Variety is the Spice of Innovation: Mediating Factors in the Service Idea Generation Process

To create a breakthrough service innovation, firms need to go beyond current customers' needs and tap into the needs of the future market. As marketing theory favours customer‐centric approaches, customer‐led ideation and co‐creation of innovation seem natural candidates for extracting the ‘sticky’ information nested in some of the most innovative customers' minds. Grounded in the service innovation literature, this paper extracts innovative service ideas from ordinary users (n=388) in three different service domains and seeks to identify the salient characteristics of the most innovative customers. Past research shows that innovative users are more likely to be service defectors, frequently switching from firm to firm, and motivated by their predisposition to seek variety. Using a structural modelling strategy, variety seeking is tested as a mediating factor between the subjective knowledge level and the presence of high level unmet needs leading to the generation of innovative service ideas. The results show that variety seeking fully mediates the relationship between subjective knowledge and unmet needs. Several interpretations of the role of variety seeking on customers' behaviour are explored within the context of capturing innovative service ideas.

[1]  P. Bentler,et al.  Comparative fit indexes in structural models. , 1990, Psychological bulletin.

[2]  Gary W. Loveman,et al.  Putting the Service-Profit Chain to Work , 1994 .

[3]  Reinhard Prügl,et al.  Extending Lead User Theory: Antecedents and Consequences of Consumers' Lead Userness , 2007 .

[4]  Susan M. Broniarczyk,et al.  Factors influencing the likelihood of customer defection: The role of consumer knowledge , 2003 .

[5]  Rebecca K. Ratner,et al.  Choosing less-preferred experiences for the sake of variety. , 1999 .

[6]  Moshe Givon.  Variety Seeking Through Brand Switching , 1984 .

[7]  David L. Mothersbaugh,et al.  Consumer Knowledge Assessment , 1994 .

[8]  Ramesh K. Agarwal,et al.  A MODEL OF CREATIVITY AND INNOVATION IN ORGANIZATIONS , 2011 .

[9]  A. Gustafsson,et al.  Harnessing the Creative Potential among Users , 2004 .

[10]  James G. Maxham,et al.  A Longitudinal Study of Complaining Customers' Evaluations of Multiple Service Failures and Recovery Efforts , 2002 .

[11]  Bruce G. S. Hardie,et al.  Probability Models for Customer-Base Analysis , 2009 .

[12]  P. S. Raju.  Optimum Stimulation Level: Its Relationship to Personality, Demographics, and Exploratory Behavior , 1980 .

[13]  John Cullen,et al.  Democratizing Innovation , 2020, Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship.

[14]  THE EFFECTS OF PRICE AND SCARCITY ON THE VALUATION OF FASHIONS BY FASHION OPINION LEADERS AND NONOPINION LEADERS. , 1973 .

[15]  Susan M. Keaveney,et al.  Customer switching behavior in online services: An exploratory study of the role of selected attitudinal, behavioral, and demographic factors , 2001 .

[16]  L. Berry,et al.  Creating new markets through service innovation , 2006 .

[17]  L. Flynn,et al.  A Short, Reliable Measure of Subjective Knowledge , 1999 .

[18]  B. Hennessey.  The Social Psychology of Creativity , 2003, Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship.

[19]  Klaus Krippendorff,et al.  Content Analysis: An Introduction to Its Methodology , 1980 .

[20]  John R. Hauser,et al.  “Listening In” to Find and Explore New Combinations of Customer Needs , 2004 .

[21]  F. F. Reichheld,et al.  Zero defections: quality comes to services. , 1990, Harvard business review.

[22]  D. A. Kenny,et al.  The moderator-mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. , 1986, Journal of personality and social psychology.

[23]  Christian Lüthje.  Characteristics of innovating users in a consumer goods field , 2004 .

[24]  E. Hippel,et al.  Lead users: a source of novel product concepts , 1986 .

[25]  R. Westbrook.  Sources of consumer satisfaction with retail outlets. , 1981 .

[26]  Clay M. Voorhees,et al.  A Service Perspective on the Drivers of Complaint Intentions , 2005 .

[27]  M. Browne,et al.  Alternative Ways of Assessing Model Fit , 1992 .

[28]  Christine Moorman,et al.  Subjective Knowledge, Search Locations, and Consumer Choice , 2004 .

[29]  Peter R. Magnusson,et al.  Tuning Users' Innovativeness During Ideation , 2010 .

[30]  B. Tether,et al.  The sources and aims of innovation in services: Variety between and within sectors , 2003 .

[31]  Robert C. Blattberg,et al.  Recapturing Lost Customers , 2004 .

[32]  Peter R. Magnusson,et al.  Exploring the Contributions of Involving Ordinary Users in Ideation of Technology‐Based Services* , 2009 .

[33]  Marcel Zeelenberg,et al.  Blessed are those who expect nothing: Lowering expectations as a way of avoiding disappointment , 2003 .

[34]  B. Kahn.  Consumer variety-seeking among goods and services: An integrative review , 1995 .

[35]  D. G. Morrison,et al.  Is the Customer Still Active , 1985 .

[36]  D. Stewart,et al.  Customer Experience Management in Retailing: Understanding the Buying Process , 2009 .

[37]  R. Rust,et al.  Should we delight the customer? , 2000 .

[38]  Susan M. Keaveney,et al.  Customer Switching Behavior in Service Industries: An Exploratory Study , 1995 .

[39]  Ruth N. Bolton,et al.  A Model of Customer Satisfaction with Service Encounters Involving Failure and Recovery , 1999 .

[40]  Peter R. Magnusson,et al.  Managing User Involvement in Service Innovation , 2003 .

[41]  Clayton M. Christensen,et al.  Disruptive Technologies: Catching the Wave , 1995 .

[42]  Howard L. Fromkin,et al.  The Search for Uniqueness and Valuation of Scarcity , 1980 .

[43]  Anders Gustafsson,et al.  Understanding Frequent Switching Patterns , 2007 .

[44]  C. W. Park,et al.  The Ties That Bind: Measuring the Strength of Consumers’ Emotional Attachments to Brands , 2005 .

[45]  Sonali K. Shah,et al.  How Communities Support Innovative Activities: An Exploration of Assistance and Sharing Among End-Users , 2003 .

[46]  G. Holmbeck.  Toward terminological, conceptual, and statistical clarity in the study of mediators and moderators: examples from the child-clinical and pediatric psychology literatures. , 1997, Journal of consulting and clinical psychology.

[47]  W. Reinartz,et al.  On the Profitability of Long-Life Customers in a Noncontractual Setting: An Empirical Investigation and Implications for Marketing , 2000 .

[48]  John Roberts,et al.  The nature of lead users and measurement of leading edge status , 2004 .

[49]  Vikas Mittal,et al.  The Right Way to Manage Unprofitable Customers , 2008 .

[50]  D. Mackinnon.  Introduction to Statistical Mediation Analysis , 2008 .

[51]  B. Kahn,et al.  The Impact of Context on Variety Seeking in Product Choices , 1995 .

[52]  Glen L. Urban,et al.  Lead User Analyses for the Development of New Industrial Products , 1988 .

[53]  F. Wangenheim.  Postswitching Negative Word of Mouth , 2005 .

[54]  Neil A. Morgan,et al.  The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Business Performance , 2006 .

[55]  G. Tellis,et al.  Research on Innovation: A Review and Agenda for Marketing Science , 2006 .

[56]  Leslie H. Vincent,et al.  Objective and Subjective Knowledge Relationships: A Quantitative Analysis of Consumer Research Findings , 2009 .

[57]  Jochen Wirtz,et al.  The effects of consumer expertise on evoked set size and service loyalty , 2003 .

[58]  Werner Reinartz,et al.  Customer Relationship Management: A Databased Approach , 2005 .

[59]  B. Byrne.  Structural Equation Modeling with LISREL, PRELIS, and SIMPLIS: Basic Concepts, Applications, and Programming , 1998 .

[60]  S. Peters.  Listening In , 2010, PACLIC.

[61]  Christian Lüthje.  Characteristics of Innovating Users in a Consumer Goods Field: An Empirical Study of Sport-Related Product Consumers , 2002 .

[62]  M. Brucks.  The Effects of Product Class Knowledge on Information Search Behavior , 1985 .

[63]  H. Bansal,et al.  “Migrating” to new service providers: Toward a unifying framework of consumers’ switching behaviors , 2005 .

[64]  G. Holmbeck.  Toward terminological, conceptual, and statistical clarity in the study of mediators and moderators : examples from the child-clinical and pediatric psychology literatures , 1997 .

[65]  David I. Gilliland,et al.  The infomercial shopper , 1996 .

[66]  Gregory R. Hancock,et al.  Structural equation modeling : a second course , 2006 .

[67]  A. Parasuraman,et al.  Developing successful technology‐based services: the issue of identifying and involving innovative users , 2006 .

[68]  Dawn Iacobucci,et al.  Distinguishing Service Quality and Customer Satisfaction: The Voice of the Consumer , 1995 .

[69]  Paul G. Patterson,et al.  Customer rage episodes: Emotions, expressions and behaviors , 2009 .

[70]  Michael Lewis.  The Influence of Loyalty Programs and Short-Term Promotions on Customer Retention , 2004 .