toward service robots relative to human service providers. This potential dilemma raises the managerial question of how firms can overcome consumer aversion and better employ service robots. Drawing on prior research that supports the use of language for building interpersonal relationships, this research examines whether the type of language (social-oriented vs. task-oriented language) a service robot uses can improve consumer responses to and evaluations of the focal service robot, particularly in light of consumers’ COVID-19-related stress. The results show that consumers respond more favorably to a service robot that uses a social-oriented (vs. task-oriented) language style, particularly when these consumers experience relatively higher levels of COVID-19-related stress. These findings contribute to initial empirical evidence in marketing for the efficacy of leveraging robots’ language style to improve customer evaluations of service robots, especially under stressful circumstances. Overall, the results from two experimental studies not only point to actionable managerial implications but also to a new avenue of research on service robots that examines customer-robot interactions through the lens of language and in contexts that can be stressful for consumers (e.g., healthcare or some financial service settings).
Pham, T., A. T. Lechner and F. Mathmann (2022): Fake smiles. Customer reactions to employees’ display inauthenticity and choice restrictions, Psychology & Marketing, 39(2818), pp.1078-1093
Frontline employees’ fake smiles (i.e., positive emotion display inauthenticity) frequently occur despite firms’ efforts to ensure real smiles in service delivery. Previous research on the effects of display inauthenticity on customers reveals considerable heterogeneity. Attempts to resolve this have largely been limited to stable and dispositional factors, which often escape managerial control. The present research investigates the impacts of display inauthenticity, choice restrictions, and their interaction on service performance. Choice restrictions may buffer inauthenticity effects as demonstrated by results from three factorial experiments in different contexts (e.g., restrictions of service provider choice in predelivery in Study 1 and in‐store choice restrictions during service delivery in Studies 2 and 3). Frontline employees’ display inauthenticity negatively affects service performance only if customers are subjected to low but not high choice restrictions. The interaction effect is explained by customers’ interdependent self‐construal and is generalizable to actual spending behaviors. Our findings inform managers about the interplay of increasingly common inauthenticity and choice restrictions due to market shocks such as COVID‐19 and provide insights into managerial interventions that can be used to mitigate the effects of inauthenticity on customers.
Becerril‐Castrillejo, I. and P. A. Muñoz‐Gallego (2022): Influence of satiation on consumer behavior in hospitality, Psychology & Marketing, 39(2819), pp.667-682
This study aims to contrast the nonlinear moderating effect of satiation—an emotional variable with proven influence over different consumer behaviors—on consumers’ willingness to pay (WTP). With a longitudinal survey, the authors measured WTP across two stays for the same type and category of tourist accommodation. The results indicate that satiation exerts a U‐shaped moderating effect on the relationship between WTP across two repeat purchases of hedonic use service. Further, satiated customers are willing to pay up to 11.2% less than their previous stay, which contributes to satiation, hospitality, and hotel pricing literature.
Song, J., J. Huang and Y. Jiang (2022): Mitigating the negative effects of service failure through customer identification, Psychology & Marketing, 39(2820), pp.715-725
This study investigated the effect of numerical customer identification (i.e., assigning numbers to identify customers) in the service context on the numbered customers’ reaction to service failures. We manipulated numerical identification in different ways (room number, customer number, table number, and order number) and measured customers’ tolerance of services across various settings (in a restaurant, a spa, and a café) in four studies. The results demonstrated that after being identified by a number, customers tend to exhibit a higher tolerance of service failures (Studies 1 and 2), and this effect is mediated by a sense of self‐dehumanization among the numerically identified customers (Study 3). Moreover, the investigated effect diminished when customers had heightened individuation (e.g., by disclosing personal information) to buffer against dehumanization (Study 4). Our findings contribute to the underexplored research area on customer identification, broaden the numerical research and dehumanization literature in marketing, and bring practical implications for firms to mitigate the negative effects of service failures and decrease customer dissatisfaction.
Lee, H. and Y. Yi (2022): The impact of self‐service versus interpersonal contact on customer–brand relationship in the time of frontline technology infusion, Psychology & Marketing, 39(2821), pp.906-920
In response to the widespread utilization of contact‐free technology in service interactions, this study compares the tradeoffs between self‐service technology and interpersonal contact by demonstrating the mediating effects of social comfort and perceived empathy, which eventually impact the overall brand evaluation. Specifically, this study reveals social comfort as an underlying mechanism behind digital customers’ preference for self‐service technology over interpersonal contact. Also, it recognizes that the relational cost of self‐service technology is its lack of empathy with customer needs and that the benefit of human contact is a fulfillment of the consumer need for caring. This study further reveals the moderating role of the service provider’s persuasive intent that can increase the benefit and reduce the drawback of interpersonal contact.
Cloarec, J., L. Meyer‐Waarden and A. Munzel (2021): The personalization–privacy paradox at the nexus of social exchange and construal level theories, Psychology & Marketing, (2822), pp.1
Marketing personalization requires firms to collect information that they can use to personalize their products or services, which might raise consumer privacy concerns. Prior studies on construal level theory suggest that happier Internet users would likely take future rewards in social exchanges (e.g., personalization–privacy trade‐offs) into greater consideration. Building on both social exchange and construal level theories, this article investigates the extent to which happiness with the Internet drives the personalization–privacy paradox, as well as the moderating role of experience sharing frequency as a proxy for reciprocity. An online survey administered to a representative sample of French consumers (
Pino, G., M. Nieto‐García and C. X. Zhang (2021): “My place is your place” ‐ Understanding how psychological ownership influences peer‐to‐peer service experiences, Psychology & Marketing, (2823), pp.1
This study aims to contribute to the growing literature on peer‐to‐peer services by investigating the relationships among three relevant aspects of such services, namely customers’ identification with service providers, customers’ feelings of psychological ownership toward the service setting (i.e., the providers’ resources), and customers’ interaction with service providers. Two empirical studies that investigate real peer‐to‐peer hospitality service experiences demonstrate that identification with service providers engenders a sense of psychological ownership of the service setting, which, in turn, enhances customers’ attitudinal and behavioral loyalty. Notably, this effect occurs only when customers engage in cooperative interactions with their service providers.
Tran, H. A., Y. Strizhakova, B. Usrey and S. Johnson (2021): Consumer cynicism in service failures, Psychology & Marketing, (2824), pp.1
Despite growing corporate commitments to being customer‐centric, many customers perceive firms as self‐driven and caring only about their own business interests. This sentiment is projected in consumer cynicism, or negative consumer attitudes based on the disbelief in the sincerity of firms’ motives and actions. We argue that consumer cynicism emerges in response to negative marketplace situations, such as service and product failures. Across four scenario‐based experiments and one video‐based experiment, our research examines cynicism as a key mediator, transmitting the effect of double deviation (i.e., a failure in delivery and in subsequent recovery) on negative electronic word‐of‐mouth and repurchase intention. We further demonstrate that consumer cynicism can be minimized when the provider uses cocreated recovery (i.e., engages consumers in recovery) even if the recovery fails and when the provider offers a strong empathetic apology (either before or after recovery failure). Our research contributes to consumer and service recovery research by highlighting an important but overlooked role of consumer cynicism in the context of double deviation. We also offer managerial insights into cocreation and empathetic apologies as cost‐effective recovery strategies to minimize cynicism.
Homayounfard, A. and G. Zaefarian (2022): Key challenges and opportunities of service innovation processes in technology supplier-service provider partnerships, Journal of Business Research, 139(2825), pp.1284-1302
Business-to-business (B2B) technology suppliers have the potential to contribute to the service innovation process in distinct ways. Because they work with multiple service providers, they can identify emerging market trends and technological requirements. However, they face different challenges and opportunities throughout their partnership in the service innovation process. This study contributes to the B2B service innovation literature by uncovering challenges and opportunities that technology suppliers face during the service innovation process and their partnership with service providers. We identify five groups of challenges/opportunities: (1) B2B partners’ level of knowledge, (2) B2B partners’ involvement in the back/front end, (3) B2B partners’ market approach, (4) the impact of B2B partners’ organizational processes, and (5) B2B partners’ business interactions. We develop a managerially distinct service innovation process typology that identifies different roles and characteristics of B2B partners. It further identifies the extent to which the service innovation process can be outcome and process-based.
Cavusgil, E., S. Yayla, O. Cem Kutlubay and S. Yeniyurt (2022): The impact of demographic similarity on customers in a service setting, Journal of Business Research, 139(2826), pp.145-160
Consumers share the physical environment with other consumers in various service settings. The presence of other consumers is a critical part of the service experience and can influence consumer behavior. What is the underlying impact of fellow customers in service settings? To address this research question, we examine how the demographic (age, race, gender, and income) similarity of other consumers in a service setting impacts one’s attitude and behavior. Specifically, we examine consumers’: (i) intention to return, and (ii) expenditure. Analysis of a large database (216,082 consumer visits to 236 restaurant brands in the United States and Canada) suggest that age, gender and income similarity between the focal customer and other customers increases intention to return. Furthermore, results indicate that age and income similarity among customers increases customer expenditure. However, race and gender similarity among customers decreases customer expenditure. Theoretical and managerial implications of the findings are discussed.
Wamsler, J., M. Natter and R. Algesheimer (2022): Transitioning to dynamic prices: Should pricing authority remain with the company or be delegated to the service employees instead?, Journal of Business Research, 139(2827), pp.1476-1488
[Display omitted] • When introducing dynamic pricing, prices should be set at firm not employee level. • Dynamic prices paid affect customers’ distributive fairness perception. • Distributive fairness perception mediates effect of price on behavioral outcomes. • Pricing authority (firm vs. employee) acts as a second stage moderator. • Expectations about more communal behavior of employees (vs. firm) explain effect. Dynamic pricing is typically implemented via pricing algorithms that react to varying levels of supply and demand. Some companies, such as Uber, also vary prices for different offers, such as standard cars or limousines for a ride. However, companies usually do not proceed to the next logical step and delegate pricing authority to their employees. This is astonishing as service employees often vary in service quality, possess unique business knowledge, hold close relationships with customers, and influence the overall customer experience. The authors investigate the consequences of delegating pricing authority to employees. They also investigate the responses of customers who face a situation where their firm transitions from fixed to dynamic prices set by the firm (control group) or service employees (treatment group). The findings demonstrate that the actual dynamic price paid affects customers’ distributive fairness perceptions, which influence their behavioral responses. The authors find support for pricing authority (firm vs. employee) acting as a second-stage moderator. The results provide supporting evidence for the stylized fact that firms keep the pricing authority with the company and do not delegate it to service employees instead.
Açıkgöz, A. and G. P. Latham (2022): Self-Set learning goals and service performance in a gig economy: A Moderated-Mediation role of improvisation and mindful metacognition, Journal of Business Research, 139(2828), pp.1553-1563
Drawing on goal-setting theory, the current research examines whether the indirect relationship between self-set, rather than assigned or participative, learning goals and an Uber driver’s service performance is positive and significant in an emerging work context, namely, the gig economy. In this regard, we hypothesized that there is a positive, significant relationship between self-set learning goals and a driver’s improvised ways to provide customer service. Building on metacognitive practice, we further hypothesized that a gig driver’s mindful metacognition positively moderates the relationship between improvisation and service performance. The overall hypothesis tested is that the indirect relationship between self-set learning goals and a gig driver’s service performance via improvisation is positive and significant, and this relationship is positively moderated by mindful metacognition. Data were collected from 149 gig drivers. Ordinary least squares regression-based path analyses revealed support for these hypotheses.
Brush, G. J. and G. N. Soutar (2022): A Rasch analysis of service performance in a tourism context, Journal of Business Research, 139(2829), pp.338-353
Advances in tourism research depend on the development and validation of measurement scales using appropriate psychometric techniques. However, scale development practice is dominated by classical test theory, despite its limitations. A Rasch analysis of international travel service performance scales across demographic, customer experience and service provider sub-groups is provided. Scales generally show high reliability, little disordering of the thresholds, and no substantive effects where multidimensionality is present. Some items exhibit limited discriminatory power, local dependence and measurement bias. Measurement invariance violations are prevalent in temporal dimensions where travelers exhibit diverse customer experience profiles. Employee knowledge and safety attributes appear organization-specific. Ethnicity impacts on relational aspects; response behavior regarding personal space is gender specific. Standardized safety-related scales may be inadvisable when comparisons across age and education cohorts are required. Accounting for measurement invariance influences the average location of groups on the latent continuum, and in some cases substantive mean difference results.
Blommerde-Winters, T. (2022): The roles of NSD performance and standardized service development processes in the performance of micro, small, and medium-sized enterprises, Journal of Business Research, 139(2830), pp.56-68
Despite its importance, for micro, small, and, medium-sized enterprises (MSMEs), the impact of new service development performance (NSDP) on organizational performance (OP) and the significance of formal or standardized service development processes (SSDPs) remains unknown. This study proposes that NSDP is positively associated with OP and that SSDPs positively moderate this direct effect. These and other hypotheses are tested with data collected from 801 Irish service MSMEs using Partial Least Squares Structural Equation Modelling (PLS-SEM) and multigroup analysis. Our results reveal that a positive relationship exists between NSDP and OP and we report the magnitude of this relationship for micro, small, medium-sized organizations; while the moderating effect of SSDPs was not supported for each of these groups. We thus provide novel empirical insights into service development for MSMEs, where our findings suggest that SSDPs are of particular importance for small organizations.
Schaefers, T., M. Leban and F. Vogt (2022): On-demand features: Consumer reactions to tangibility and pricing structure, Journal of Business Research, 139(2831), pp.751-761
• Conceptualization of on-demand features as sharing economy service innovation. • Consumers prefer access to intangible features. • Preference for flat rate pricing. • Both effects explained by fairness perceptions. As a service innovation in the sharing economy, on-demand features (ODFs) allow customers to temporarily access additional features of a product they already own in return for a fee. Using ODFs, manufacturers can infuse existing product-centric business models with sharing economy and servitization principles, in order to generate recurring revenues. This article conceptualizes the novel phenomenon and delineates it from other concepts. Moreover, based on two experimental studies and drawing from fairness theory, first evidence is provided for how consumers react to key characteristics of ODFs, namely their tangibility and pricing structure. While intangible, software-based ODFs appear to find acceptance, consumers perceive on-demand access to tangible, hardware-based features as unfair, which explains their reduced purchase intent. Moreover, fairness perceptions and behavioral intentions are more positive towards ODFs that offer flat rate pricing compared to those that employ a pay-per-use pricing structure.
Dyussembayeva, S., G. Viglia, M. Nieto-Garcia and A. S. Mattila (2022): Would you like to add a gratuity? When explicit requests hamper tipping, Journal of Business Research, 139(2832), pp.908-917
• Explicit request to tip has a negative effect on tip size. • Server’s physical presence alleviates the negative effects of an explicit request. • Social pressure reduces customers’ perceived control. • The higher customers’ perceived control, the higher the tip size. Many service providers explicitly ask customers for a tip. This may create social pressure, thus resulting in lower tips. Building on the theory of psychological reactance, we propose that an explicit request to tip has a detrimental impact on tip size. Across two studies, a field experiment and an online experiment, we test this effect and examine how the physical presence of the server moderates this relationship. We find that an explicit request to tip negatively affects tip size, while server’s physical presence alleviates this effect. The findings also show that social pressure hampers perceived control, which in turn has a detrimental effect on tip size. In light of these findings, service providers might want to revisit their strategies to enhance tipping.
Khelladi, I., S. Castellano, J. Hobeika, M. Perano and D. Rutambuka (2022): Customer knowledge hiding behavior in service multi-sided platforms, Journal of Business Research, 140(2833), pp.482-490
Hiding knowledge engenders economic losses. Customer knowledge is an external source praised by knowledge management scholars. Multi-sided Internet platforms become knowledge flow vehicles, nurturing customer knowledge. Knowledge hiding is widespread in services contexts impairing knowledge sharing. Firms need to integrate the knowledge-based customer experience to attain performance goals. Using social exchange theory and customer experience theory, we adopt a customer perspective to uncover the type of knowledge hidden and the motivations for customers to hide it on service multi-sided platforms. Combining narrative inquiry and critical incident technique we collected an original dataset of 51 narrative accounts of multi-sided platform users (Uber, Airbnb, and BlaBlaCar). We identify 10 major categories of hidden knowledge building on the identified critical incidents and five motivations to hide knowledge. The findings enrich the literature on knowledge hiding by providing the customer viewpoint. For practitioners, firms need to acknowledge customers’ knowledge hiding behaviors in multi-sided settings.
Mai, E. and S. Ketron (2022): How retailer ownership of vs. collaboration with sharing economy apps affects anticipated service quality and value co-creation, Journal of Business Research, 140(2834), pp.684-692
The sharing economy has disrupted the retailing industry by increasing competition as an emerging platform of service innovation. Today’s retailing is transforming to play a role in the sharing economy as consumers can complete transactions more easily among one another. However, it is unclear whether retailers should own sharing economy platforms or partner with other, independently owned platforms. Thus, the purpose of this research is to better understand how retailer involvement in the sharing economy (i.e., ownership of vs. collaboration with sharing economy apps) affects anticipated service quality and value co-creation. The current study examines the effects of retailer ownership vs. collaboration on service quality and customer value co-creation, respectively, and documents perceived credibility as an important mediator. The findings suggest that full ownership (vs. collaboration with an independent app) can lead customers to anticipate higher service quality and greater value co-creation due to higher perceived credibility.
Akter, S., M. M. Babu, M. A. Hossain and U. Hani (2022): Value co-creation on a shared healthcare platform: Impact on service innovation, perceived value and patient welfare, Journal of Business Research, 140(2835), pp.95-106
The exponential rise of sharing economy has accelerated the growth of shared healthcare platforms in recent times. Although a shared healthcare platform transforms the exchange of service offerings, insight remains elusive regarding its value co-creation (VCC) dynamics and their effects. Drawing on the DART (dialogue, access, risk assessment, transparency) framework, this study frames the overall effects of VCC on perceived service innovation, perceived value and patient welfare. Data were collected from 251 patients from a shared healthcare platform. The findings confirm the elements of the DART framework as the antecedents of VCC of a shared healthcare platform, which significantly influence critical service outcomes.
Li, Y., C. Zhang and S. Fang (2022): Can beauty save service failures? The role of recovery employees’ physical attractiveness in the tourism industry, Journal of Business Research, 141(2836), pp.100-110
Physical attractiveness, an important factor in tourism service encounter, has received increased attention recently. However, less attention has been devoted to its effects on tourism service recovery. The current research fills this gap by systematically examining whether, how, and when a recovery employee’s physical attractiveness affects tourists’ attitudes toward the recovery employee and the firm. Three experiments are carried out. Results show that a recovery employee’s physical attractiveness can positively improve tourists’ attitudes toward the recovery employee and the firm, and this effect works by decreasing tourists’ social distance perceptions. Moreover, the effect of recovery employee’s physical attractiveness is conditioned on gender congruence between the tourist and the recovery employee as well as the severity of service failure. This paper contributes at explaining the mechanism and mixed results of physical attractiveness in tourism service recovery. The managers can benefit from the findings for effectively managing employees’ physical presentation in service recovery.
Chang, W. and K. Kim (2022): Appropriate service robots in exchange and communal relationships, Journal of Business Research, 141(2837), pp.462-474
• We explore appropriate type of service robot in a given relationship orientation. • Higher satisfaction emerges when functional robots are aligned with exchange orientation. • Social robots are evaluated more favorably when matching with communal orientation. • The match effect is driven by perceptions of warmth or competence of the robot. This paper explores which type of service robot (functional vs. social) is evaluated more favorably depending on a firm’s communal or exchange relationship orientation and the underlying processes driving the appropriate match effect between type of service robot and relationship orientation. The results of two scenario-based experiments and one video-based study with respondents who actually experienced service robots reveal that higher customer satisfaction with the service robot emerges when functional (social) service robots are aligned with a firm’s exchange (communal) relationship orientation. Further, the match between social service robot and communal relationship orientation promotes customer satisfaction with the service robot primarily through perceptions of the warmth of the robot. In contrast, higher customer satisfaction with a functional service robot in an exchange relationship orientation results from increased perception of the competence of the robot. This study provides theoretical and practical implications about how to implement service robots in service encounters.
Best, B., K. Miller, R. McAdam and A. Maalaoui (2022): Business model innovation within SPOs: Exploring the antecedents and mechanisms facilitating multi-level value co-creation within a value-network, Journal of Business Research, 141(2838), pp.475-494
• To be sustainable, SPOs are increasingly engaging in value networks. • This requires SPOs to innovate their business models to foster value co-creation. • Value co-creation in a network is complex, spanning micro, meso and macro levels. • Antecedents and mechanisms of value co-creation differ across levels of context. • Context influences the exchange of resources and the interactions of stakeholders. To be sustainable, social purpose organisations (SPOs) are increasingly engaging in value networks. This enables them to improve service delivery through social and economic value co-creation (VCC). However, operating within a value network will require SPOs to innovate their business models. This is a complex activity due to their distinctive governance structures and funding arrangements and the need to align value processes across a multiplicity of stakeholders. This paper advances knowledge by exploring how SPOs innovate their business models to engage in VCC through a value-network. By analysing three SPO value networks, we provide new insights into the antecedents and mechanisms of VCC which span the micro, meso, and macro levels of context. We also illustrate the factors which underpin SPOs ability to embed VCC within their business models through operating in a value network.
Lehtonen, M. J., M. Vesa and J. T. Harviainen (2022): Games-as-a-Disservice: Emergent value co-destruction in platform business models, Journal of Business Research, 141(2839), pp.564-574
Digital distribution has enabled game studios to reach global audiences and treat mobile games as services rather than products, creating novel opportunities to develop value propositions through the games-as-a-service (GaaS) approach. Yet simultaneously, there are also negative consequences caused by a sharp focus on maximizing profits at the expense of customer enjoyment. Drawing on a study bridging game development and gameplay experience, we shed light on the negative consequences of GaaS. We introduce the concept of Games-as-a-Disservice that draws on value co-destruction research by highlighting how platform business models in mobile games have emergent properties that paradoxically seem to encourage the creation and maintenance of negative playing experiences. Disservice in game development is conceptualized through four analytical themes: predatory monetization, play as labor, support denial and closure denial. To counter these properties, companies could adopt participatory design methods for a more granulated understanding of who plays their games and why.
Snyder, H., L. Witell, A. Gustafsson and J. R. McColl-Kennedy (2022): Consumer lying behavior in service encounters, Journal of Business Research, 141(2840), pp.755-769
Whether they know it or not, firms interact with lying consumers on a daily basis. However, surprisingly little is known about consumer lying behavior and its role in service encounters. Based on two empirical studies of 2,976 consumer lies, the study sought to explore consumer lying behavior by developing and testing a comprehensive conceptual framework encompassing motives for lying, characteristics of the lie, and outcomes for consumers. Study 1 explores and details the components of the conceptual framework, and Study 2 further investigates and tests the relationships between the components of consumer lying behavior and the emotional, behavioral, and financial outcomes for consumers. The findings suggest new policies and how frontline employees might be trained and educated to address consumer lying behavior. The paper concludes by outlining an agenda for future research on lying behavior in service encounters.
Vakulenko, Y., J. Arsenovic, D. Hellström and P. Shams (2022): Does delivery service differentiation matter? Comparing rural to urban e-consumer satisfaction and retention, Journal of Business Research, 142(2841), pp.476-484
In the context of continuously growing e-commerce and the rising global count of e-consumers, e-retailers and logistics service providers need to differentiate and tailor their offerings to refine their operations and meet e-consumers’ needs. This study investigates how e-consumers’ residential-area type affects the satisfaction with delivery services and reuse intentions in relation to e-consumers’ ability to choose between delivery options. The aim was to explore and compare rural e-consumers to urban ones and conclude whether the service fitting can be performed without satisfaction loss. The results showed that for e-consumers from rural residential areas, the availability of different delivery options did not translate into greater satisfaction with the delivery service and reuse intention, while for urban residents, service diversity was linked to greater satisfaction.
Klein, J. F., K. Merfeld, M.-P. Wilhelms, T. Falk and S. Henkel (2022): Buying to share: How prosumption promotes purchases in peer-to-peer asset sharing, Journal of Business Research, 143(2842), pp.171-183
Advocates of the sharing economy cite sharing as a viable alternative to asset purchases and ownership. However, Peer-to-peer (P2P) asset sharing, as a service innovation in the sharing economy, enables consumers to capitalize on their asset ownership by providing others with access to those assets for a fee. These prosumers acquire and consume the asset but also provide it as a service sold to others. In exploring the connection between prosumers and asset manufacturers, this study particularly notes the implications of prosumption for initial asset acquisition. A review of existing P2P asset sharing initiatives, three focus groups, and two experimental studies illustrate a positive effect of prosumption on willingness to acquire an asset from manufacturers, especially expensive assets. These results challenge the conventional notion that sharing is exclusively an alternative to ownership. A mediation analysis further indicates that reduced burdens of ownership can explain the positive link between prosumption and willingness to purchase assets from manufacturers. As another novel contribution, this study reveals an interdependency between prosumers and P2P service users, such that prosumers consider their own and also other P2P users’ brand preferences when acquiring assets. In summary, and contrary to conventional wisdom, promoting prosumption via P2P asset sharing might increase sales by manufacturers.
Tran, T. T. H., K. Robinson and N. G. Paparoidamis (2022): Sharing with perfect strangers: The effects of self-disclosure on consumers’ trust, risk perception, and behavioral intention in the sharing economy, Journal of Business Research, 144(2843), pp.1-16
The transactional and disposable nature of liquid consumption has placed trust as the lifeblood of sharing economy service innovation, enabling billions of strangers across the globe to connect and share in the face of transaction risks. However, managers and service providers may not realize that self-disclosure acts as a basis to build trust and mitigate risk in the sharing economy. In four studies across different nations, we demonstrate that service providers’ self-disclosure not only generates consumer trust but also reduces their risk perception, which subsequently encourages legitimate transactions on sharing platforms. The findings reveal that when consumers and service providers are objectively similar, consumers do not pay much attention to service providers’ disclosed information. Conversely, in the case of objective dissimilarity, consumers are more attentive to personal and intimate information shared by service providers. Consumer self-esteem plays differential moderating roles in the link between service providers’ self-disclosure and consumer responses.
Wang, Y., Q. Tian, X. Li and X. Xiao (2022): Different roles, different strokes: How to leverage two types of digital platform capabilities to fuel service innovation, Journal of Business Research, 144(2844), pp.1121-1128
Despite growing attention to digital platform-based innovation, existing studies fail to investigate the ambiguous impact mechanism of digital platform capabilities on service innovation. Understanding this impact mechanism is critical for firms since many firms are still trapped in service innovation failure. Therefore, this research contributes to addressing this gap by taking a novel research approach with the knowledge management view (KMV), and analysis results based on a survey reveal that the digital platform capability on consumers (DPCC) and digital platform capability on businesses (DPCB) improve service innovation via knowledge sharing. This research also shows that big data analytics management capability (BDAM) strengthens the positive impact of the DPCC on knowledge sharing but weakens the positive impact of the DPCB on knowledge sharing. Additionally, the current research identifies a negative moderating role of digital business intensity on the relationship between knowledge sharing and service innovation.
Tóth, Z., E. Nemkova, G. Hizsák and P. Naudé (2022): Social capital creation on professional sharing economy platforms: The problems of rating dependency and the non-transferability of social capital, Journal of Business Research, 144(2845), pp.450-460
• Service innovation is studied on sharing economy platforms using Social Capital Theory. • Previously developed Social Capital is relatively non-transferable to/across platforms. • Reputation systems can hinder innovation due to the dependency on ratings and reviews. • Sharing economy platforms reshape networks by disintermediating established businesses. The sharing economy platforms facilitate collaboration across geographical boundaries and promote service innovation by reshaping traditional business networks. This study takes a Social Capital Theory perspective on how Social Capital (SC) is created on professional sharing economy platforms, with particular attention to the creative services industry. Our in-depth qualitative investigation draws on 35 interviews with freelance designers and platform clients based in 17 different countries. The study demonstrates that SC created outside sharing economy platforms is not readily transferred to these platforms, which represents a major difference from the dynamics of SC in more traditional settings. Furthermore, SC transfer between platforms is difficult. Building platform-specific SC ‘from scratch’ requires a significant effort and is highly dependent on reputation systems, in the form of ratings and reviews. We argue that the platforms’ reputation systems force members to become ‘slaves’ to ensuring their star ratings and reviews are as good as possible. In addition, we explore how platform members learn to build SC on the platforms beyond ratings and reviews. Overall, the study contributes to academic discussions on opportunities and challenges for service innovation within the sharing economy and introduces the application of Social Capital Theory to the context of sharing economy platforms.
Zhu, Z., X. Chen, J. Liu, M. Yang and X. Fan (2022): Your thanks make me work harder: A multiple identification perspective, Journal of Business Research, 144(2846), pp.461-471
• Receipt of customer gratitude contributes to employee occupational identification. • Receipt of customer gratitude fosters employee organizational identification. • Receipt of customer gratitude affects work effort via multiple-identification. • Other-orientation serves as a moderator in shaping employees’ identifications. Customers interact directly with service employees and influence their attitudes and behaviors, but the extant research mainly focuses on receipt of coworker or leader gratitude (i.e., intra-organization sourced gratitude), with little attention on receipt of customer gratitude (i.e., extra-organization sourced gratitude). Integrating emotions as social information theory with a social identity approach, this research aims to address this issue by exploring why and when receipt of customer gratitude contributes to employees’ work effort. Through a field study and an experiment, we found that: (1) receipt of customer gratitude promotes employees’ occupational and organizational identification, both of which in turn lead to increased work effort; (2) employees’ other-orientation can enhance the positive relationships between receipt of customer gratitude and occupational and organizational identification; and (3) employees’ other-orientation strengthens the positive relationship between receipt of customer gratitude and employees’ work effort through both occupational and organizational identification. These findings have notable implications for research and practice.
Esmark Jones, C. L., T. Hancock, B. Kazandjian and C. M. Voorhees (2022): Engaging the Avatar: The effects of authenticity signals during chat-based service recoveries, Journal of Business Research, 144(2847), pp.703-716
Marketing practitioners and consumers can benefit from more efficient communication by using online chats for customer service. However, consumers desire a genuine experience and if the online chat experience is not believed to be authentic, it can detract from the benefits offered by using these new technologies. In four studies, including one electroencephalogram (EEG) measurement study, the authors show that firms can increase perceived authenticity of chat agents by sending signals via the avatars used in the chat system. The results indicate that avatar authenticity can be enhanced when the avatar is female, and these effects are amplified when the avatar is dressed professionally or a different race than the consumer. This increased authenticity is shown to drive engagement, loyalty, and satisfaction. The results offer fresh insight on how the use of avatars could help firms improve customer perceptions of service for either human- or bot-supported chat experiences.
Chapman, A. and A. Dilmperi (2022): Luxury brand value co-creation with online brand communities in the service encounter, Journal of Business Research, 144(2848), pp.902-921
A constant challenge for luxury brands is identifying ways to add value to their offering, compensating for the high price charged. Previous research has highlighted that superior value is added when customers and brands collaborate by co-creating and introducing unique experiences to the offering. However, there is limited research on how brands and their customers co-create value in an online context. Online brand community engagement is central to this process. Drawing upon the service dominant logic and the luxury customer value framework, we conduct fifteen in-depth interviews with managers and fifty with customers of a luxury hotel brand, followed by a netnography of its online community. Τhis results in the development of a typology that supports online value co-creation. The results show that the pleasurable/experiential content provides the highest engagement. The study reinforces the benefit of using the experiential approach to build a successful content strategy within online luxury communities.
Cho, W., D.-J. Min and M. Dresner (2022): The impact of predicted quality and customer cost on quality assurance behavior, International Journal of Operations & Production Management, 42(2849), pp.409-439
Purpose: Based on cost of quality (CoQ) research, this study aims to highlight the importance of incorporating the costs to customers in contributing to service quality when examining how customers respond to possible service failures [quality assurance behavior (QAB)]. Consequently, this study also aims to show how the CoQ framework can be a useful tool to the service industry in determining enhancements in quality and related expenditures. Design/methodology/approach: Using the airline industry as a case example, this study empirically tests the impact of predicted service quality and its associated costs on an individual’s QAB (wait time spent at the departing airport) through revealed preferences. The study uses survey data from more than 4,000 passengers matched with travel-specific quality information archived by the US Department of Transportation (DOT). Findings: This study finds that customers are willing to increase their level of QAB when informed of an increased probability of service failure. This study also finds that the level of QAB varies depending on anticipated customer costs of avoiding or responding to service failures. Practical implications: Findings of this study emphasize the need for shared responsibility between service providers and their customers in making decisions on the provision of service quality, as helping customers adjust the appropriate level of QAB may result in greater efficiency and higher quality of service. Originality/value: This study conceptualizes and empirically tests causal relationships between expected quality and customer efforts (QAB), thus contributing to operations literature examining CoQ in a service setting. This study argues that it is critical to consider shared responsibilities between co-producers (service providers and customers) in service operations studies.
Fu, W., M. Zhang, X. Zhao and F. Jia (2022): Interplay between servitization and platforms: a longitudinal case study, International Journal of Operations & Production Management, 42(2850), pp.471-499
Purpose: This paper aims to empirically explore the evolution of servitization and how platforms affect the transition between the stages of servitization. Design/methodology/approach: The authors conducted an in-depth case study of a Chinese manufacturer (i.e. Haier) using a longitudinal design. Three rounds of data collection were conducted between 2014 and 2020. The authors carried out 50 semi-structured interviews and 11 workshops to collect data from senior and middle managers of Haier and its business partners. Findings: The authors found that Haier’s servitization journey includes three stages (i.e. product-oriented solution, integrated solution and smart connected solutions) that evolve in the target of the services and the digital components of the solutions. Haier has also developed three types of platforms (i.e. service platform, supply chain platform and platform ecosystem) to support the implementation of servitization. The empirical evidence reveals that platforms can address the complexities that emerged when Haier implements the different stages of servitization as well as enable Haier to transition from one stage of servitization to the next. Originality/value: This study enhances the current understanding of the evolution of servitization and the roles of digital technologies in the transition between the stages of servitization. It also provides empirical evidence regarding how the platform approach enables the development of servitization. By clarifying the interplay between servitization and platforms, this study provides guidelines for managers on how to develop platforms to both advance and benefit from servitization.
Sorkun, M. F., O. Yurt and J. Hsuan (2022): Service modularity in e-learning programs: an analysis from the perceived usefulness perspective, International Journal of Operations & Production Management, 42(2851), pp.637-660
Purpose: This study investigates the effects of service modularity on the perceived usefulness (PU) of e-learning programs through the perceived ease of use (PEoU) and service customization. Design/methodology/approach: Structural equation modeling was used to test four hypotheses with survey data from 517 undergraduates in Turkey. Findings: Results show that service modularity affects the PU of e-learning programs through the PEoU. Service customization negatively moderates the effect of service modularity on the PEoU, but positively moderates the effect of the PEoU on the PU of e-learning programs. Practical implications: This study offers insights that support the decisions of policymakers and higher education institutions on how to design appealing e-learning programs cost-effectively. Social implications: This study reveals the determinants of the PU of e-learning, which could support the democratization of access to higher education in emerging countries where barriers to higher education are relatively greater than in developed countries. Originality/value: The concept of service modularity is explored in the e-learning context from the students’ perspective. This study shows that the standardized interfaces across course modules increase the PU of e-learning programs by improving the ease of use. It also shows, interestingly, that service customization, enabled by modularity, is not always appreciated by service consumers, because of the potential extra effort demanded in communicating their unique needs to service providers.
Parast, M. M. and A. Oke (2022): To focus or not: investigating the viability of the “focused factory” concept in firms facing service disruptions, International Journal of Operations & Production Management, 42(2852), pp.661-686
Purpose: In this paper, the authors draw from the concept of a “focused factory” to examine whether a focused strategy provides superior performance over a non-focused strategy in firms experiencing service disruptions. Design/methodology/approach: The authors test their hypotheses using panel data of the US domestic airline industry from 1998 to 2019. Findings: Overall, the study findings show that a focused strategy provides superior financial performance over a non-focused strategy in both stable environments and unpredictable environments. The authors also find that the effect of service disruptions on profitability is less pronounced for firms following a focused strategy. This shows that focused firms need to grow over time to sustain profitability. Their post hoc analysis shows that for a non-focused strategy (but not for a focused strategy), firm size moderates the effect of service disruptions on profitability. This suggests that a firm pursuing a non-focused strategy can mitigate the negative effect of service disruptions by increasing its size. Originality/value: This is the first study that examines the effectiveness of the focused strategy in mitigating service disruptions. The results provide further support for the effectiveness of the focused strategy in responding to service disruptions in service organizations.
Hu, K., G. Allon and A. Bassamboo (2022): Understanding Customer Retrials in Call Centers: Preferences for Service Quality and Service Speed, Manufacturing & Service Operations Management, 24(2853), pp.1002-1020
Problem definition: Customers are likely to initiate retrial calls when their previous contact with a call center fails to deliver a satisfactory resolution. According to industry reports, retrials are listed as a top annoying issue for customers and hurt call centers’ profits. Though recognizing this problem, call centers find it challenging to reduce retrials without overshooting their operating expenses. Our research aims to empirically understand the mechanism of customer retrials and then provide economically feasible solutions to reduce retrials. Academic/practical relevance: Little empirical research has been done to understand customers’ strategic retrials, and theoretical research studies retrials by assuming the degree to which pickup speed and service quality impact retrials. Our research empirically investigates the mechanism of customer retrials by studying whether speed and quality truly matter and, if so, how strong the impact is from each of them and whether the impacts are different across various customer segments. The quantified mechanism can then guide service providers to reduce retrials cost-effectively. Methodology: We use a random-coefficient dynamic structural model to characterize customer decisions in pursuing a satisfactory resolution and estimate the parameters from call-by-call records of a uniquely designed call center. Our model tracks customer decisions in the online waiting stage, in which customers are waiting for an agent but weighing whether to abandon, and in the off-line waiting stage, in which customers are not directly connected but are actively debating whether to retry. Utilizing the hybrid system that sequentially places customers into queues for three distinct quality service groups, we disentangle the effects of pickup speed and service quality on customers’ abandonment and retrial decisions. Results: Our estimations confirm that high service quality and quick pickup speed reduce retrials. Moreover, we discover that private customers are more sensitive to quality but less sensitive to speed compared with business customers. We suggest two service designs to reduce retrials cost-effectively by tailoring services to customer preferences. One reallocates the service groups for different customer segments without expanding the system, and the other adjusts the staffing ratios by hiring low-cost, ordinary-quality agents. Under the two tailoring designs, business customer surplus increases by up to 14.4% and private customer surplus by up to 14.9%. Managerial implications: First, our research highlights the importance of recognizing customers’ off-line decisions, which are impacted by online service offerings and, in turn, affect future online service operations. Neglecting customer retrials leads to suboptimal service designs. Second, by understanding the mechanism of customer retrials empirically, our research guides call centers to reduce retrials cost-effectively with speed–quality balance. Third, our research develops a practical analysis framework for service providers to quantify customer preferences and design tailoring services.
Perakis, G. and C. Thraves (2022): On a Variation of Two-Part Tariff Pricing of Services: A Data-Driven Approach, Manufacturing & Service Operations Management, 24(2854), pp.1369-1387
Problem definition: We present a data-driven pricing problem motivated from our collaboration with a satellite service provider. In particular, we study a variant of the two-part tariff pricing scheme. The firm offers a set of data plans consisting of a bundle of data at a fixed price plus additional data at a variable price. Most literature on two-part tariff problems focuses on models that assume full information. However, little attention has been devoted to this problem from a data-driven perspective without full information. One of the main challenges when working with data comes from missing data. Methodology/results: First, we develop a new method to address the missing data problem, which comes from different sources: (i) the number of unobserved customers, (ii) customers’ willingness to pay (WTP), and (iii) demand from unobserved customers. We introduce an iteration procedure to maximize the likelihood by combining the expectation maximization algorithm with a gradient ascent method. We also formulate the pricing optimization problem as a dynamic program (DP) using a discretized set of prices. From applying Sample Average Approximation, the DP obtains a solution within 3.8% of the optimal solution of the sampled instances, on average, and within 18% with 95% confidence from the optimal solution of the exact problem. By extending the DP formulation, we show that it is better to optimize on prices rather than bundles, obtaining revenues close to optimizing jointly on both. Managerial implications: The sensitivity analysis of the problem parameters is key for decision makers to understand the risks of their pricing decisions. Indeed, assuming a higher variability of customers’ WTP induces higher revenue risks. In addition, revenues are barely (highly) sensitive to the customers’ assumed WTP variability when considering a high (low) number of unobserved customers. Finally, we extend the model to incorporate price-dependent consumption.
Wang, Y., A. Y. Ha and S. Tong (2022): Sharing Manufacturer’s Demand Information in a Supply Chain with Price and Service Effort Competition, Manufacturing & Service Operations Management, 24(2855), pp.1698-1713
Problem definition: This paper investigates the issue of sharing the private demand information of a manufacturer that sells a product to retailers competing on prices and service efforts. Academic/practical relevance: In the existing literature, which ignores service effort competition, it is known that demand signaling induces an informed manufacturer to distort the wholesale price downward, which benefits the retailers, and so, they do not have any incentive to receive the manufacturer’s private information. In practice, many manufacturers share demand information with their retailers that compete on prices and service efforts (e.g., demand-enhancing retail activities), a setting that has not received much attention from the literature. Methodology: We develop a game-theoretic model with one manufacturer selling to two competing retailers and solve for the equilibrium of the game. Results: We show how an informed manufacturer may distort the wholesale price upward or downward to signal demand information to the retailers, depending on the cost of service effort, the intensity of effort competition, and the number of uninformed retailers. We fully characterize the impact of such wholesale price distortion on the firms’ incentive to share information and derive the conditions under which the manufacturer shares information with none, one, or both of the retailers. We derive conditions under which a higher cost of service effort makes the retailers or the manufacturer better off. Managerial implications: Our results provide novel insights about how service effort competition impacts the incentives for firms in a supply chain to share a manufacturer’s private demand information. For instance, when the cost of effort is high or service effort competition is intense, a manufacturer should share information with none or some, but not all, of the retailers.
Liu, H. and Y. Yu (2022): Incentives for Shared Services: Multiserver Queueing Systems with Priorities, Manufacturing & Service Operations Management, 24(2856), pp.1751-1759
Problem definition: We study shared service whereby multiple independent service providers collaborate by pooling their resources into a shared service center (SSC). The SSC deploys an optimal priority scheduling policy for their customers collectively by accounting for their individual waiting costs and service-level requirements. We model the SSC as a multiclass M / M / c queueing system subject to service-level constraints. Academic/practical relevance: Shared services are increasingly popular among firms for saving operational costs and improving service quality. One key issue in fostering collaboration is the allocation of costs among different firms. Methodology: To incentivize collaboration, we investigate cost allocation rules for the SSC by applying concepts from cooperative game theory. Results: To empower our analysis, we show that a cooperative game with polymatroid optimization can be analyzed via simple auxiliary games. By exploiting the polymatroidal structures of the multiclass queueing systems, we show when the games possess a core allocation. We explore the extent to which our results remain valid for some general cases. Managerial implications: We provide operational insights and guidelines on how to allocate costs for the SSC under the multiserver queueing context with priorities.
Roet-Green, R. and A. Shetty (2022): On Designing a Socially Optimal Expedited Service and Its Impact on Individual Welfare, Manufacturing & Service Operations Management, 24(2857), pp.1843-1858
Problem definition: We consider the problem faced by a welfare-maximizing service provider who must make a decision on how to split a fixed quantity of resources between two variants of the service: a standard variant and an expedited variant. The service is mandatory, but customers can choose between the two variants. Choosing the expedited variant requires enrollment that incurs a fixed cost per period. Customers are strategic and have the same cost of waiting but are heterogeneous in the rate at which they use the service. Academic/practical relevance: The option of expedited security at U.S. airports (TSA PreCheck) is an instance where this problem arises. As has been the case with the PreCheck program, providers that offer expedited service may face criticism from customers, with the main concern being that the diversion of resources to expedited services increases wait time for regular customers. This has important policy implications for the provider, especially a government organization such as the TSA. Existing literature has focused on service differentiation as a means to maximize profit or overall social welfare, but its effect on individual customers has received little attention. Methodology: We find customer’s equilibrium decisions for any allocation choice made by the provider. Using the equilibrium result, we solve for the allocation choice that maximizes social welfare. Results: Even when customers behave strategically, an expedited service offered in parallel to a standard service cannot only increase overall welfare, but also do so for each customer individually. We also find that in a scenario where some customers lose out because of the expedited service, improving the efficiency of the expedited service is more effective than decreasing the enrollment cost to help those who are worse off. Managerial implications: The gains from offering expedited service do not have to come at the expense of regular customers. When they do, we provide recommendations for which decision levers are most effective at making the system fair.
Wang, R., C. Ke and S. Cui (2022): Product Price, Quality, and Service Decisions Under Consumer Choice Models, Manufacturing & Service Operations Management, 24(2858), pp.430-447
Problem definition: In this paper, we develop an integrated framework to study a firm’s joint decisions on product price, quality, and service duration in a variety of monopolistic and competitive scenarios. Academic/practical relevance: Product price, quality, and ancillary service (such as maintenance and factory warranty) are arguably among the most important factors consumers consider when making a purchase decision. Meanwhile, they are also seen as effective instruments for firms to achieve market segmentation. We consider a cost structure for a firm in which the service cost depends on the product quality level. In particular, if quality is associated with product reliability (respectively, complexity), the service cost would decrease (increase) in the quality level. Methodology: We adopt the widely used multinomial logit model and the nested logit model to study consumers’ choice behavior and employ mixed-integer optimization and game theory to conduct analyses. Results: We find that with multiple substitutable products being offered, it is sufficient for a firm to provide only two maximally differentiated service durations at optimality. The quality of each product should be set at a level such that the marginal utility to consumers equals the marginal cost to the firm, independent of the decisions on other products, whereas the pricing decision should take into account all products. In addition, consumer surplus increases when the firm can make more decisions. Managerial implications: Regardless of product substitution and market competition, the optimal quality level and service duration for each product can be determined independently of other products. Moreover, service differentiation can benefit consumers and improve the firm’s profitability at the same time.
Grant, B., I. Gurvich, R. K. Mutharasan and J. A. Van Mieghem (2022): Optimal Dynamic Appointment Scheduling of Base and Surge Capacity, Manufacturing & Service Operations Management, 24(2859), pp.59-76
Problem definition: We study dynamic stochastic appointment scheduling when delaying appointments increases the risk of incurring costly failures, such as readmissions in healthcare or engine failures in preventative maintenance. When near-term base appointment capacity is full, the scheduler faces a trade-off between delaying an appointment at the risk of costly failures versus the additional cost of scheduling the appointment sooner using surge capacity. Academic/practical relevance: Most appointment-scheduling literature in operations focuses on the trade-off between waiting times and utilization. In contrast, we analyze preventative appointment scheduling and its impact on the broader service-supply network when the firm is responsible for service and failure costs. Methodology: We adopt a stochastic dynamic programming (DP) formulation to characterize the optimal scheduling policy and evaluate heuristics. Results: We present sufficient conditions for the optimality of simple policies. When analytical solutions are intractable, we solve the DP numerically and present optimality gaps for several practical policies in a healthcare setting. Managerial implications: Intuitive appointment policies used in practice are robust under moderate capacity utilization, but their optimality gap can quadruple under high load.
Liu, H., Y. Yu, S. Benjaafar and H. Wang (2022): Price-Directed Cost Sharing and Demand Allocation Among Service Providers with Multiple Demand Sources and Multiple Facilities, Manufacturing & Service Operations Management, 24(2860), pp.647-663
Problem definition: We consider capacity sharing through demand allocation among firms with multiple demand sources and multiple service facilities. Firms decide on the allocation of demand from different sources to different facilities to minimize delay costs and service-fulfillment costs possibly subject to service-level requirements. If firms decide to operate collectively as a coalition, they must also decide on a scheme for sharing the total cost. Academic/practical relevance: We study capacity sharing through demand allocation in service systems in the presence of service-fulfillment costs. Our problem is motivated by service collaboration in healthcare involving public–private partnerships. Methodology: We formulate the problem as a cooperative game and identify a cost allocation that is in the core. Results: The cost-allocation scheme we identify is price-directed, and the cost of each firm consists of three components: (1) the delay cost incurred within the firm; (2) a cost paid for the capacity used by the firm at facilities owned by other firms; and (3) a payment received for fulfilling demand of other firms at facilities owned by the firm. Interestingly, we show that the cost-allocation scheme is equivalent to a market equilibrium—that is, it can be implemented in a decentralized fashion. We extend our analysis to settings where the capacity of each facility is endogenously determined and to settings where a service-priority policy is deployed. Our results are robust to a variety of generalizations: partial sharing, partial transfer, facilities modeled as general queueing systems, and convex delay costs. Managerial implications: Our findings provide guidelines for and insights into how to carry out demand allocation and cost sharing among different firms in the presence of service-fulfillment costs to foster service collaboration. In particular, the equilibrium market prices can be viewed as the prices/subsidies for service collaboration in a public–private partnership.
Fatehi, S. and M. R. Wagner (2022): Crowdsourcing Last-Mile Deliveries, Manufacturing & Service Operations Management, 24(2861), pp.791-809
Problem definition: Because of the emergence and development of e-commerce, customers demand faster and cheaper delivery services. However, many retailers find it challenging to efficiently provide fast and on-time delivery services to their customers. Academic/practical relevance: Amazon and Walmart are among the retailers that are relying on independent crowd drivers to cope with on-demand delivery expectations. Methodology: We propose a novel robust crowdsourcing optimization model to study labor planning and pricing for crowdsourced last-mile delivery systems that are utilized for satisfying on-demand orders with guaranteed delivery time windows. We develop our model by combining crowdsourcing, robust queueing, and robust routing theories. We show the value of the robust optimization approach by analytically studying how to provide fast and guaranteed delivery services utilizing independent crowd drivers under uncertainties in customer demands, crowd availability, service times, and traffic patterns; we also allow for trend and seasonality in these uncertainties. Results: For a given delivery time window and an on-time delivery guarantee level, our model allows us to analytically derive the optimal delivery assignments to available independent crowd drivers and their optimal hourly wage. Our results show that crowdsourcing can help firms decrease their delivery costs significantly while keeping the promise of on-time delivery to their customers. Managerial implications: We provide extensive managerial insights and guidelines for how such a system should be implemented in practice.
Arora, P., M. Rahmani and K. Ramachandran (2022): Doing Less to Do More? Optimal Service Portfolio of Non-profits That Serve Distressed Individuals, Manufacturing & Service Operations Management, 24(2862), pp.883-901
Problem definition: Many nonprofit organizations (NPOs) serve distressed individuals who seek relief from hardships such as domestic abuse or homelessness. These NPOs aim to maximize social impact by allocating their limited amount of resources to various activities. Academic/practical relevance: NPOs that serve distressed individuals face a complex task because their clients are often unable to articulate their specific needs. As a result, NPOs are driven to not only offer a variety of services to fulfill different needs, but also engage in advisory activities to minimize mismatches between services clients receive and their true needs. Methodology: We develop a model to study an NPO’s service portfolio and effort allocation decisions under resource constraint. Clients’ progress from distress to resolution is stochastic and depends on the NPO’s efforts in different stages of the service offering. Results: We show that it is optimal for resource-constrained NPOs to offer fewer services and invest more in advisory activities when different types of clients are not evenly mixed in the population, when delays in achieving resolution can significantly blunt the social impact created, when the loss of impact due to not serving a fraction of clients is low, or when there is a limited amount of earmarked funds. Otherwise, it is optimal for NPOs to diversify their service offerings and invest less in advisory activities. Managerial implications: Many NPOs are drawn to maximize the number of clients they serve by increasing the number of services they offer. However, we show that, depending on the characteristics of clients and services, NPOs might be able to generate higher social impact by prioritizing the speed of resolution rather than focusing on the number of clients who achieve resolution. We also present a practical application of our model in the context of domestic abuse.
Li, Y., T. Dai and X. Qi (2022): A Theory of Interior Peaks: Activity Sequencing and Selection for Service Design, Manufacturing & Service Operations Management, 24(2863), pp.993-1001
Problem definition: Putting customer experience at the heart of service design has become a governing principle of today’s “experience economy.” Echoing this principle, our paper addresses a service designer’s problem of how to select and sequence activities in designing a service package. Academic/practical relevance: Empirical literature shows an ideal sequence often entails an interior peak; that is, the peak (i.e., highest-utility) activity is placed neither at the beginning nor the end of the package. Theoretic literature, by contrast, advocates placing the peak activity either at the beginning or at the end. Our paper bridges this gap by developing a theory accounting for interior peaks. It also provides managerial implications for activity sequencing and selection. Methodology: We model the activity sequencing and selection problem as a nonlinear optimization problem and reformulate its objective as an additive function to generate structural insights. Results: We show that heterogeneity in memory decay explains the phenomenon of interior peaks. The optimal sequence is in either an “IU” or “UI” shape. An interior peak is optimal when the memory decay rate of the peak activity is neither too high nor too low. Managerial implications: Our research sheds light on service sequencing by weighing the phenomenon of interior peaks. In the presence of an interior peak, we show it is optimal to schedule a low point immediately before or after the peak activity, creating a contrast in customer experience. In addition, interior peaks arise partly because the peak activity is more memorable than others. Guided by this logic, as the peak activity becomes even more memorable, one might be tempted to move it to an earlier slot; we show that, counterintuitively, moving it to a later slot can be optimal. Our research also provides implications for activity selection by showing the optimal portfolio may consist of activities with the highest- and lowest-utility values but not those with medium values.
Zhao, W., Q. B. Liu, X. Guo, T. Wu and S. Kumar (2022): Quid pro quo in online medical consultation? Investigating the effects of small monetary gifts from patients, Production & Operations Management, 31(2864), pp.1698-1718
Recent years have seen robust growth in online medical consultation platforms. These platforms allow patients to access various healthcare services provided by doctors (e.g., health assessment, diagnosis, consultation, and supervision). In China, many such platforms allow patients to give small monetary gifts to doctors as an expression of gratitude. The implicit assumption is that expensive gifts influence doctors’ medical service and generate conflicts of interest but small gifts do not. However, there is little empirical evidence to support this assumption. In order to fill this gap in the literature, our study investigates whether small gifts from patients impact the quality of service provided to the gift‐givers (i.e., direct effect) and the nongivers (i.e., spillover effect). We examine three aspects of online medical service quality: (i) patient wait time, (ii) the amount of information in doctors’ responses, and (iii) the degree of emotional support in doctors’ responses. We find that despite the gifts’ negligible monetary value, doctors who receive gifts do reciprocate to the gift‐givers by providing them with more timely responses and greater emotional support. Furthermore, after receiving the small gifts, doctors may be slower in responding to nongivers and offer them less emotional support. We also investigate whether these effects (both direct and spillover effects) vary with doctors’ backgrounds, including their professional experience and geographic location. Our findings have both theoretical and practical implications for patients, online medical consultation platforms, and healthcare policy makers.
Abdulla, H., J. D. Abbey and M. Ketzenberg (2022): How consumers value retailer’s return policy leniency levers: An empirical investigation, Production & Operations Management, 31(2865), pp.1719-1733
Due to the ongoing and dramatic growth in the volume of consumer returns, retailers continue to struggle with the trade‐off in returns service strategies between implementing stricter return policies to lower operational costs and environmental footprint versus providing customers with lenient return policies to positively stimulate customers’ value perceptions and patronage intentions. This paper argues that effective management of this trade‐off requires a deep understanding of the process through which consumers perceive, evaluate, and respond to return policies that vary in terms of leniency across five key dimensions identified in the literature: monetary, time, effort, scope, and exchange. To this end, we theorize on a cognitive process model and empirically test the model using randomized experiments with diverse consumer samples. By viewing each of the five leniency dimensions as returns service design levers, we examine (1) how a retailer’s return policy leniency across different levers impacts a consumer’s intention to purchase from a retailer, through the influence of leniency on the perceptions regarding returns service quality and transaction costs that jointly form perceived returns service value, and (2) how different leniency levers are compared in terms of their impacts. We find significant heterogeneity in the effectiveness of different leniency levers in influencing consumers’ purchase intentions through increased perceived service quality, reduced perceived transaction costs, and subsequently increased perceived service value.
Li, Z., C. Liang, Y. Hong and Z. Zhang (2022): How Do On‐demand Ridesharing Services Affect Traffic Congestion? The Moderating Role of Urban Compactness, Production & Operations Management, 31(2866), pp.239-258
The role of information technology (IT) in managing operations that support environmentally sustainable growth has been emphasized a lot in operations management and information systems research. In this paper, we study the impact of the IT‐based on‐demand ridesharing platforms on an important aspect of sustainability—traffic congestion. Our theoretical prediction suggests two countervailing effects from the entry of ridesharing platforms to urban areas: the efficiency‐enhancing effect that reduces traffic congestion and the demand‐inducing effect that increases traffic congestion. We propose that the impacts of ridesharing services on traffic congestion should vary with urban spatial features. Given the theoretical tension, we investigate the impact of Uber entry on traffic congestion in urban areas of the United States with a focus on the moderating role of urban compactness. Based on a unique dataset that combines multiple archival sources, we empirically examine whether the entry of Uber’s on‐demand ridesharing service affects traffic congestion by using a difference‐in‐differences framework. Our empirical evidence indicates that ridesharing services significantly increase traffic congestion in compact areas. Meanwhile, we find some marginal evidence that ridesharing services decrease traffic congestion in sprawling urban areas. The results are robust to a series of additional analyses, including the use of alternative measures, relative time model, entry exogeneity test, and placebo tests. We conclude that the efficiency‐enhancing and demand‐inducing effects shape traffic congestion and that the net effect varies according to different levels of urban compactness. We provide circumstantial evidence for the underlying mechanisms by analyzing public transit and commuting characteristic data.
Wang, X., M. Jiang, W. Han and L. Qiu (2022): Do Emotions Sell? The Impact of Emotional Expressions on Sales in the Space‐Sharing Economy, Production & Operations Management, 31(2867), pp.65-82
The digital technology underlying the concept of Industry 4.0 has brought new disruptive changes to the economy. As an innovative service model, the unique characteristics of the space‐sharing economy require the understanding of emotional and psychological aspects in managing such a disruptive service model. We empirically examine the impact of unstructured emotional information that service providers offer (i.e., marketer‐generated content) on the popularity and sales of services in space‐sharing platforms (e.g., Airbnb) above and beyond objective qualities such as guest ratings or the size and amenities of the properties. For this, we leverage a unique dataset of a large‐scale sample of Airbnb listings from New York City (NYC). The results of a panel analysis and a series of robustness checks reveal a curvilinear association between the affective expression of service providers and the sales of their services, that is, the effect of emotional expressions is positive at low levels, but it diminishes at high levels. To address the potential endogeneity, we use a 2SLS‐IV approach, and the results validate our findings. Moreover, we conduct a randomized experiment to further establish causal inference. This study makes valuable contributions to the literature on service operation management and the sharing economy. Our findings shed light on how operations managers and service providers can use emotional information in space‐sharing platforms. We provide practical examples to guide their actions. These insights also have implications for other platform owners and users to leverage emotional information and improve outcomes.
Jost, P. J. and A. Ressi (2022): What can I do for you? Optimal market segmentation in service markets, Production & Operations Management, (2868), pp.1
This paper considers price competition in a market where two firms sell a homogeneous service to a continuum of customers differing with respect to some exogenous characteristic. Our paper’s novelty consists of explicitly acknowledging a distinctive property of many services in that firms incur customer‐specific service costs after the contract is signed. Hence, not only the customers’ willingness‐to‐pay and as such demand but also the firms’ supply are related to customer characteristics. In this paper, we shed light on the implications thereof for optimal pricing and market segmentation strategies in a monopoly as well as a duopoly market. Importantly, we stress the profitability of services by demonstrating that firms in highly competitive industries still earn positive expected profits in equilibrium.
Kang, K., S. Doroudi, M. Delasay and A. Wickeham (2022): A queueing‐theoretic framework for evaluating transmission risks in service facilities during a pandemic, Production & Operations Management, (2869), pp.1
We propose a new modeling framework for evaluating the risk of disease transmission during a pandemic in small‐scale settings driven by stochasticity in the arrival and service processes, that is, congestion‐prone confined‐space service facilities. We propose a novel metric,
Li, H. (2022): Converting free users to paid subscribers in the SaaS context: The impact of marketing touchpoints, message content, and usage, Production & Operations Management, (2870), pp.1
As software‐as‐a‐service (SaaS) becomes an increasingly popular business model, free‐trial acquisition, which allows prospective consumers to explore the service at no charge, also becomes a norm for SaaS companies. However, empirical research on the role of marketing communications, consumers’ free‐trial usage, and their interactions is still lacking. This study utilizes the granular data from a leading SaaS firm that provides prospects with free trials and examines the impact of and interactions among various marketing touchpoints, different types of message content, and the frequency and variety of free‐trial usage on consumers’ subscription decisions. Regarding advertising effectiveness, this study finds that consumer‐initiated touchpoints with all message content enhance conversion, but the firm‐initiated touchpoints conveying persuasive messages discourage conversion. Meanwhile, free‐trial usage does not always follow the old adage “the more, the merrier.” When usage is unpacked as frequency and variety, more frequent free‐trial usage encourages conversion, but exploring a greater variety of software leads to a lower conversion rate. For the focal firm, advertising and free‐trial usage attenuate each other in leading to conversion, except for the persuasive messages sent to frequent users and featured messages to variety‐seeking users. The robustness of these findings is tested, and two simulations demonstrate how the model helps firms determine when to contact consumers with additional display ads or emails. This research provides guidance to SaaS managers on the impact of advertising, free‐trial usage, and the interplay between both on conversion, which facilitates decisions on marketing strategies and resource allocations.
Oh, J. and X. Su (2021): Optimal Pricing and Overbooking of Reservations, Production & Operations Management, (2871), pp.1
We study the optimal design of reservations for a firm with limited capacity. The firm faces a random number of customers, each of whom has a random valuation for service. The reservation policy has two components: pricing and overbooking. For the former, the firm charges a reservation fee (at the time of reservation) and a service price (at the time of service). For the latter, the firm imposes a booking limit that caps the number of reservations it sells. Given the firm’s reservation policy, customers make reservations in advance and later decide whether to show up. Denying service to reservation holders is costly. We obtain the following equilibrium results. First, when demand is small relative to capacity, the firm’s pricing structure relies on reservation fees prepaid in advance, but when demand is large relative to capacity, it relies on payment received upon service. Second, when demand is low and/or predictable, the firm accepts all reservation requests, but when demand is high and/or variable, the firm uses a booking limit.
Pan, Y. and L. Qiu (2021): How Ride‐Sharing Is Shaping Public Transit System: A Counterfactual Estimator Approach, Production & Operations Management, (2872), pp.1
The new sharing economy model has introduced a dramatic, disruptive impact on the traditional industries by matching the demand and supply in real time. In this study, we examine how the entry of Uber, a ride‐sharing services digital platform, brings new disruptive changes in public transportation operations. Significant debate has surrounded whether the new ride‐sharing model siphoned riders from public transit or made public transit feasible for more riders, but no consensus has been reached. One reason could be that the commonly used difference‐in‐differences empirical strategy fails to account for time‐varying unobserved confounders. To address this issue, we introduce a class of counterfactual estimators (CEs) to strengthen our causal identification and perform diagnostic tests to validate model assumptions for each CE. A significant drop in passenger trips with buses is found after Uber entry from both the conventional two‐way fixed effects model and the CEs. Moreover, we provide empirical evidence that the entry of Uber has not significantly affected public demand response transportation, which indicates that Uber is not directly competing with other transportation services that aim to solve the “last‐mile problem.” Last, our additional analyses suggest that the effect of Uber entry is not uniform for different urban areas. All these empirical findings can be coherently explained in our framework of the substitution effect of Uber.