“Service Innovation, Customer Satisfaction, and Firm Value: Asymmetries between Internet-Enabled and Non-Internet-Enabled Service Innovations”
By Thomas Dotzel, Venkatesh Shankar, Leonard L. Berry
In Press
Abstract
As economies in developed countries are increasingly driven by services, the introduction of new services to satisfy customers and improve firm value is becoming a critical issue for managers in both services- and goods-dominant firms. Indeed, the member companies of the Marketing Science Institute have identified service innovation as one of the priority research topics for scholarly research. However, prior research on innovation has primarily focused on goods, leaving important research questions relating to service innovation open. We empirically investigate the determinants of service innovations and their interrelationship with customer satisfaction and firm value while controlling for both firm- and market-specific factors. Furthermore, we examine how these effects vary between Internet-Enabled Service Innovations (IESI) and Non-Internet Enabled Service Innovations (NIESI). We develop a system of equations that link service innovation, customer satisfaction and firm value. We estimate our model on a unique panel data set that we assembled from multiple data sources across multiple industries. Preliminary findings indicate that while neither IESI nor NIESI have a direct effect on customer satisfaction, IESI and customer satisfaction have a positive effect on firm value. Our findings offer executives important insights about the value of different types of service innovations for their companies.
Keywords
Innovation, Marketing Strategy, Service Innovation, Services Marketing