Customer Involvement In Service Innovation : Study of the bank industry

Abstract: Thesis; Master Programme, Marketing Linnæus University, School of Business and Economics in Växjö Authors: Jimmie Borgqvist & Daniel Lindberg Tutor: Sarah Philipson Title: Customer involvement in Service Innovation – a study of the banking industry. Background/Problem: Services are commodities in most service industries and the companies are not putting enough into innovation of services to differentiate themselves from their competitors. Since the services are commodities it does not make the customers committed to a certain company nor does it make the customer chose the best service, since they are so much alike. To be able to adapt the services to the customers the companies need to know what the customers want. This research is proposing that the way to find out what the customers want is through customer involvement in the service innovation process. Purpose: The purpose of this thesis is to identify opportunities for service companies to involve customers in the service innovation process. Theory: The theoretical framework is built up out of the concept of customer involvement in service innovation, which is a research area that has been put aside for customer involvement for product innovation. Despite this the area has some interesting articles and this research is built up around Alam’s (2002) model of customer involvement. Research question: What preferences do customers have when interacting in service development and what kind of involvement is best suited for their needs? Method: The empirical study of the research was performed through a pre-study with semistructured telephone interviews and the actual study consisted of internet surveys. The telephone interviews were conducted with three experts in the area of customer involvement in service innovation and the banking industry. The surveys had 300 responses within the sample of the study. The sample consisted of Swedish bank customers in the ages of 18 to 25. Conclusion: Customers wants communication methods which are not involving face-to-face interaction. Instead they prefer mobile applications, social networks and the internet bank. Customers prefer to innovate together with other customers and employees of the bank.