Service Customization Research: A Review and Future Directions

Service customization is an important new opportunity for firms in their pursuit of better outcomes in their service provision process. Much like the recent expansion of product customization in goods markets, service customization has been expanding recently due to a variety of factors, such as technological development allowing for improved service delivery and better communication with customers as well as a growing acceptance amongst customers of the customization process. Much of the previous research on services in this area has viewed service variability as a negative that should be limited. However, customer variability in product needs provides a similar opportunity to deliver more value for consumers through specialization of services. In fact, the co-creation of value in services makes the development of effective mass customization systems in the area of services exceptionally important. This chapter will examine service mass customization and the design of systems for service customization. Starting with a review of extant work, the chapter will develop a framework for service customization and service design, specifically, focusing on the concept of customer variability and how this concept can be used to extract greater value from the transaction between the customer and the firm. Based on the framework, the chapter will then identify important directions for further research from both practice and academic viewpoints.