Determinants and Outcomes of B2B Service Innovations: How are they Different from those of B2C Service Innovations?
By Thomas Dotzel, Venkatesh Shankar, Leonard L. Berry
2009
Abstract
Both developed and developing economies worldwide are becoming increasingly services-driven. By some estimates, the value of business-to-business (B2B) commerce dwarfs that of business-to-consumer (B2C). Yet not much is known about B2B services. In particular, firms competing in business markets are constantly seeking to introduce service innovations to satisfy customers and improve firm value. The Institute for the Study of Business Markets (ISBM) points out that “as firms continue to seriously “mix” service offerings […] with hard product offerings, the issue of computing the value, demonstrating value, and documenting value is becoming ever more important.” However, there is a paucity of research on B2B service innovations (B2B-SIs) and their value to firms. We empirically address this issue by studying both the determinants and outcomes of B2B-SIs, while controlling for both firm- and market-specific factors. Furthermore, we investigate how these effects are different from those of business-to-consumer service innovations (B2C-SIs). We develop a modeling system that relates service innovation, customer satisfaction and firm value to one another. We estimate our model on a unique panel data of service innovations assembled from multiple data sources across multiple industries. Preliminary results indicate that while B2B-SIs have positive effects on both customer satisfaction and firm value, there is insufficient evidence for the effects of B2C-SIs on customer satisfaction or firm value. Our findings offer executives important insights about the value and the determinants of different types of service innovations for their companies.