Using Dissatisfied Customers as a Source for Innovative Service Ideas

Abstract

When service firms are challenged by their aging brands to become “innovation oriented,” they depend in part on key organizational competencies, such as employee competency and market orientation. These competencies are at the core of innovation in a service firm such as a hotel or a restaurant franchise. An innovation-oriented service franchise knows how to listen to its employees and customers; however, choosing which customer or employee to listen to might be paramount to finding radical innovative ideas. Learning from the past, this article investigates sources of innovation in the hospitality industry and tests the lead-user method borrowed from the manufacturing industry to extract innovative service ideas from the market before they materialize as competing market offerings. Using a downtown hotel as an empirical example, this study shows that not only are innovative service ideas present in the marketplace, but also that the best ideas most likely exist within the minds of current and past dissatisfied clients, the latter of which is often referred to as “service defectors.”