The current research examines the way that observing consumers react when companies use humor to address online public complaints on social media. Drawing on, first, a field study using companies’ humorous responses on social media and, second, on two main scenario-based experiments, we use benign violation theory to capture simultaneously the unfavorable effect (i.e., inferred negative motives) and the favorable effect (i.e., humor appreciation) of employing humor in a public complaining context. The results reveal that online observers respond more favorably (in terms of likes, retweets, and purchase intentions) when firms use affiliative humor (e.g., laughing with the complainer) rather than aggressive humor (e.g., laughing at the complainer). Also, affiliative humor and an accommodative recovery (e.g., apologies and compensation) provide equal results in terms of observers’ purchase intentions. Because observers infer more negative motives of companies, affiliative humor compensates over an accommodative recovery by being funnier. Finally, our last study presents a reversal effect depending on brand personality; while sincere brands should always favor affiliative humor, aggressive humor elicits higher purchase intentions when performed by exciting brands. This research gives managerial insights about observers’ reactions to humorous responses to online complaints and the importance for humor to fit with brand personality.

The role of virtual salesperson (VS) and the importance of customer reviews in facilitating online purchase decisions and sales have recently received much attention from technology companies, marketing practice professionals, and academics. However, customers’ willingness to follow the purchase advice of the VS when there is a conflict between these recommendations and those of other online customers is less understood. This research theorizes and investigates the extent to which customers’ relationship satisfaction with, and trust in, the VS helps explain customer willingness to follow VS advice in the context of recommendation conflict. Using four studies, our research explores how and when the VS’s avatar design mitigates the negative influence of conflict. An important theoretical and managerial implication of this research is that VS avatar designs that are high in automated social presence (ASP) help reduce the negative impact of conflict. However, we find that ASP mitigates the negative effects of conflict only for avatars that score low (vs. high) on cuteness.

Service research suggests homes are becoming increasingly connected as consumers automate and personalize new forms of service provision. Yet, large-scale empirical evidence on how and why consumers automate smart domestic products (SDPs) is lacking. To address this knowledge gap, we analyze 13,905 consumer-crafted, automated combinations of SDPs, totaling 1,144,094 installations, across 253 separate service providers on the web service IFTTT.com. An exploratory network analysis examines the topology of the network and an interpretive coding exercise reveals how consumers craft different styles of human-computer interaction to cocreate value. The results reveal that the SDP network is disassortative, is imbalanced, has a long-tailed degree distribution, and that popular services have high centrality across all product category combinations. We show that popular combinations of SDPs are primarily motivated by utilitarian value-seeking enacted through a preference for automated tasks outside of conscious attention, though more individualistic combinations are slightly more likely to be hedonistically inclined. We conclude by showing how these consumer-crafted forms of service provision within domestic environments reveal design redundancy and opportunities for service innovation.

Self-tracking technologies (STTs) in the form of smart devices and mobile applications enable consumers to monitor, analyze, and interpret personal performance data on health and physical or financial well-being. As a result of self-tracking, consumers are not only expected to check their personal performance more actively but also to implement service professionals’ advice to improve their well-being more accurately. Despite the growing popularity of STTs, empirical evidence on the extent to which STT use enhances advice compliance remains scant. A field experiment with 538 participants in a health-care setting suggests that STT use does not increase advice compliance per se. Rather, the effectiveness of STTs depends on consumers’ self-efficacy. For consumers low in self-efficacy, STT use can even undermine advice compliance. A lab experiment with 831 participants replicates and generalizes the findings to a nonmedical professional service (i.e., fitness training). As assessments of self-efficacy might be difficult in practice, service providers in health care can use consumers’ body mass index as an easy-to-measure proxy to predict STT effectiveness. Finally, the lab experiment also identifies perceived empowerment and personalization as psychological mechanisms mediating the influence of STT use on advice compliance.

Blurring roles in the front line are changing how many organizations interact with their customers. Whereas frontline employees were tasked with functional roles of service or selling, an increased competitive environment and growing customer expectations have caused a shift requiring many employees to be effective at both selling and service. The growth of sales/service ambidexterity in both practice and research has prompted more meaningful investigation of the topic. The purpose of this article is to provide a brief background of ambidexterity and positioning of the topic. We provide a discussion of the articles compiled in this special issue and the synergy across papers. We conclude with the implications of this research and avenues for future research.

Financial service organizations are increasingly interested in ways to improve the service experience quality for customers, while customers progressively perceive the commoditization of banking services. This is no easy task, as factors outside the control of the service firm can influence customers’ perceptions of their experience. This study builds on the customer equity framework to understand the linkages between what the firm does (customer equity drivers: value equity, brand equity, and relationship equity), the social environment (social influence), the customer experience quality, and its ultimate impact on profitability. Using perceptual and transactional data for a sample of customers of financial services, we demonstrate the central role played by factors under the control of the firm (value, brand, and relationship equity) and those outside its control (social influence) in shaping customers’ perceptions of the quality of their experience. We offer new insights into the moderating role of social influence in the linkages between the customer equity drivers and the customer experience quality. The managerial takeaway is that the impact of customer equity drivers on the customer experience quality is contingent on the influence exerted by other people and that enhancing customer experience quality can be a way to increase monetary returns.

Offering discretionary preferential treatments (DPTs) to selected customers is a prevalent practice in hospitality services, yet its nature and effects on nonbeneficiaries are unclear. Drawing from social comparison and appraisal theories and relationship marketing literature, this study examines how nonbeneficiaries appraise and respond to witnessing service employees offering DPTs to others through the separate emotions of malicious and benign envy, that drive their respective contrasting reactions. Nonbeneficiaries’ relationship strength with the firm and their perceived continuity of the preferential treatment (PT) further alter the proposed effects on experiences of envy. A customer survey and three experiments (laboratory and field) consistently affirm the distinctiveness of DPT and support a dual pathway model of the mediating processes of malicious and benign envy on nonbeneficiaries’ behavioral outcomes (e.g., derogating the beneficiary, cooperating with the employee, loyalty to the service company). The findings also uncover a double-edged sword effect of a strong nonbeneficiary-firm relationship: It enhances the effects of DPT on both malicious and benign envy. Interestingly, this enhancing effect of relationship strength for eliciting malicious (benign) envy can be reduced (strengthened) if the PT is perceived to be available on an ongoing basis.

We investigate the association between service intensity and the survival odds of new manufacturing ventures. Although previous research extensively addresses the value of servitization in established firms, this is the first empirical study that asks whether service intensity, defined as the percentage of sales from services, is beneficial or detrimental to new ventures. Drawing on resource-advantage theory, we further ask whether, under increasing service intensity, new ventures with a higher industry-adjusted ratio of tangible to total assets, labor productivity, or current ratio improve survival odds. Based on a comprehensive data on 6,683 new Portuguese manufacturing ventures founded between 2006 and 2010 and followed until 2015 (33,272 venture-year observations), the results show that higher service intensity lowers the odds of survival. For entrepreneurs, we caution against higher service intensity but demonstrate that survival odds can improve under increasing service intensity when the company can achieve a higher industry median–adjusted ratio of tangible to total assets, improved labor productivity, or a stronger current ratio position. The findings are robust after controlling for endogeneity and self-selection into services.

Profitability considerations lead service providers to divest from customer service contracts, either by service contract demotion (cutting back services) or by service contract termination (ending service provision). Such initiatives have been associated with customer revenge. The pressing question for practitioners is which divestment approach has a stronger or weaker effect on customer revenge. Drawing on justice and appraisal theories, the authors suggest that the answer depends on customers’ predivestment satisfaction and on the provision of financial compensation or apology. Three experiments and a critical incident study reveal that for previously satisfied customers, service termination entails a stronger effect on customer revenge, while for previously dissatisfied customers, service demotion entails a stronger effect. The findings further demonstrate that offering financial compensation or an apology can mitigate or exacerbate the effect, highlighting the need to align these divestment handling instruments with the divestment approach chosen and customers’ predivestment satisfaction. The findings also show that the effect can be explained by customer anger. Overall, this article provides guidance on how to divest whom in order to mitigate detrimental effects.

In this digital era, where many product-oriented business-to-business companies are shifting to a product-service systems approach, frontline employees (FLEs) are urged to complement customer-directed behaviors with coworker-directed prosocial behaviors to achieve optimal performance. Surprisingly, little is known about the relationship between FLEs’ coworker-directed and customer-directed behaviors in product-service systems settings. This research addresses this void and serves two purposes. First, drawing on role balance theory, the authors develop and test a model of an FLE’s relative emphasis on serving coworkers (i.e., helping) relative to the emphasis on serving business customers (i.e., proactive selling) as well as the antecedents and consequences of customer-coworker (im)balance. Second, the authors propose that managers can influence antecedents and consequences through an incentive system and access to information sources, respectively. Multivariate time-lagged analyses using survey and secondary performance data reveal that customer-coworker balance is beneficial for an FLE’s performance, especially when leveraging their coworkers as a prime information source. Interestingly, the increasingly damaging impact of an imbalance toward customer-directed behaviors can be countered by using the information technology (IT) system. Also of interest is that managers can correct imbalance—caused by either work group identification or expected customer demand—via individual-based incentives.