Service innovation, customer-perception & loyalty: an experiment how does customer-perceived service innovation affect customer loyalty?
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- Master Thesis 
Over the past years, due to an ever-accelerating progress of innovation, service innovation has become a highly relevant research topic. Nonetheless, most research focuses on innovation from a firm perspective. Consequently, the customer's point of view, which is crucial for a service innovation to succeed, is neglected and there is little knowledge about how customers perceive service innovation and the subsequent effects on loyalty. Therefore, this thesis has the objective to enhance the understanding of customer perception of servicescape and customer relations innovations specifically, their effects on emotional and cognitive satisfaction and ultimately on customer loyalty. After establishing the theoretical model with the prescribed relationships, an experiment via an online survey was conducted to investigate the causal relationships. Whereas the control group received a case without any manipulation, the three treatment groups received texts describing a servicescape innovation, a customer relations innovation or a mix of both. After analysing all responses (N=124) by applying structural equation modeling, no general significant relationship between firm innovation and customer loyalty was found, as only 5 of our 19 hypotheses were supported by the data. Only the mix of both innovation types led to significant perceived changes in servicescape and customer relations. These perceived changes, however, only have significant effects on emotional, but not cognitive satisfaction. Moreover, we confirm findings that both emotional and cognitive satisfaction have significant effects on customer loyalty. Conclusively, this thesis has been a further step in the process of understanding the customer's perception of service innovation and provides several directions for further research in the field.