Service innovations’ roles in long-term relationships with business customers

Service innovation is to introduce new service to customers and it helps to enter a new market. It gains the capability for sustainable growth and survive. This study tries to find out the role of service innovation in the B2B market. This study focuses on the service providers which adapt IT to their service and its customers. Technology is one of the primary resources of service science focusing on value propositions to the customer. The co-creation activities between the firm and customers allow making synergy. In this context, this study researches experience, personalization, and relationship as factors of value-in-use. A long-term orientation refers to considering not only current or the short term effects of partner but also both the past experience and future importance. Thus this study built a structural model to explore the role of service innovation in a long-term relationship with the business customer. In the research model, service innovation is hypothesized to affect value-in-use. Value-in-use is hypothesized to affect the long-term relationship. In general, the empirical results supported most of the hypotheses except the one upon the relationship between experience and long-term relationship. The study results show that service innovation (i.e. technology and co-creation) determines value-in-use (i.e. experience, personalize, and relationship) which influences the long-term relationship. The experience was found not to have any effect on the long-term relationship with the customer.