Service innovation management for customer satisfaction and behavioural intentions. The case of boutique hotel sector in an emerging country

<p>Service innovation is critical for the improvement and development of many industries, allowing practitioners to be responsive to the changes in the environment. Technological products and applications have brought to both service providers and customers efficiency and convenience in communication as mutual benefits. The products and applications facilitate and streamline information exchange between the parties for better service performance, which results in higher customer satisfaction. Moreover, scholars of Service-Dominant Logic and Design Thinking emphasise the role of customers in creating service innovation as well as the importance of intangible values. The school of thought believes that innovation in service delivery techniques can satisfy customer expectations for new experiences as well as encourage customer participation in innovation. The hospitality industry, which includes services such as accommodation, food and beverage, and tourism, is also seeking suitable innovation that focuses on emphasising customer experience. Many scholars and practitioners have studied the application of technological innovation in enhancing operational performance and customer acceptance. However, customer satisfaction of innovation is still left unattended despite of its importance which motivates this study to further investigate the influence of innovative service clues and the innovativeness of service operations on satisfying customer expectation and encouraging favourable behavioural intentions.</p> <p>This study develops a conceptual framework that defines innovative service clues and innovativeness based on Expectation-Disconfirmation Theory (Oliver 1977), Diffusion of Innovation (Rogers 2010) and Theory of Planned Behaviour (Ajzen 1991). This study practises several types of mixed methods to provide a multi-perspective on the issue. In the first phase, approximately one thousand reviews of international customers on TripAdvisor were analysed numerically and textually with content analysis and a deductive-thematic analysis approach. In the second phase, in-depth interviews were conducted with hoteliers and their customers. The data was also analysed with a deductive-thematic analysis approach. In the third phase, a quantitative study with the SEM-PLS method was employed to determine a service innovation theoretical model that illustrated the interrelationship among the key constructs of service innovation, and to triangulate the findings with the two previous phases of study for a comprehensive explanation.</p> <p>For practical implications, findings from the three phases of the study can help practitioners consider operational strategies aligned with marketing strategies, in order to maximise customer satisfaction and favourable behavioural intentions in a competitive market, especially to overcome the challenges caused by the recent COVID-19 pandemic. Service innovation proposed in this study can help to attract and retain a customer base with techniques that focus on cost-cutting for businesses. Specifically, findings suggest that Innovative Humanic Clues and Innovative Mechanic Clues are the most important components influencing customer perception and behavioural intentions, while Novelty, Meaningfulness, and Affordability are the determinants that customers consider for experiencing the offered service innovation. For theoretical implications, the study develops a conceptual framework that illustrates the process of how service innovation influences customer satisfaction for behavioural intentions, which can be used for types of innovative hospitality operations. The conceptual framework with a set of propositions aims to explain how customers would expect, perceive, and evaluate the service innovations that result in behavioural intentions. The proposed conceptual framework was examined and refined with three different research phases, both with qualitative methods and quantitative methods to ensure the validity; also, to explore possible attributes of service innovation in-depth.</p>