ARC: Community: Conferences: Report from Frontiers 2004

areas: services: the future of services research

Leading Scholars Discuss the Future of Services Research: It’s About Time (and Technology)

by Felicia N. Morgan

To paraphrase a famous tag line, “When Roland Rust, Ruth Bolton, and Tor Andreassen spoke, the doctoral students listened.”  Participants in the 11th Annual SERVSIG Services Marketing Consortium hung on every word as these three leading scholars shared their views on current and future hot topics in services research during the final session of what proved to be a lively and progressive day-long program. What came through loud and clear from the three presenters was an emphasis on time and technology as foci of the future.
 
Speaking first, Dr. Roland Rust, the David Bruce Smith Chair in Marketing at the University of Maryland’s Robert E. Smith School of Business, director of the Center for e-Services there, and founder of the Frontiers in Services Conference, focused on current and future methodological developments in services research. Rust identified customer databases and the increasing personalization of customer offerings as key current trends. He said, “We’re seeing more company databases containing information about individual customers across products. To analyze this type of data, econometric modeling is the way to go.” Based on these databases, firms are taking advantage of the increased capability to personalize their offerings. Rust identified Markov Chain Monte Carlo (MCMC) methods as the relevant methodological development. MCMC methods are appropriate for making inferences in complex statistical models and would be useful for predicting customer responsiveness to a given personalized offer. Rust noted the increasing diffusion of these methodologies in the leading marketing journals, including the Journal of Marketing. He stated that not enough doctoral students are being trained in this type of skill, and revealed that even he did not learn these methodologies as part of his formal doctoral training. Speaking directly to the doctoral students he advised, “Most sophisticated reviewers will come to expect this type of work. It’s all about learning about methodologies as they come along and getting good at them.”

Rust believes that future services research will be greatly impacted by the use of GPS (global positioning systems) and RFID (radio frequency identification) devices as well as by the Internet. GPS technology presents the opportunity to employ geographic models to examine consumer choices based on recommendations of the GPS device itself. RFID technology is quite useful in helping retailers track inventory, but what really excites marketers is the ability of RFIDs to track products “all the way home” and beyond to consumption or disposal. Rust stated that we have not fully mined the Internet as a research topic, especially regarding e-service. He said that we are still thinking statically but need to build formal statistical models that can accommodate dynamic interactions between a customer and a website. Rust concluded by urging the doctoral students in attendance to take full advantage of the new trends and “go into the growth part of the field.”

The second speaker, Dr. Ruth Bolton, the W. P. Carey Chair in Marketing at the W. P. Carey School of Business at Arizona State University and current editor of the Journal of Marketing, focused on emerging theoretical developments in services research. Bolton sees “seismic” changes in the marketing landscape ahead and noted that the new AMA definition of marketing (August 2004) is quite favorable to services researchers. She identified four major emergent themes: 1) understanding customer behavior over time, 2) channels and network partners, 3) how markets and firms behave over time, and 4) the global application of foundation theories.

Regarding customer behavior over time, Bolton noted the proliferation of multi-source data and the need for understanding and organizing longitudinal information from sources across all parts of the value chain. She said, “What about when the customer initiates contact? We need theories that explain customer behavior over time.” Bolton also declared a need for theoretical developments in channels and network partnering, particularly relative to the Internet, wireless technologies, and different electronic channels. She said we need more theory building and theory testing on harmonizing actions across channels and touchpoints as well as the allocation of resources across marketing activities. Bolton called for more work on co-production and co-creation, heralding this as the topic of much hallway “buzz” throughout both the Consortium and the Frontiers conference to follow. The third emergent theme identified by Bolton was market and firm behavior – again over time. Bolton said she would like to see more theory on market structure, for instance, the meaning of competition when everyone is co-producing, as well as innovation in service, and public policy and social welfare. Bolton’s final theme was the question of whether our foundation theories hold across the globe. She emphasized specific issues such as how global markets change and fragmentation and segmentation in developing markets. Bolton closed by noting that we may need to abandon some of our mental models and “take a step back.”

Speaking third, Dr. Tor Andreassen provided an international perspective. He is associate professor of marketing at the Norwegian School of Management, on the review boards of Journal of Marketing and Journal of Services Research, and the founder of the Norwegian Customer Service Barometer. Andreassen opened by walking the participants through a brief history of services research. He started with the 1980s, describing this as a time when service researchers were carving out the discipline. He characterized the 1990s as time of measuring during which the “battle of the concepts” (perceived service quality and customer satisfaction) raged. He also described the 1990s as an era in which marketing attained more relevance for managers as the work on ROQ (return on quality) brought consumer markets under the same scrutiny as financial markets. He said, “We truly moved on from a transactional perspective to a relational one.” Andreassen characterized the new century as a time of regained credibility for marketing. He said, “There is a new era of excitement over concepts such as “customer lifetime value” and “market value added” which are earning the attention of boards of directors everywhere.”

Echoing some of Bolton’s remarks, Andreassen noted some topics that he believes we have overlooked. He sees service quality as the “mother variable” and recommends revisiting the Service Profit Chain (e.g. Heskett, Sasser, and Schlesinger 1997) to further examine what is going on the left hand side of the model, that is, inside the firm. Andreassen suggested that we ask questions such as: “What makes service heroes survive in daily life?” and “How can some people manage time pressure better than others?” He said, “What if we just ask?  Then we can develop a culture based on this.” Andreassen’s final comment was equally thought provoking. He said, “Eighty percent of new services and products fail. Are we listening?”

The session concluded with a vigorous question and answer period that highlighted the panelists’ key themes. So hear ye, all ye budding services scholars - the future is about time (and technology). Go forth and research!

Reference
Heskett, James L., W. Earl Sasser, ad Leonard A. Schlesinger (1997), The Service Profit Chain, New York: Free Press.