Service-Dominant Orientation: Measurement and Impact on Performance Outcomes

• Service-dominant (S-D) orientation is a portfolio of value co-creation capabilities.
• The five-stage measure development confirms a six-component structure of an S-D orientation.
• S-D orientation is a significant direct and indirect driver of critical customer performance outcomes.
• S-D orientation is a significant driver of firms’ market performance.
• S-D orientation has indirect positive effects on firms’ financial performance.

A firm's ability to offer better service and to co-create valuable customer experiences is critically important to achieving competitive advantage. Service-dominant (S-D) logic, along with resource and capability perspectives, provides the underlying theoretical reasoning for the relevance of such capabilities. However, despite researchers’ recent contributions to marketing theory, empirical support for S-D logic and its implications is very limited at the strategic level. An open question, therefore, is what empirically constitutes a value co-creation capability, and what is its impact on important performance outcomes. Building on the conceptualization of an S-D orientation as a portfolio of value co-creation capabilities, this research first operationalizes and validates an S-D orientation measure through a multi-study approach across different contexts. The authors then apply the measurement instrument to an automotive retail setting to investigate the outcomes of S-D orientation in terms of both customer- and firm-related performance metrics. Results provide the first empirical demonstration of the importance of S-D capabilities, and thus S-D logic, for firms.

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