Advances in frontline interface technologies and devices are profoundly disrupting how organizations and customers interact to create and exchange value. Where once customer interactions were limited in variety, multiplicity, and complexity, today’s broadband Internet and wireless connection technologies defy limitations to enable organization-customer interactions of ever-increasing diversity and consistency across multiple points of customer contact. No longer are the frontlines inert backgrounds for organizational action involving customers; rather, they are evolving as sites of vibrant innovations and interventions that engage customers, enhance customer experiences, and motivate value (co)creation. To anchor this emergent field, we define organizational frontlines at the intersection of interfaces and interactions that connect organizations and their customers. We historically trace the use of "organizational frontlines" from its initial application in military and management domains through its current and proposed position in both academic and practitioner contexts. We illustrate our definition to highlight research opportunities and underscore the strategic implications for effectively managing organizational frontlines to secure competitive advantage. We conclude with a discussion of special issue articles and the exciting agenda they collectively engage.
Using a long-duration service experience, this study proposed and tested a servicescape transference effects phenomenon of two nested multidimensional servicescape satisfaction constructs—labeled perceived nestscape and surroundscape satisfaction—on one another and on loyalty intentions. Both perceived servicescape satisfaction constructs positively affected loyalty intentions. The direction of effects between the two satisfaction constructs was found to emanate from satisfaction with the larger surroundscape to satisfaction with the smaller nestscape rather than the opposite direction. All dimensions of the servicescapes were significant, but the design dimension contributed the most to perceived nestscape satisfaction, while the social dimension had the greatest influence on surroundscape satisfaction. These findings suggest that managers of servicescapes should proactively respond to all dimensions of both the larger and the smaller contiguous servicescapes to heighten customer satisfaction and loyalty. In addition, servicescape engagement positively affected perceived surroundscape satisfaction, but not perceived nestscape satisfaction. Servicescape engagement moderated the nestscape and surroundscape effects by weakening the impacts of both constructs on loyalty intentions. Consequently, managers should provide superior levels of engagement activities for seasonal migrants less concerned with the servicescape and enhance perceived servicescape satisfaction for less engaged consumers to induce loyalty.
Despite a long history of independent sales and service functions within organizations, customers are pressuring organizations to rethink their sales and service operations. Specifically, customers expect organizations to offer a "single face" of the firm rather than being forced to interact with multiple agents across both sales and service throughout their relationships. As firms attempt to meet these customer demands, they have countless options to integrate sales and service operations, but little is known about which strategies are most effective. This article attempts to shed new light into the challenges and potential benefits of sales-service integration, in an effort to spur research in this area and better inform this managerial challenge. Specifically, we formalize the concept of the sales-service interface, discuss how it relates to sales-service ambidexterity, and identify several opportunities for future research. Given the complexity of the sales-service interface, we contend that future researchers must view these issues through a multilevel lens and, as a result, we focus on identifying opportunities ideally suited for testing in a multilevel environment. The goal of this article is to provide a platform for researchers to tackle this challenging problem and generate new insights into how best to meet customer’s evolving demands.
Smart technologies are rapidly transforming frontline employee-customer interactions. However, little academic research has tackled urgent, relevant questions regarding such technology-empowered frontline interactions. The current study conceptualizes (1) smart technology use in frontline employee-customer interactions, (2) smart technology–mediated learning mechanisms that elevate service effectiveness and efficiency performance to empower frontline interactions, and (3) stakeholder interaction goals as antecedents of smart technology–mediated learning. We propose that emerging smart technologies, which can substitute for or complement frontline employees’ (FLEs) efforts to deliver customized service over time, may help resolve the long-standing tension between service efficiency and effectiveness because they can learn or enable learning from and across customers, FLEs, and interactions. Drawing from pragmatic and deliberate learning theories, the authors conceptualize stakeholder learning mechanisms that mediate the effects of frontline interaction goals on FLEs’ and customers’ effectiveness and efficiency outcomes. This study concludes with implications for research and practice.
As technology innovation rapidly changes service experiences, service designers need to leverage technology and orchestrate complex service systems to create innovative services while enabling seamless customer experiences. Service design builds upon contributions from multiple fields, including management, information technology, and interaction design. Still, more integration to leverage the role of technology for service innovation is needed. This article integrates these two service design perspectives, management and interaction design, into an interdisciplinary method—the Management and INteraction Design for Service (MINDS). Using a design science research approach, MINDS synthesizes management perspective models, which focus on creating new value propositions and orchestrating multiple service interfaces, with interaction design perspective models, which focus on technology usage and its surrounding context. This article presents applications of the MINDS method in two different service industries (media and health care) to demonstrate how MINDS enables creating innovative technology-enabled services and advances interdisciplinary service research.
Technology is rapidly changing the nature of service, customers’ service frontline experiences, and customers’ relationships with service providers. Based on the prediction that in the marketplace of 2025, technology (e.g., service-providing humanoid robots) will be melded into numerous service experiences, this article spotlights technology’s ability to engage customers on a social level as a critical advancement of technology infusions. Specifically, it introduces the novel concept of automated social presence (ASP; i.e., the extent to which technology makes customers feel the presence of another social entity) to the services literature. The authors develop a typology that highlights different combinations of automated and human social presence in organizational frontlines and indicates literature gaps, thereby emphasizing avenues for future research. Moreover, the article presents a conceptual framework that focuses on (a) how the relationship between ASP and several key service and customer outcomes is mediated by social cognition and perceptions of psychological ownership as well as (b) three customer-related factors that moderate the relationship between ASP and social cognition and psychological ownership (i.e., a customer’s relationship orientation, tendency to anthropomorphize, and technology readiness). Finally, propositions are presented that can be a catalyst for future work to enhance the understanding of how technology infusion, particularly service robots, influences customers’ frontline experiences in the future.
The advent of new forms of data, modern technology, and advanced data analytics offer service providers both opportunities and risks. This article builds on the phenomenon of big data and offers an integrative conceptual framework that captures not only the benefits but also the costs of big data for managing the frontline employee (FLE)-customer interaction. Along the positive path, the framework explains how the "3Vs" of big data (volume, velocity, and variety) have the potential to improve service quality and reduce service costs by influencing big data value and organizational change at the firm and FLE levels. However, the 3Vs of big data also increase big data veracity, which casts doubt about the value of big data. The authors further propose that because of heterogeneity in big data absorptive capacities at the firm level, the costs of adopting big data in FLE management may outweigh the benefits. Finally, while FLEs can benefit from big data, extracting knowledge from such data does not discount knowledge derived from FLEs’ small data. Rather, combining and integrating the firm’s big data with FLEs’ small data are crucial to absorbing and applying big data knowledge. An agenda for future research concludes.
This article contains a set of six invited commentaries written by leading scholars, expressing varied perspectives on the future of frontline research and on the frontline domain itself. The article accompanies the Journal of Service Research special issue on organizational frontlines. In their commentaries, the authors share insightful views on areas of personal interest ranging from employee emotion and customer relationship building to the effect of technology and its implementation at the organizational frontline. Included within each commentary are managerial insights and suggestions for needed research in the highlighted area.
A service failure and its negative effects can involve multiple customers at the same time, which suggests the need to understand the psychological mechanisms that underlie differential perceptions of group service failures (GSFs) versus individual service failures (ISFs) as well as their related outcomes. With an attributional framework, this article reports on two experiments that varied in their blame-attribution ambiguity. The results reveal that customers experience greater anger and show higher negative word-of-mouth and complaint intentions after a GSF versus an ISF. These differential effects are mediated by blame attributions, such that GSFs cause customers to blame the service provider more than ISFs. Customer entitlement also moderates the effect of the failure context (GSF vs. ISF) on blame attribution, contingent on perceptions of whether the service provider or customer violated an existing rule. Thus, we find that customers respond differently to service failures depending on the context. Managerial implications include separating customers from each other when GSFs are likely to take place, using techniques to redirect customer’s blame attributions to sources other than the service provider after a GSF and using customer scripts to minimize the occurrence of customer-induced service failures.
The literature establishes that customer and frontline employee (FLE) emotions converge during their encounters as a result of a transient, contagion-based process in which emotions flow from one actor to another. Recent evidence suggests, however, that this transient process does not produce emotional convergence among frontline dyads engaged in ongoing exchange, a surprising finding, given the wealth of evidence in support of the idea that customers and FLEs engaged in relational exchange strongly influence one another. In light of this evidence, we argue here that customers and FLEs engaged in ongoing exchange experience similar emotions not as a result of the transient transfer of emotions, but because they develop the tendency to undergo a similar emotional response to relationship events, a phenomenon we call the shared frontline experience. Informed by the social psychology literature, we support this idea by advancing a conceptual model that highlights the role of relationship closeness, personality similarity, and dyadic attachment style in producing the shared frontline experience. The proposed model also suggests that firms stand to benefit from the shared frontline experience of customers and FLEs if they provide the dyad with autonomy, a decision not without risk. Future research directions suggested by this perspective are discussed.
We investigate a service provider’s advance selling strategies in the presence of a channel intermediary who improves (i) consumers’ accessibility to the service or (ii) the service provider’s access to higher valuation segments. We evaluate the conditions under which dealing with such an intermediary may offset the attendant costs of providing suitable incentives. Our results indicate that the relative profitability of selling via the intermediary is affected by an interaction among marginal costs, capacity level, and the type of value the intermediary brings to the channel. We find that a capacity-constrained service provider may prefer selling via an intermediary that offers improved access to higher valuation consumers. However, when the service provider has excess capacity, indirect sales is preferred even when the intermediary is simply expanding the reach. In such a setting, both the service provider and the intermediary can enhance their profits in a symbiotic manner. Our findings have several implications for service providers. A service provider with limited capacity and relatively small marginal cost would be better off not contracting with an intermediary. In contrast, service providers with larger capacity and marginal cost will benefit from using an indirect channel despite the costs of incentivizing such an intermediary.
Although a considerable amount of research has been devoted to the formation of turnover intentions, the influence of pride in personal performance (PP), which is one of the most frequently felt workplace emotions, has been largely neglected. Employing a three-stage study design, this article explores how PP develops and how it affects turnover intentions among frontline employees. First, relying on affective events theory, a prestudy that employs a qualitative diary approach was performed to empirically identify work events that are the primary causes of PP. The prestudy was followed by Study 1, which applied a quantitative research design to determine which job characteristics promote these events. Finally, Study 2 utilized three-wave panel data of frontline employees to investigate the effects of PP on turnover intentions. The findings of the latter study confirm that PP triggers two processes that contrarily affect turnover intentions: (1) PP enhances job satisfaction, which decreases turnover intentions, and (2) PP increases self-efficacy, which enhances turnover intentions. However, further analyses reveal that the latter effect is not relevant for highly satisfied employees and that overall, increasing PP results in decreasing turnover intentions, suggesting that companies should foster PP to retain their frontline employees.
Both health care practice and academe recognize that organizations should modify their business practices to adopt cocreative behaviors and a service-dominant orientation. However, research has provided little understanding of the organizational culture that supports and facilitates cocreation. Contemporary organizational culture models are constrained from explaining cocreation, as they differentiate between an internal and external focus and do not acknowledge the interconnectedness of all actors across traditional organizational boundaries. This research conceptualizes organizational culture from a service-dominant perspective and provides a framework for a cocreation culture type. It utilizes two case studies in the health care industry, inclusive of 10 in-depth interviews and six focus groups, to conduct a systematic inductive approach to concept development. The findings reveal that a cocreation culture comprises five core cocreation behaviors: coproduction, codevelopment, coadvocacy, colearning, and cogovernance. Additionally, a series of supportive cocreation behaviors stimulate the interactive nature of cocreation: dialogue, shared market intelligence, mutual capability development, and shared decision-making. These behaviors are underpinned by organizational values of mutual respect, empowerment, and mutual trust. Health care practitioners are encouraged to create opportunities for customers to participate in cocreation activities related to their own treatment plans, ongoing strategic planning, and promotion and governance of the organization.
Although ethical scandals are a common phenomenon in the service industry, there is little research on the service-specific aspects of crisis management. In this research, we argue that frontline employees are of crucial importance after a scandal and examine how firms can secure the support of frontline employees following different kinds of scandals. Specifically, we demonstrate that corrective responses that address the internal causes of a scandal and ceremonial responses that guide attention to positive aspects unrelated to the scandal moderate the impact of different scandals on frontline employee support. Three experiments showed that frontline employee support was greater after scandals that involved a great rather than a small number of wrongdoers and after scandals that had been caused by high-ranking managers rather than low-ranking employees when a corrective response was implemented. In contrast, support was greater following scandals that had been committed by a few low-ranking employees rather than high-ranking managers when a ceremonial response was employed. These results have important implications by illustrating how companies can effectively restore frontline employee support following a scandal.
This article investigates the professional service provider’s role in the customer resource integration process for value creation, by drawing on research in the areas of resource integration, service experience, and role theory. Roles are flexible, in that behaviors associated with a role may vary according to the situation, expectations, and learned behaviors of the actors involved. In the context of professional service providers who support a customer’s resource integration, these role variations accordingly can be termed resource integration styles. Grounded in managerial practice, the current study relies on in-depth interviews to determine the styles that professional service providers use to support customer resource integration in a financial planning setting. The proposed typology of five styles (delegate, mentor, partner, coach, and validator), termed professional service providers’ resource integration styles (PRO-RIS), can be described by eight resource integration activity dimensions: participation ratio, frequency of interaction, deliberation, decision-making, updating, educating, connecting, and motivating. This research thus provides rich qualitative insights into how professional service providers can support customers’ resource integration processes, through the provision of appropriate resources. Notably, professional service providers can offer distinct benefits by varying the combination of resources provided to facilitate value creation. No single, best style exists; professional service providers should leverage the various styles described by PRO-RIS and adapt the eight resource integration activities as needed to support their customers.
Extant research established that customers’ expectations play an ambivalent role in the satisfaction formation process: While higher expectations are more difficult to meet and thus cause dissatisfaction, they simultaneously increase satisfaction via customers’ perceived performance owing to a placebo effect. However, to date, knowledge is scarce on the question under which conditions either the positive or negative effect of expectations on satisfaction prevails. Building on information processing theory, the authors hypothesize that an essential contingency of the indirect, placebo-based effect is the degree to which customers are able and motivated to process a service experience. Three studies with a total of over 4,000 customers in different service contexts provide strong evidence for this hypothesis. Thus, managers are well advised to provide a realistic or even understated prospect if the service context favors customers’ ability or motivation to evaluate. Conversely, if customers are neither able nor motivated to evaluate the service, increasing customer expectations represents a viable strategy to enhance satisfaction. Relatedly, if customers hold low service expectations, managers should foster customers’ ability and motivation to evaluate the service. In contrast, if service expectations are high, managers may benefit from reducing the likelihood that customers overly focus on the service performance.
To facilitate efficient and effective service delivery, firms are introducing self-service technologies (SSTs) at an increasing pace. This article presents a meta-analysis of the factors influencing customer acceptance of SSTs. The authors develop a comprehensive causal framework that integrates constructs and relationships from different technology acceptance theories, and they use the framework to guide their meta-analysis of findings consolidated from 96 previous empirical articles (representing 117 independent customer samples with a cumulative sample size of 103,729 respondents). The meta-analysis reveals the following key insights: (1) SST usage is influenced in a complex fashion by numerous predictors that should be examined jointly; (2) ease of use and usefulness are key mediators, and studies ignoring them may underestimate the importance of some predictors; (3) several determinants of usefulness impact ease of use, and vice versa, thereby revealing crossover effects not previously revealed; and (4) the links leading up to SST acceptance in the proposed framework are moderated by SST type (transaction/self-help, kiosk/Internet, public/private, hedonic/utilitarian) and country culture (power distance, individualism, masculinity, uncertainty avoidance). Results from the meta-analysis offer managerial guidance for effective implementation of SSTs and provide directions for further research to augment current knowledge of SST acceptance.
There is compelling evidence that incidents of customer rage are on the rise and not just in Western, individualistic societies. Changing social and economic conditions in collectivist societies (e.g., emerging consumerism and rising wealth in China) have spawned the emergence of customer rage in Eastern countries. To this end, we examine how customer rage–associated emotions, expressions, and outcomes differ across Eastern and Western cultures. Results drawn from 982 frontline service customers from two Eastern (China and Thailand) and two Western (Australia and United States) countries show that although consumers from Western cultures are more likely to exhibit rage emotions, consumers from Eastern cultures are more likely to report a desire for revenge and express their emotions in both overt and more subtle ways. That is, customers from Eastern cultures, while slow to display anger, once initiated, their rage expressions toward frontline service workers tend to be physical and vengeful. This result contradicts generally held beliefs that Eastern consumers are reticent to express negative emotions. With these findings in mind, and to minimize damaging customer rage incidents, firms regularly engaged in cross-cultural service encounters need to provide intercultural awareness and communications training that equip frontline employees to understand customs, manners, etiquette, and expectations of Eastern and Western cultures in general and even specific cultural segments.
We search for "missing links" in how the different social exchange relationships employees have with supervisors (i.e., leader-member exchange [LMX] differentiation) affect their unit service climate perceptions. Drawing on a social comparison perspective, we propose a model in which the different relationships service employees establish with supervisors negatively impact unit service climate through elevated unit relationship conflict. We further suggest that unit relationship conflict plays a mediating role as customer variability increases. Using data from head nurse-nurse relationships in 56 units of two major hospitals, our findings support the proposed linkages as well as reveal that employee perceptions of customer variability strengthen the troublesome positive link between LMX differentiation and unit relationship conflict. The results also indicate that unit relationship conflict mediates the relationship between LMX differentiation and unit service climate when customer variability is high but not low. Our results paint a more nuanced picture of the missing link in the leadership-climate interface by studying the dark side of leadership, a perspective that has yet to receive much scholarly attention. Findings reveal that managers who desire to keep relationship conflict in check need to keep LMX differentiation to a minimum, especially when customer variability is high compared to low.
Challenging the conventional perception that "power corrupts," the authors assert that activation of customer power before a service encounter can lead to less negative behavioral manifestations toward a service provider after a service failure. Three experimental studies help substantiate this contention. Study 1 shows a sequential mediation process of how increased power leads to a more positive secondary appraisal and lessens the perceived severity of a failure. This process ultimately leads to (1) lower intentions for revenge and (2) lower demanded compensation. Study 2 solidifies these findings using stimuli for power inducement easily replicable by service managers. Study 3 establishes the boundary conditions and finds that the positive effects of power in postservice failure only holds for a single service failure context but not a double deviation context. This research offers an integrated explanation of how power leads to more positive behavioral actions through a sequential mediation effect involving cognitive appraisals. In doing so, this research sheds light on the nuances of power in affecting customer behavior. The practical method of activating perceived power may motivate service managers to apply it to buffer the potential negative effects of service failure. However, caution is advised, as such effects may diminish in the context of a series of failed resolution attempts.
Managing the increasing number and complexity of customer-initiated interactions across multiple channels consistently and effectively has become a key priority for marketing academics and practitioners. To achieve this, it is imperative that marketers understand how and why customers choose the available channels. In this study, we distinguish between two types of interactions, purchases and communications, and argue that the nature of these interactions influences the way customers behave in the presence of multiple channels. Drawing upon perceived risk research, this study develops an integrated conceptual framework that provides a theoretical understanding of customer channel choice for these interactions. The framework is tested empirically in financial services and the results reveal that channel choices significantly differ for purchases and communications. Channel choices for purchases are more inertial and more strongly affected by attitudes (i.e., relationship quality) than for communications. At the same time, preference for a personal touch in channel choice is more pronounced for purchases than for communications, and marketing activities are more effective at driving channel choice for communications. These results offer some recommendations for managing interactions across channels more effectively. For example, the use of personal channels is advised for managing high-risk interactions (i.e., purchases), while for low-risk interactions (i.e., communications), firms can use marketing activities to migrate customers to cheaper channels.
This study establishes a social-cognitive model of consumer well-being to explain the psychological mechanism underlying the relationships between service organizations’ marketing strategies and consumer well-being. Using a two-wave longitudinal design, we surveyed 168 clients from a major credit counseling organization. Results show that organizational strategies influence consumers’ domain-specific well-being via social-cognitive variables (including self-efficacy, outcome expectations, and process expectations) and goal-pursuit processes (both goal setting and goal striving). Specifically, organizational strategies, including organizational support and organizational socialization, contribute to consumers’ goal intentions both directly and indirectly via outcome and process expectations at the goal-setting stage. In the goal-striving stage, goal intention leads to goal achievement, a path strengthened by organizational support. Goal achievement contributes to increases in consumers’ domain-specific well-being. Customers who are in the early or late stages of a service program are more likely to fail in achieving their goals than those who are in the middle of the program. This study sheds new light on transformative service research by demonstrating the role of the service organization in enhancing consumer well-being and suggests that service strategies should focus on shaping consumers’ social cognitions and facilitating their pursuit of valued personal goals.
Frontline employee behaviors can elicit gratitude, allowing service providers to reap benefits including positive word of mouth. However, research has begun to suggest some behaviors might instead elicit indebtedness, a different emotion not always associated with positive outcomes. Using a qualitative study, we construct a model grounded in the threat to self-esteem theory that delineates differences in employee behaviors that generate these two emotions and the consequences of their elicitation. The model is empirically tested in two studies. Consistent with the threat to self-esteem theory, the findings indicate that customer gratitude arises in supportive employee-customer encounters and drives positive relational behaviors. Conversely, customer indebtedness occurs in threatening employee-customer encounters and possesses the potential to deter positive relational behaviors. As a result, we encourage scholars to appreciate the differences between these two emotions and managers to promote employee behavior designed to generate gratitude and not indebtedness.
This article focuses on the locus of recovery (LOR) when failures occur in coproduced services. LOR refers to who contributes to the recovery. Based on the LOR effort, recovery can be classified into three types: firm recovery, joint recovery, and customer recovery. The authors develop a conceptual framework to examine the antecedents, consequences, and moderators of LOR and test the framework using three experiments. They find that the positive effect of customers’ self-efficacy on their expectancy to participate in recovery is stronger when they blame themselves for the failure than when they blame the service provider. Joint recovery is most effective in generating favorable service outcomes of satisfaction with recovery and intention for future coproduction. Furthermore, recovery urgency strengthens the effect of LOR; however, when a customer’s preferred recovery strategy is offered, such matching offsets the impact of recovery urgency. Our findings suggest several managerial implications for devising recovery strategies for service failures. Although having customers do the recovery may appear to be cost-effective, when customers are under time pressure, pushing them toward customer recovery against their preferences is likely to backfire. If a firm’s only available option is customer recovery, they should consider increasing customers’ sense of autonomy under resource constraints by aligning available recovery options with customer preferences. In contrast, joint recovery can be a win-win strategy—the customer is satisfied and the firm uses only moderate resources. It is also a more robust strategy that works particularly well under resource constraints and regardless of preference matching.
For most organizations, the ability to adapt a service experience is the responsibility of frontline employees (FLEs). Previous research on adapting or customizing a service has focused much of its attention on the internal motivations or predispositions of FLEs to adapt a service. However, the ability to adapt a service experience is often a function of management setting expectations and allocating appropriate resources. Regardless of the FLE’s internal motivation, service providers need to educate employees on how and when to adapt a customer’s service experience. Drawing on role theory, our study focuses on how mangers can promote adaptive behaviors with FLEs. Our findings identify two major processes in adapting a service experience: (1) recognition of customer needs through employee empathy and anticipation and (2) creation of alternatives to meet those needs through employee creativity. To further examine the managerial influence on adapting a service, we explore how the perceived service climate of the organization and employee empowerment influences FLEs’ ability to adapt a service. Results of our study indicate that perceived service climate has a larger impact on recognition of customer needs, while empowerment has a stronger influence on the creation of alternatives. From a managerial perspective, this research highlights that adaptive behavior can be fostered in FLEs and is not solely dependent on hiring the "right" people who are predisposed to adapt. The findings of our study have implications for business practice in managing service encounters, employee empowerment, and training.
Visual appeal is an important consideration in the design of interior service environments because attractiveness influences consumer behavior. Employing both an experiment and a field study, we show that visual complexity reduces a service environment’s attractiveness. Furthermore, we find that the complexity-attractiveness relationship is mediated by processing fluency and its instantaneous affective companion, pleasure. Our findings provide novel insights into the underlying process mechanism involved in channeling the effect of visual complexity on attractiveness. Furthermore, both studies confirm that customers’ field dependence moderates the complexity-fluency relationship and that shopping motivation (i.e., hedonic vs. utilitarian shopping goals) moderates the fluency-pleasure relationship. Our findings suggest that it is generally better to reduce the complexity of interior service environments. To achieve this, service firms should reduce the number of objects in the environment, enhance the visual organization and symmetry of their arrangement, and use fewer colors, textures, and materials.
Recent developments in marketing and service research highlight the blurring of boundaries between firms and customers. The concept of customer engagement (CE) aggregates the multiple ways customer behaviors beyond transactions may influence the firm. However, the term is embryonic and academics and practitioners alike lack understanding on how CE contributes to value co-creation. This article marks the first attempt to conceptualize the role of customer engagement behavior (CEB) in value co-creation within a multistakeholder service system. We combine the theoretical perspectives of CE and value co-creation research to the analysis of a rich case study of a public transport service system involving consumers, communities, businesses, and governmental organizations. Our findings describe drivers for CEB, identify four types of CEB, and explore the value outcomes experienced by various stakeholders. This article proposes that CEB affects value co-creation by virtue of customers’ diverse resource contributions toward the focal firm and/other stakeholders that modify and/or augment the offering, and/or affect other stakeholders’ perceptions, preferences, expectations, or actions toward the firm or its offering. Through inducing broader resource integration, CEB makes value co-creation a system-level process. We offer nine research propositions explicating the connections CEB has to value co-creation by focal customers, the focal firm, and other stakeholders. Our research suggests that firms should focus greater attention on the resources that customers can contribute, explore the potential to engage diverse stakeholders around a common cause, and employ organically emerging systems that provide opportunities for more extensive value co-creation.
Complexity surrounding the holistic nature of customer experience has made measuring customer perceptions of interactive service experiences challenging. At the same time, advances in technology and changes in methods for collecting explicit customer feedback are generating increasing volumes of unstructured textual data, making it difficult for managers to analyze and interpret this information. Consequently, text mining, a method enabling automatic extraction of information from textual data, is gaining in popularity. However, this method has performed below expectations in terms of depth of analysis of customer experience feedback and accuracy. In this study, we advance linguistics-based text mining modeling to inform the process of developing an improved framework. The proposed framework incorporates important elements of customer experience, service methodologies, and theories such as cocreation processes, interactions, and context. This more holistic approach for analyzing feedback facilitates a deeper analysis of customer feedback experiences, by encompassing three value creation elements: activities, resources, and context (ARC). Empirical results show that the ARC framework facilitates the development of a text mining model for analysis of customer textual feedback that enables companies to assess the impact of interactive service processes on customer experiences. The proposed text mining model shows high accuracy levels and provides flexibility through training. As such, it can evolve to account for changing contexts over time and be deployed across different (service) business domains; we term it an "open learning" model. The ability to timely assess customer experience feedback represents a prerequisite for successful cocreation processes in a service environment.
When customers deliberately change the channel through which they do business with a firm, is that an indication of behavior change, and thus, future revenue? This research investigates the causal effects of customer channel migration to direct, company-managed or indirect, independent agent-managed online and offline channels using data from a leading international airline. In a quasi-experimental design via Mahalanobis-metric matching and conditional difference-in-differences estimation, the authors show that channel migration affects customer relationship breadth and depth: (1) Customers migrating from indirect to direct channels exhibit lower levels of relationship depth (revenue), (2) customers migrating from offline to online channels exhibit higher levels of relationship breadth (cross-buying), and (3) customers migrating from indirect offline to direct online channels exhibit higher levels of relationship depth (sales) and breadth (cross-buying). These findings expand our understanding of customer channel migration in service industries and suggest reconsidering and evaluating service firms’ strategies for direct channels as a lever for short-term revenue increase. Improving service firm’s direct channel relationship depth and breadth, pricing structure in direct channels must be adapted to compensate for lower sales figures per customer. In addition, direct channels services should be optimized to achieve higher conversion rates.
Prior research acknowledges employees' crucial role in building strong service brands, yet empirical research on how to turn employees into brand champions remains scarce and has been largely approached from an internal branding perspective. Drawing on social identity and social exchange theories, this study takes a broader organizational perspective to link internal branding outcomes (employee-brand fit, brand knowledge, and belief in the brand) and employees' perceptions of organizational support to a range of employee brand-building behaviors, with organizational identification as the key mediating mechanism. Both cross-sectional and longitudinal analyses of employee data from a major retail bank reveal organizational identification as a strong motivational force for employees to become brand champions, largely mediating the effects of internal branding outcomes. When organizational identification is low, perceived organizational support (as a quality indicator of employees' exchange-based relationship with the organization) constitutes an alternative, external motivator of on-the-job brand building behaviors; when organizational identification is high, perceived organizational support boosts employees' voluntary participation in brand development and positive word-of-mouth. These findings highlight the managerial relevance of the employee-organization relationship for turning employees into brand champions and show how organizational identification can be stimulated by means of internal branding.
Service failure is well documented in service marketing literature, which mainly focuses on service interactions between employees and individual customers. However, prior research has not examined customers’ emotional and behavioral responses during group service failure—that is, a service involving a group of customers who do not meet the expectations of all or the majority of the customers. Compared with service failure involving individual customers (individual service failure), customers in group service failure are likely to show different emotional and behavioral characteristics. The authors conduct two experiments and find that customers have higher levels of anger and complaint intentions in group service failure than in individual service failure. In addition, the displays of anger by surrounding customers are positively related to individual customers’ anger. Through a second experiment, this article further investigates the role of group size and group familiarity on group emotional contagion during group service failure. The results show that both group size and group familiarity moderate the relationship between the displays of anger by surrounding customers and an individual customer’s anger—that is, the effect of group emotional contagion is stronger in a large/familiar group than in a small/unfamiliar group. The results provide several theoretical and managerial implications for research in group service failure.
How can firms retain customers during recessions? To answer this question, we investigate the moderating role of consumer confidence (CC) on the effects of three types of crucial customer loyalty strategies. These strategies are value equity (VE), brand equity (BE), and relationship equity (RE), collectively called customer equity drivers (CEDs). We build on economics and marketing theories to develop our hypotheses on the concerned moderating role. A meta-analysis is used to synthesize the multilevel results of 13 service industries and to test the hypotheses. In addition, we use several robustness checks to validate the findings of the meta-analysis. The results consistently show that CC partly influences the effects of CEDs on customer loyalty and this influence varies across industries. These findings suggest that managers in service industries should consider CC as an important criterion for effectively adjusting customer loyalty strategies to their specific situation. Specifically, during recessions, when CC is relatively low, VE is effective for retaining customers, but this is more apparent for noncontractual settings than for contractual settings. Also, BE is more effective but only for noncontractual firms.
Firms striving for long-term profitability need to build stronger customer-firm relationships by getting their customers more engaged with the firm. One path to this end is introducing practices to manage different forms of customer engagement behaviors (CEBs). To develop more effective and efficient CEB management practices, this research proposes and empirically tests a theoretical model on managerial and psychological processes to encourage CEBs that are embedded in a broader network of customers and stakeholders. Based on qualitative and quantitative studies in nursing homes, we demonstrate that organizational support and overall service quality toward significant others influence some forms of CEBs—more particularly feedback and positive word of mouth (WOM) behaviors—through customer affect toward the organization. It is interesting to note that customer affect toward the organization encourages WOM behaviors, while it discourages feedback behaviors. Conversely, managerial processes that increase customer role readiness—such as organizational socialization and support from other customers—were found to have a positive impact on all forms of CEBs. This research helps managers of nursing homes and other services with a broad network of customers and stakeholders to improve existing CEB management practices and develop new CEB management practices that are beneficial for the firm and its stakeholders.
While retention of highly qualified employees is vital for professional services firms, prior research has largely neglected the role of customers as a driver of employee satisfaction and retention. Drawing on an experimental study and a dyadic field study, this article shows that client satisfaction is an important determinant of employee satisfaction, which in turn increases employee retention. Thus, for professional services firms, the common logic in relationship marketing that employee satisfaction affects client satisfaction can also be reversed. First, in line with balance theory, an attitudinal transfer occurs from the client to the employee which is stronger when both share the same opinion about their collaboration. Second, in line with Herzberg’s motivational theory, client satisfaction indirectly affects employee satisfaction by affecting the perceived appreciation the employee receives from the customer. These findings have three major managerial implications: First, investments into client satisfaction might pay off double by enhancing revenues and profit on one hand, and enhancing employee satisfaction and retention, on the other hand. Second, positive client feedback has positive effects on employee satisfaction and recognition. Third, these results suggest that marketing and human resource issues are intertwined in professional services firms. Thus, service firms should encourage ample communication and collaboration between these functions.
Theory and research on service climate are synthesized, and an extensive agenda for future research is proposed. The service climate construct is first differentiated from conceptually related but distinct constructs, such as job satisfaction, service culture, and service orientation. Then a framework is presented based on prior research that displays service climate’s antecedents and consequences and the linkages among them. The synthesis draws heavily upon organizational behavior/human resource management (OB/HRM), but service climate has also received significant interdisciplinary attention. In particular, past work has integrated OB/HRM’s focus on the internal organization and marketing’s focus on the external world of the customer. The future research agenda includes further specification of the framework’s variables and linkages (e.g., the relative roles of individual and contextual attributes in creating service climate) as well as recommended research methods (e.g., profile analysis to assess interactions among multiple climates in a setting). Finally, the utility of the service climate framework for analyzing four key issues in service management is demonstrated: service infusion in manufacturing; the cocreation of value; sustainable competitive advantage; and the fostering of additional interdisciplinary research.
Evidence has shown that satisfied customers do not necessarily buy more of a company’s products and services, thus spurring researchers to look for a missing link between customer satisfaction and purchase behavior. Word of mouth (WOM) has been advocated as the elusive missing link and as a key indicator of customer-firm relationship strength. Yet, WOM is only one type of customer voluntary performance (CVP). In this study, a second type of CVP, namely customer participation (i.e., customers’ willingness to provide the firm with constructive feedback and suggestions), is argued to be crucial to ensure that a satisfied customer repurchases. The authors develop and test a model that predicts that satisfied customers repurchase when they become productive resources through two spontaneous and cooperative customer behaviors: WOM and participation. The empirical findings support the predictions, thus complementing and extending previous research. This research suggests that while WOM has been heralded as an important factor in firm growth, another factor that is at least equally if not more important to future sales is customer participation.
Fit between an organization's brand and its employees, sometimes referred to as employee brand identification, has been highlighted as an important element in delivering service quality. This article examines the people management practices directed both at potential and current employees which enhance this "person-brand fit" and proposes that effective management of this can help reduce the persistent problem of social skills gaps in service organizations. A study of managers and customer-facing employees in two hotel case studies—one reporting significant social skills gaps and the other reporting few gaps—showed that the hotel reporting fewer gaps had achieved greater employee identification with the brand. This hotel conducted recruitment and selection around person-brand fit, while the other hotel did not. The hotel reporting fewer social skills gaps also allowed greater employee agency in brand socialization, training, and in the enactment of the brand on the job. The article discusses the relevance of these findings for theory on how human resource management practices may be linked to service brands in order to reduce social skills gaps.
With an empirical study in two nonprofit industries (a money-collecting and blood-collecting organization), the authors investigate how organizational identification and identity salience together function in relation to satisfaction, loyalty, and behavior. They develop and test a model that best represents relationships featuring donor-nonprofit identification and donor identity salience in existing satisfaction-loyalty studies. Overall, the study empirically confirms that donor-nonprofit identification and donor identity salience are distinct constructs and that both have direct positive effects on loyalty, but not that much on donations. Within the money donation context, both identification constructs have stronger total effects on donor loyalty than donor satisfaction, whereas in the blood donation context, donor satisfaction has a stronger effect on loyalty. In testing the causal direction between donor-nonprofit identification and donor satisfaction, the authors also find that the path should be conceptualized from satisfaction to identification. The study contributes to the theory of organizational identification and identity salience by highlighting the advantages of taking a combined theoretical approach. Finally, the study suggests several means to implement donor identification management, including group activities, development of online communities, donor events, and more long-term-oriented tactics, all of which treat the donor as a cocreator of value.
In many business markets, manufacturers seek service-led growth to secure their existing positions and continue to grow in increasingly competitive environments. Using longitudinal data from 513 German mechanical engineering companies and latent growth curve modeling, this study offers a fine-grained view of the financial performance implications of industrial service strategies. By disentangling the revenue and profit implications of industrial service strategies, findings reveal that such strategies increase both the level and the growth of manufacturing firms’ revenue streams. In contrast, they reduce the level but improve the growth of manufacturers’ profits. Results further suggest that services supporting the clients’ actions (SSC) and services supporting the supplier’s product (SSP) affect performance outcomes in different ways. SSCs directly affect revenue and profit streams. In turn, SSPs display only indirect effects on financial performance mediated through SSCs. A moderator analysis identifies two organizational contingencies that facilitate service business success: Only companies with decentralized decision-making processes and a high share of loyal customers can expect favorable financial results from industrial service strategies. In summary, this research provides significant insights and managerial guidance for turning service strategies into financial successes.
Success rates of behavior change counseling programs (e.g., weight loss, smoking cessation, and debt management), where consumers seek to overcome their destructive habits and enhance well-being, are very low. Characterized by extended and complex service encounters, the providers of these programs face the challenge of gaining consumers’ compliance to adhere to the programs’ requirements and turning these consumers into effective co-producers of the service outcomes. This study investigates the process of customer organizational socialization in these programs, how it may promote co-production behaviors, and thus enhance consumers’ well-being as well as satisfaction with the organization. The context of debt management programs is used to test the model. Data were obtained from 364 clients of a major credit counseling organization in the United States. The results reveal the differential effects of three aspects of socialization (role clarity, task mastery, and goal congruence) on three different types of consumer co-production behaviors (compliance, individual initiative, and civic virtue). Overall, compliance has the greatest contribution to well-being, while both compliance and individual initiative enhance satisfaction with the organization. Furthermore, consumers with a higher or lower ongoing dependence on the organization have different routes to well-being, with the high-dependence group relying on individual initiative, and the low-dependence group favoring compliance. This study contributes to the literature of co-production, organizational socialization, and consumers’ well-being by showing how these three streams are connected. Managerial and policy implications focus on the need for these organizations to include efforts to ensure that consumers are effectively socialized into the program.
Although frontline customer service employees play a vital role in many firms, their part in service delivery is often underappreciated. The interaction between frontline employees and customers creates an impression of what is to come in the service experience. A key question is whether this interaction spills over to other unrelated aspects of the business. We conduct a quasi-experiment across two medical clinics, one of which had its frontline employees trained to improve their interpersonal skills. We find that not only does the training create positive perceptions of the service provided by frontline employees, but also increases perceptions of service quality attributes not related to these employees. That is, customer perceptions of the interpersonal skills of frontline employees "spillover" to other service quality attributes. However, this spillover effect does not impact all service attributes uniformly; rather, it is restricted to only credence attributes which customers find difficult to evaluate. We term this a selective halo effect. This finding demonstrates that customer perceptions of the interpersonal skills of frontline employees extend well beyond the range in which they perform their expected duties. Our article builds on attribute evaluability theory and information economic theory by demonstrating the existence of a selective halo effect. Further, we develop a classification system that managers can use to predict which attributes are most likely to be influenced by a selective halo effect. We encourage managers to think of frontline employees as "barometers of the business," and to invest in continued training for these key personnel.
In this article, we introduce the concept of the service delivery network (SDN) defined as two or more organizations that, in the eyes of the customer, are responsible for the provision of a connected overall service experience. This responds to calls for frameworks recognizing that dyadic service encounters are embedded in the series of experiences customers have with complementary providers as part of the journey to achieve their desired goals. Adopting an SDN perspective presents a dramatically different set of challenges for managers and provides research opportunities challenging the current view of established service concepts. Managers must recognize that to better serve the customer they need to understand the role that they play in the customer-defined service journey and be prepared to coordinate their activities with complementary providers. Participating in helping build and manage the SDN for the customer, or understanding how they fit into customer’s self-designed SDN, becomes a central challenge, often requiring firms to develop a new set of capabilities. The SDN also challenges the way we view many of the core concepts in service research, which are anchored in the dyadic view. This provides considerable opportunity for future inquiry. We present a series of research questions, inspired by the SDN, organized into categories including building cooperative and collaborative networks, customer cocreation, systems thinking, customer relationship management, managing service failure and recovery, building capabilities, and customer-to-customer interactions.
Research on value creation traditionally has focused on value created by the company, though customers increasingly serve as active partners, able to create value with firms in a collaborative manner. Despite interest by both scholars and managers, existing research has not yet clarified the interdependencies of service offerings and customer role patterns. This article explores value creation rooted in three generic offerings (configuration, solution, and network) and identifies differences in their prerequisites, customer activities, challenges, abilities, ability enhancers, and perceived benefits that arise in collaborative value creation (CVC). Data from 105 collaborations, collected through in-depth interviews, support the qualitative and quantitative analyses that reveal distinct patterns in customers’ value creation for each service offering. A categorical principal components analysis, combined with cluster analysis, identifies five customer roles: bargain-hunting independent, comprehensive help seeker, engaged problem solver, technology-savvy networker, and self-reliant customizer. Our theoretical contribution includes the identification of customer roles across generic offerings and empirical evidence that customers perform multiple roles when engaging in CVC processes. Our findings provide managers engaged in CVC with recommendations on criteria for segmenting customer groups, on the role of the service provider in various value creation processes, and on tailored communication strategies to attract customers.
In this research, we develop a comprehensive theoretical model of the consumer response to penalties and the penalty resolution process. Two mechanisms of consumers’ response to penalty resolution are proposed: the perceptions of penalty fairness and feelings of gratitude. We delineate and test differences between gratitude and perceived fairness and identify factors differentially affecting them. Factors influencing feeling of entitlement, such as nature of the error, and consumer history and status with the provider, contribute to fairness perceptions. On the other hand, firm-customer interactions influence both gratitude and fairness assessments. Specifically, the penalty outcome provides benefits, hence induces gratitude, and is also perceived as the right thing to do, hence induces perceptions of fairness. However, factors that contribute to benefits received, but do not align with equity, such as type and uniqueness of compensation, influence gratitude only. The findings also confirm that, compared with fairness, gratitude more strongly influences active profirm behaviors, such as advocacy. This research offers important managerial implications. The findings suggest that service providers should consider customer history and relationship status in the penalty resolution process. Meeting customer expectations will enhance fairness perceptions and minimize the negative effect on loyalty. Further, flexible procedures for handling penalties, preferred type of compensation, and selectivity in treatment should stimulate feelings of gratitude and motivate consumers to actively promote the company via positive word of mouth.