Can Servitization Enhance Customer Loyalty? The Roles of Organizational IT, Social Media, and Service-Oriented Corporate Culture

While customer loyalty is among the underlying reasons for servitized firms, the servitization-customer loyalty link is underexplored. In this article, informed by organizational information processing theory, we study the servitization-customer loyalty link and explore the joint effects of organizational practices on the link. We characterize servitization as services supporting products (SSP) and services supporting clients' actions (SSC), and conceptualize organizational practices as organizational information processing capabilities comprising the use of different information technology (IT) tools, which include organizational IT (OIT) and social media (SM), and individual service-oriented cognition, which is manifested in service-oriented corporate culture (Culture). Based on a sample of 207 Chinese manufacturing firms, we find that while servitization does not necessarily enhance customer loyalty, successful servitization implementation depends on proper combinations of IT tools and Culture. Specifically, the SSP-OIT-Culture interaction and SSC-SM-Culture interaction are positively associated with customer loyalty. Our findings not only provide evidence against the conventional intuition that customer loyalty can be achieved by adopting servitization, but also explicitly show how to enhance customer loyalty by proper organizational practices, which provide new insights into both servitization and organizational information processing theory.

Automated summary

This article explores the link between servitization and customer loyalty, along with the joint effects of organizational practices on this link. Based on a sample of Chinese manufacturing firms, it is found that successful servitization implementation depends on the proper combinations of information technology tools and organizational culture, which positively impact customer loyalty.