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The Service Delivery Network (SDN) A Customer-Centric Perspective of the

Customer Journey

Article  in  Journal of Service Research · October 2013

DOI: 10.1177/1094670513481108

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Customer Journey
AQ 1 Stephen S. Tax1, David McCutcheon1, and Ian F. Wilkinson2

Abstract
In this article, we introduce the concept of the service delivery network (SDN) defined as two or more organizations that, in the
eyes of the customer, are responsible for the provision of a connected overall service experience. This responds to calls for
frameworks recognizing that dyadic service encounters are embedded in the series of experiences customers have with comple-
mentary providers as part of the journey to achieve their desired goals. Adopting an SDN perspective presents a dramatically
different set of challenges for managers and provides research opportunities challenging the current view of established service
concepts. Managers must recognize that to better serve the customer they need to understand the role that they play in the
customer-defined service journey and be prepared to coordinate their activities with complementary providers. Participating
in helping build and manage the SDN for the customer, or understanding how they fit into customer’s self-designed SDN,
becomes a central challenge often requiring firms to develop a new set of capabilities. The SDN also challenges the way we view
many of the core concepts in service research, which are anchored in the dyadic view. This provides considerable opportunity for
future inquiry. We present a series of research questions, inspired by the SDN, organized into categories including building coop-
erative and collaborative networks, customer cocreation, systems thinking, customer relationship management, managing service
failure and recovery, building capabilities, and customer-to-customer interactions.

Keywords
AQ 2

Introduction as interactions embedded in a series of exchanges that may

The term service encounter has long been used to denote
the interplay between the customer and the service provider
(Bitner, Booms, and Tetreault 1990). It is a central concept
within service research, as it provides the basic situation
whereby the customer coproduces value through interaction
with the organization’s service delivery systems. In the often-
cited definition, Surprenant and Solomon (1987) described the
service encounter as ‘‘the dyadic interaction between the cus-
tomer and the service provider firm.’’ The related concept of
the customer experience has also been frequently defined to
only include direct and indirect contact between the customer
and the service provider (e.g., Meyer and Schwager 2007). The
central assumption underlying these conceptualizations is that
the service encounter is dyadic in nature and that the customer
assesses the firm in isolation. This assumption is at the core of
many service models and our definitions of key concepts such
as service quality and customer satisfaction (Rust and Chung
2006).
More recently, the view of the service encounter has
expanded to encompass a perspective of providers engaged in
delivering a ‘‘customer journey’’ (Patrı́cio et al. 2011; Zomer-
dijk and Voss 2010). This perspective views service encounters
extend over a considerable period of time and with a variety
of providers contributing to the experience. In such circum-
stances, the customer’s interactions with other providers are
likely to have significant impacts on the service encounters
with any particular firm that contributes to the overall service.
A service provider may play a leading or a subordinate role in
organizing the customer’s activities or in directing the delivery
of service components by others. Alternatively, the customer
may act as a ‘‘resource integrator,’’ assembling and coordinat-
ing interrelated services to achieve a given objective (Lusch
and Vargo 2006).
Consider the example of a chiropractor who regularly sees a
patient for spinal adjustments. The provider may view the rela-
tionship as a dyadic exchange where her responsibility is to AQ 3
1
Peter B. Gustavson School of Business, University of Victoria, Victoria, British
Columbia, Canada
2
University of Sydney Business School, University of Sydney, Sydney, Australia
Corresponding Author:
Stephen S. Tax, Peter B. Gustavson School of Business, University of Victoria,
P.O. Box 1700 STN CSC, Victoria, British Columbia, Canada V8W 2Y2.
Email: stax@uvic.ca
 2 Journal of Service Research 00(0)
repair the patient’s alignment. The patient, however, is focused
on his back health (i.e., his ‘‘customer journey’’) and also visits
a dietician, a trainer, a gymnasium, and a massage therapist.
Assessing the chiropractor-patient interactions independently
does not account for the possible impacts from the patient’s
exchanges with the other contributing providers, which lead
to the following questions:
Research Question 1: How is the patient affected by the need
to assemble his own network of providers versus being
assisted with referrals and advice from the chiropractor?
Research Question 2: How does the encounter differ for the
chiropractor if she takes a lead role in coordinating
services versus being one of several providers in a subor-
dinate role for this particular patient?
Research Question 3: How does the patient react when given
an unsatisfactory referral by the chiropractor versus
making an independent choice for the same provider?
Research Question 4: What is the impact on the patient of
being given contradictory advice or treatment by different
service contributors?
Research Question 5: How is the patient’s satisfaction with
the chiropractor affected by an unsatisfactory encounter
with an independent but related service?
From the patient’s perspective, the journey spans multiple
providers who form a network centered on him. Even though
each of the providers interacts with him separately, they are
bound together to some extent in the patient’s mind through the
previously listed issues. By examining the set of dyadic
encounters from the perspective of the patient’s network, sub-
stantially different insights emerge than when just focusing on
each encounter as an isolated dyadic interaction.
Viewing the service encounter from the perspective of the
network seen by the customer is consistent with the approach
of Anderson, Håkansson, and Johanson (1994) who demon-
strated that business networks are formed through dyadic
buyer-seller relations being interconnected to other buyer-
seller relations. The increasing interest in the network outlook
is also observed in calls for research to introduce network per-
spectives in the study of services (Gummesson 2007; Ostrom
et al. 2010; Scott and Laws 2010; Vargo and Lusch 2004). The
central goal of this article is to provide the logic for complement-
ing the dyadic service encounter perspective with a broader
network view that emerges when the customer’s providers of
related services are taken into account. This serves to support
recent process-oriented frameworks (e.g., Patrı́cio et al. 2011;
Sampson 2012) of the customer experience by accounting for the
nature of the relationships among members. As a means to shape
the discussion, we introduce the customer-designated service
delivery network (SDN) defined as two or more organizations
that, in the eyes of the customer, are responsible for the provision
of a connected, overall service. We reveal why this is valuable
and demonstrate the advantages of the customer-centric network
view for the advancement of service management and research.
AQ 4 Consistent with the categorization scheme of MacInnis (2011),
our goal is one of envisioning, providing an expanded concep-
tualization of the traditional service encounter by understanding
the role of network impacts.
The remainder of the article is organized as follows. First,
we present our motivation for introducing the SDN as a context
to view dyadic exchanges. Second, we review the relevant net-
work literature and establish the foundational principles of the
SDN. Third, we contrast the current dyadic perspective with the
SDN view and provide a discussion of the importance, implica-
tions, and associated challenges for researchers and managers.
We conclude with a robust future research agenda.
Why Introduce an SDN Perspective?
This research responds to the many calls in the literature to
more closely consider the role of networks in service (e.g.,
Baron and Harris 2009; Gittell 2002; Gummesson 2008; Lusch
and Vargo 2006; Ostrom et al. 2010; Scott and Laws 2010). In
describing our motivation, we consider two related themes: the
increasing reliance on networks resulting from service frag-
mentation and the impact of the Internet, and the development
of the customer experience literature that recognizes the impact
of forces outside the firm on service encounters.
Increasing Reliance on Service Networks
A central reason cited for the importance of adopting a network
perspective is that customers increasingly encounter multiple
providers in pursuit of achieving their service goals. One factor
in this trend is the growing fragmentation of service delivery.
Firms are more reliant on outsourcing, contracting out service
elements that these firms once provided internally (Ostrom
et al. 2010). In some cases, the reliance on others stems from
the firm’s choice to limit the range of its own activities, out-
sourcing noncore portions of its processes to other firms, stem-
ming in part from the notion of concentrating on the firm’s core
competencies (Prahalad and Hamel 1990). In conjunction with
this movement to focus on specific processes, there has been
the growth of industries specializing in providing support func-
tions such as transportation and logistics, customer support,
and after-sales services. The scale and scope economies and
expertise afforded by the support specialists have further
increased the appeal for firms to outsource parts of their service
delivery (e.g., Cho, Ozment, and Sink 2008; Kemppainen and
Vepsäläinen 2003).
In addition to the fragmentation of service delivery due to
outsourcing, increasing technological complexity in many
offerings has led to specialization among service providers and
their increased reliance on complementary providers. For
example, the mobile telephone industry is characterized by
specialized providers of handsets, operating systems, applica-
tions, network services, and maintenance services. Some of the
providers work with others to bundle service elements together,
while others leave it to individual customers to create the com-
bined service offerings.
Tax et al.
The Internet has also had profound effects on service provi-
sion by facilitating customers’ abilities to become ‘‘resource
integrators’’ and create their own networks (Lusch and Vargo
2006). First, it has increased the ease with which customers can
search for and compare service offerings, allowing them to
select various service providers on their own where they may
have previously relied on a familiar provider to meet all of their
needs. Second, the Internet has given rise to aggregators and
intermediaries that act as agents who take on the resource inte-
grator role. Although such services potentially add to the ser-
vice encounter’s complexity by introducing another provider,
they allow customers to pick ‘‘dynamic packages’’ (Piccoli
et al. 2009) that meet individual preferences instead of those
created through a firm’s more rigid alliances with selected
complementary service providers.
Using the Customer Experience Approach to Alter Our
Perspective
The dyadic view of the service encounter has been challenged for
not recognizing the importance of factors outside the organization
that contribute to the customer experience (Gummesson 2008;
Verhoef et al. 2009) and not accounting for the importance of the
coordination of service providers both within and across organi-
zations to support customer satisfaction (Gittell 2002). Sampson
(2012) points out that service processes frequently cross entities
to address the customer’s needs. Patrı́cio et al. (2011) refer to
these external entities as comprising the ‘‘customer value constel-
lation,’’ and they are an important part of the multilevel service
design process. These frameworks are consistent with articles
on service innovation, growth, and experience management that
contend that firms need to understand service from the perspec-
tive of the customer’s overall requirements or goals. This includes
identifying from the customers’ perspective all of the touch points
that comprise the journey required to help them get achieve their
goals (Zomerdijk and Voss 2010). One clear result of advanced
blueprinting and design approaches is that mapping out the ser-
vice from the customer’s perspective is the recognition that the
journey frequently involves touch points at multiple parts of an
organization and often with external partners as well (Patrı́cio
et al. 2011; Sampson 2012).
U-Haul, a US-based provider of self-move and storage
resources, provides an excellent example of how a customer-
centric perspective benefits from a network approach (Betten-
court and Ulwick 2008). In addition to its core moving services,
U-Haul helps customers locate other services needed to com-
plete the job of moving their physical goods. The firm offers pre-
packaged moving kits that reduce the time customers take to
gather the different boxes and moving supplies. Further, an
online partnership with eMove, an electronic marketplace of
self-moving- and self-storage-related consumers, business own-
ers, storage affiliates, and moving helpers, assists customers
quickly locate a variety of ancillary services offered by human
helpers—packers, babysitters, cleaners, and painters—that
recognizes the interconnected set of services that customers
require to accomplish their goals.
3
A second example from leading design firm Innovation,
Design Engineering Organization (IDEO) demonstrates the
value of considering all of the touch points in a customer jour-
ney and adopting a network perspective (Jones 2007). The firm
was working with Blue Cross/Blue Shield (BC/BS), a large
U.S.-based health care insurance company, to understand the
customer’s health journey to help the client position and design
the role the client would play. Through its field interviews with
customers, IDEO discovered and clearly defined the seven
roles that someone needed to play for the journey to be favor-
able: guide, teacher, coach, personal assistant, expert, financial
advisor, and consumer advocate. Based on further analysis,
IDEO recommended that BC/BS takes on the roles of guide and
financial advisor, relying on other parties to assume responsi-
bility for other roles in the customers’ journey.
A number of implications emerge from this case when using
the customer journey perspective. First, the journey is based
solely on the customers’ experiences. Second, the network of
providers beyond BC/BS delivering each role is potentially
unique to each customer. The insurance company’s success
in its part of the service encounter depends on the other service
providers that each customer selects to play the complementary
roles. Third, the customer plays a central role in cocreating the
network of providers delivering the services. Fourth, each
series of dyadic interactions with a network member is
embedded among the many other encounters with the other
members of the customer’s network supporting his health
journey. Finally, the complexity of the journey, driven by the
number of organizations and people involved, leads to chal-
lenges in coordinating the activities of the network members.
The above illustration suggests that placing the service
encounter in a network context provides a broader, more realis-
tic view of service experiences and also allows us to tap into the
rich literature about networks to label and better understand the
conditions that occur within them. This adds an important
dimension to the more process-oriented approaches introduced
to better understand the service encounter and associated expe-
rience (e.g., Patrı́cio et al. 2011; Sampson 2012). In the next
section, we develop the concept of viewing the service encoun-
ter in this network context and we explain how the SDN fits
within the extant terminology and discussion about networks.
SDN
A network consists of a set of actors or nodes along with a set of
ties that connect them (Borgatti and Halgin 2011). The pattern
of ties yields a particular structure and the nodes occupy posi-
tions within this structure.
Networks are challenging to define as they do not have nat-
ural boundaries; however, as Borgatti and Halgin (2011) point
out, the relevant network is defined by the investigator who,
based on the purpose of the research, selects the set of nodes
and the types of ties to include or exclude. In describing the ser-
vice encounter, there is a critical need to consider networked
service delivery in the way that the customer sees the service,
in other words, to adopt a customer-centric approach (Shah
4 Journal of Service Research 00(0)
Client
Lawyer
Figure 1. The dyadic service encounter. In the dyadic view, a service
provider (in this case, a lawyer) interacts with the client in isolation,
even though the lawyer’s interaction may form only part of the cus-
tomer’s overall service experience.
et al. 2006). Through this perspective, we recognize what a cus-
tomer sees as the relevant set of actors and ties and, from there,
can gauge how that customer is impacted by the particular net-
work’s effects on each service encounter with the relevant
firms. A larger network of interconnected customer-provider
product and service relations also exists beyond a specific cus-
tomer’s SDN, one that includes the service providers’ suppli-
ers, competitors, customers, and complementors (Wilkinson
2008). However, consideration of this larger set of relations
is beyond the scope of our focus on the customer-provider
interactions with a service encounter.
In network terms, we adopt a focal net or ego network
approach where we examine the situation from the perspective
of a single actor—the customer (Borgatti and Foster 2003; Burt
1992). The customer acts as the ‘‘hub’’ or focal node and the
network includes as nodes the set of actors (service providers)
who directly touch the customer in his particular service jour-
ney, with the customer’s encounters represented by ties
between the customer and the providers.
Specifically, we define the resulting SDN as two or more
entities that, in the eyes of the customer, are responsible for the
provision of a connected, overall service. The SDN also includes
any ties that may exist among the providers that the particular
customer encounters, where the ties represent interprovider
interactions that affect the customer. Note that many SDNs may
have no such interprovider ties, particularly where customers
have numerous alternative providers from which to choose.
The Embedded Service Encounter
Consider the case of wealth management services where a cli-
ent may have a certified public accountant, a lawyer, a financial
planner, a chartered life underwriter, and an estate planner
involved in the process. The dyadic perspective of the service
encounter views interactions with each provider as independent
of the exchanges with the other professionals.
The SDN approach considers the encounters with each provi-
der to be embedded within a network defined by the exchanges
with the other professionals. In Figure 1, we first show the dya-
dic view where the client interactions with the lawyer are inde-
pendent of interactions with any of the other professionals. The
same conditions would apply for the other providers. Figure 2
illustrates the SDN perspective where the client interaction with
each professional is potentially influenced by the customer’s
experience with the other providers.
In network terms, the customer in a service encounter is the
center of an individual ego network, while the relevant service
providers who contribute to the customer’s wealth management
journey are the ‘‘alters’’ (i.e., other network nodes or members)
for that customer (Borgatti and Foster 2003). The lawyer in our
example is only one of the customer’s ‘‘alters’’ and the encoun-
ter may be affected by the particular ego network’s configura-
tion. In this particular example, the nature of the service
requires that the providers interact to ensure that the overall ser-
vice is properly coordinated; in other circumstances, there may
be few ties and limited interaction among the firms, with the
coordination duties falling to the customer.
In the figures, we highlight the customer’s tie with the law-
yer by bolding it to emphasize that the SDN conceptualization
is, like the dyadic service encounter model, a means of portray-
ing the interaction between a particular service provider and its
customer. While the SDN is derived from the customer’s per-
spective, it is designed to frame conditions facing each of the
service firm’s managers. One firm is likely to be the focus of
the customer at a specific point in time but that shifts when the
customer is in contact with a different provider. Figure 2, by
using a customer-centric perspective, helps the lawyer recog-
nize that, during any encounter with a client, he must consider
not just the customer but also the role played by other service
providers contributing to the overall service.
The SDN approach is designed to model the encounter with
an individual customer to inform the firm about the conditions
that are relevant for that encounter. However, it is also instruc-
tive to consider what different scenarios may occur when numer-
ous customers’ SDNs are aggregated, that is, what the firm faces
with the pattern of SDNs arising from its customer base. In some
cases, a firm’s customers may have very similar SDNs; in other
cases, the SDNs may be very diverse and the differences affect
the firm’s ability to manage service encounters.
Constrained Versus Unconstrained Customer Choice
One decision a service provider must make is whether or not to
restrict its customer’s selection of complementary providers. In
Figure 3, we depict the example of an appliance retailer that has
chosen to designate a sole provider of warranty repair services.
Under these circumstances, the networks of the retailer’s cus-
tomers will have some similarities and there is likely to be a
Tax et al.
Chartered
Life
Underwriter
Investment
Advisor
Client
Lawyer
Figure 2. The service delivery network encounter. Each service provider interacts with the client who relies on other providers who con-
tribute complementary portions of the overall service. In this case, the client requires expertise from several professions for wealth manage-
ment services. The encounter with each provider may be impacted by the client’s experience with the other professionals. In addition, the
providers here must interact to coordinate the overall service.
more formal arrangement between the retailer and the warranty
service provider. Note that customers may choose other net-
work members, such as a financing company, contributing to
differences in their SDN.
We expect a very different situation where a firm has little
power to direct customers to specific coproviders. For example,
customers of a hotel in an urban center have many options for din-
ing and entertainment that make up other components of their
experiences. Figure 4 shows this contrasting situation where cus-
tomers are free to choose complementary service providers; here,
each ego network of these two customers has multiple ‘‘alters’’ in
the form of customer-selected complementary service providers
that have no connection to the core service provider, or to one
another. The contrasting situations illustrate the potential differ-
ences in the extent of commonality among the SDNs that custom-
ers might bring into the firm’s service encounters.
Collectively, this comparative similarity or diversity across
all of the firm’s customers’ SDNs creates what we call the
degree of SDN commonality of the firm’s collective interac-
tions with customers. The firm’s degree of SDN commonality
may be as important for service firm managers as the formal
networks they establish since high diversity among customers’
SDNs can greatly affect the design of the firm’s own processes.
5
Estate
Planner
Certified
Public
Accountant
Piccoli et al. (2009), for example, differentiate between an alli-
ance strategy whereby partnering organizations build intercon-
necting systems and an agility strategy whereby the firm’s
systems must be able to allow customers to choose their own
service coproviders. The need to accommodate different con-
figurations of customers’ SDNs places greater burdens on the
design of the firm’s service processes.
In cases such as the one depicted in Figure 3, the SDNs of
customers will be quite similar if the firm has the power to
direct them to use specific coproviders. In network terms, such
power may be derived through the firm’s network centrality, its
size or its ability to bridge structural holes among the custom-
ers’ networks (Burt 1992; Wilhelm 2011). An example of
power derived from bridging structural holes is U-Haul’s
service of recommending related moving services to its cus-
tomers; there are many structural holes in the customers’ com-
bined networks (in that there are few connections among the
customers other than their common use of U-Haul) that might
otherwise help these customers locate alternative coproviders.
In this case, U-Haul has more power in being able to provide
expertise not available to its otherwise unconnected customers.
However, in many cases, firms may not even be aware of other
contributors to various customers’ overall services since each
6 Journal of Service Research 00(0)

Customer Customer

Firm-specified Firm-specified
Complementary Appliance Complementary
Service Provider Retailer Service Provider
(Delivery service) (Repair service)

Figure 3. The service delivery network environment with constrained customer choices. Given sufficient power, the firm may be able to dictate
to customers which specific complementary service providers may be used in conjunction with the firm’s services. A high degree of commonality
among customers’ SDNs promotes interaction among service providers.

Complementary
Complementary
Service Provider
Service Provider
(Ground transport B)
(Ground transport E)

Complementary Complementary
Complementary Complementary
Service Provider Service Provider
Service Provider Service Provider
(Entertainment (Airline D)
(Airline A) (Entertainment
provider C)
provider F)

Customer Customer

Hotel

Figure 4. The service delivery network environment without customer choice constraints. Potentially, the firm may have customers who bring
unique sets of complementary service.
Tax et al. 7

SDN is not necessarily created and managed by the service

coproviders.

Coordinating Service Networks Customer Restaurant

The need for many networked services to be coordinated leads

to additional tasks that otherwise may not be considered as an
essential part of the service encounter. While the service
encounter has considered the customer’s role as interacting
with the firm in isolation, in network-based encounters, the cus-
tomer’s role may expand to include activities such as service
coordination. As well, customers may have expectations that
one or more of the service providers within their SDNs under-
take coordinating roles, influencing their satisfaction with Theater Ground
particular providers. By recognizing these aspects of the cus- Company transport
tomer’s requirements, the firm may be able to expand its
services without impinging on the roles already played by
complementary service providers in the customer’s SDN.
Clearly, the customer’s SDN may be quite different from Figure 5. Service delivery network where the customer coordinates.
what firms see as their networks from the traditional viewpoint. The customer organizes an evening’s entertainment. There may be no
There may be no formal agreements or connections among firms ties among any of the service providers. Each service provider may be
that the customer views as service coproviders. For example, a unpredictably impacted by the customer’s service encounters with the
other providers.
theater company in a large city might see its network as largely
its subscribers and its supplier base. However, for the customer
who buys a theater ticket, the overall service experience might
involve transportation, parking options, babysitting services, a
wide range of alternative dining spots, and any other contributors
to the customer’s evening out. While the traditional perspective Customer Restaurant
of the service encounter views the interactions with each provi-
der separately, the customer may perceive them collectively; a
good experience with one component of the overall experience
can positively influence the customer’s view of the others. As
shown in Figure 5, the customer may act as a ‘‘resource integra- Event
tor,’’ selecting the play, restaurant, and transportation service Package
independently. Alternatively, as shown in Figure 6, the customer Co.
may rely on an agent such as an event’s company that integrates
the service components by packaging the theater with a restau-
Theater
rant and transportation service. This arrangement allows the Ground
Company
agent to develop a relationship with the customer without any transport
of the other service contributors being strongly connected to the
customer or their coproviders. As the theater company begins to
see the encounter from the customer’s perspective, it can
develop relationships that address the overall service experience,
Figure 6. Service delivery network where customer uses a service
not just its own component. As shown in Figure 7, it might take a coordinator. Each service provider is contracted by an event planner.
leadership role in organizing the customer’s evening entertain- The event package company plays a central role as a coordinator, with
ment by coordinating the delivery of complementary service ties to each other service providers but there may otherwise be no
components by other selected providers. By organizing the res- ties among service providers.
taurant and transportation providers, the theater may be able to
manage the customer’s experience more effectively as well as (Wilkinson 2008). Such changes offer strategic opportunities
establish a closer relationship. and pose threats for those involved (Ritter, Wilkinson, and
It should also be noted that SDNs are dynamic. The experi- Johnston 2004).
ence and outcomes of the various service encounters can
strengthen or weaken existing relations; customers’ SDNs
change and evolve over time as new providers and aggregators
SDN Membership
enter the scene and disrupt existing networks and as customers’ We include within SDNs just those agencies with which the
needs change and they learn about different alternatives customer interacts directly for a particular overall service. Like
8 Journal of Service Research 00(0)
Customer Restaurant
Theater Ground
Company transport
Figure 7. Service delivery network where service provider takes a
leadership role. The theater company selects a nearby restaurant as a
partner and promotes it with restaurant discounts offered to theater
ticket holders in return for the restaurant’s special timely service for
theater patrons. The theater company also promotes a particular taxi
firm in return for having sufficient transport capacity available after
performances. By taking a leadership role and developing ties with
other providers, the theater company is likely to improve the overall
experience for participating customers.
others have, we recognize that firms are not isolated: Their
behavior and performance depend not only on their own
efforts, skills, and resources but also on those of others to
whom they are directly and indirectly connected (Gummesson
2008; Wilkinson 2008). Virtually all firms will have supply
bases but, in most cases, customers are likely unaware of the
contributions made to the final service by this network of sup-
pliers; we do not consider such suppliers as part of the SDN.
We do include in the SDN those contract suppliers that deal
directly with customers on the firm’s behalf. Examples are con-
tracted tailoring services working within a department store or
contracted telephone-based customer support services. A firm
may not portray such service providers as separate entities;
however, their independent roles may become apparent to the
customer in the event of a service failure when the problem res-
olution might bring their roles to light.
Although the SDN does not include the indirect contributor
service providers such as suppliers, the network may include
fellow customers if they contribute to service delivery. Educa-
tion programs often rely on classroom participation or group
projects, making classmates’ part of each other’s SDN. Audi-
ence participation entertainment and adventure tour companies
are other examples of services that depend on customers as
major inputs in the experience (Arnould and Price 1993; Baron
and Harris 2009).
The customer-centric definition of the SDN provides a par-
simonious frame in delineating just the providers that the
customer directly encounters. This delineation makes the SDN
distinct from a value net perspective (Gummesson 2007) that
includes the supply chain, complementors, and competitors.
While the value net may be very useful in addressing future
questions associated with service networks, our focus is on the
part of that network that the customers sees and interacts with
directly, since these actors directly affect the service encounter
and customers’ perceptions.
Dimensions of Aggregated SDNs
Given that the firm encounters many individual customers who
are the central nodes of their own SDNs, the service firm has to
manage the individual encounter but plan its service processes
according to the aggregated SDNs of its anticipated clientele.
We have referred to one aspect of this aggregation of the individ-
ual SDNs as the degree of SDN commonality—what the service
firm faces as the result of the aggregated network configurations
of its customer base. The SDN commonality among customers is
potentially affected by the providers’ networks as well, particu-
larly if the customers’ network configurations are driven by
arrangements among the providers. For example, if a service
firm requires that customers use of a particular set of coproviders
exclusively, there will be far more congruity among the SDNs of
the firm’s customers. Both customers and service providers are
likely to be impacted by differences in some important dimen-
sions of the firm’s degree of SDN commonality. Some dimen-
sions of this characteristic include but are not limited to:
 Formality of the service provider network: Commonality or
diversity among the SDNs of a firm’s customers may be
driven in part by the conditions established by the firm’s
network of coproviders. Networks among service providers
may vary from formal relationships governed by multilat-
eral contracts to situations where there is no formal
arrangement, with interconnections driven only by factors
such as geographical proximity. For example, a playhouse
and nearby restaurants or a medical center and neighboring
pharmacies—or other conditions that lead customers to use
the same combinations of service providers. Clearly,
greater use of formal relationships among coproviders may
improve their service coordination, even if only some of the
customers are shared among them, which may enhance
satisfaction of the affected customers (Gittell 2002).
 Transactional versus relational goals: A customer may pre-
fer to establish long-term relationships with some network
members but only deal on a transactional basis with others
within the same SDN. For example, a customer may be a
loyal patron of a particular hotel chain but uses various
online reservation websites to book rooms. While the hotel
chain would prefer that the customer booked directly
through its own reservation service, each travel booking
service also has an interest in developing a relationship
with the same patron. In such cases, the customer faces
issues in maintaining loyalties toward multiple service pro-
viders who vie to establish the central customer relationship
within their patrons’ SDNs. A customer’s SDN may
include several complementary service providers that aim
Tax et al. 9

Table 1. Contrasting the Dyadic and SDN-Based Service Encounters.

Dyadic service encounter SDN-Based encounter

Basic tenet The customer interacts with a single service provider The customer’s experience involves multiple service providers
that delivers the entire encounter independently that together create the overall service experience
Customer’s role in The customer is a coproducer, realizing value through The customer is a coproducer with multiple service providers but
the service interaction with the service provider may assume the role of a coordinator among them
encounter
Managing service The customer’s service encounter quality assessment The customer assesses provider’s quality in part on the gestalt
quality is based on interaction with the organization derived from a service encounter involving multiple
organizations
Service failure and Customer satisfaction in the event of a service failure Customer satisfaction with one service provider may depend not
recovery issues depends on the organization’s recovery efforts only on the organization’s recovery efforts but also on actions
taken by others within the SDN
Customer A service provider cultivates a customer relationship Customer relationship with a service provider is affected by the
relationship that is independent of actions by other service provider’s choice of complementary service providers, by its
management providers effectiveness in coordinating the customer’s network, its role in
reducing ambiguity, cooperating with other providers, and
solving network-related problems
Service orientation A service provider instills a service-oriented culture Providers must seek out partners with shared values to ensure
consistency in service experience. This is more challenging
where customers may bring network members into the
relationship
Firm’s process The firm independently considers how best to design The firm needs to consider not only its own processes but also
design and manage its own processes to attract and retain how well they fit with complementary providers; constraining
considerations customers customer choice of other providers trades off efficiency with
marketability

Note. SDN ¼ service delivery network.

to develop customer relationships, potentially causing con-
flict that affects the customer’s overall encounter. For
example, the customer may be negatively affected by lack
of cooperation between the hotel and the booking service,
each of which could withhold information from the other
firm to gain advantage in managing the customer
relationship.
 Degree of customer freedom in selecting providers: As pre-
viously observed, firms may have the option of constraining
their customers to use only specified coproviders. Examples
include health maintenance organizations that specify autho-
rized primary-care and secondary-care providers, or mono-
poly government services such as vehicle licensing offices.
Figure 3 depicts this situation where the focal firm dictates
that its customers must use one or more particular coprovi-
ders. The resulting higher degree of SDN commonality
affords the firms more predictability in its service encoun-
ters. The common interests among the linked providers are
likely to lead to stronger ties among them.
 In contrast are situations where customers are uncon-
strained in selecting service coproviders, such as that
depicted in Figure 4 where a firm’s customers have only the
focal firm in common within their SDNs. Greater freedom
in selecting service coproviders is likely more attractive for
customers but introduces complexity for the service provi-
ders. Such firms will have fewer opportunities to develop
strong ties with particular coproviders and customers, with
their divergent SDNs, will likely bring different expecta-
tions and requirements into their encounters.
 Complexity of the overall service offering: Networked
service encounters range from the uncomplicated purchase
of a coffee in a Starbuck’s outlet in a hotel lobby to the
complex situation of long-term medical treatment. Com-
plexity increases with the number of elements in a system
and with the dimensionality, that is, the relative unpredict-
ability of interactions among customers, service providers,
and other system elements (Choi, Dooley, and Rungtusana-
tham 2001). In regularly contributing to more multifaceted
service offerings where the customers and their SDNs
inject more dimensionality, firms may face more complex
service requirements that demand greater flexibility within
each process stage, compatibility with a broader range of
providers, involve more consequential decisions for the
customer, require more information exchange and coordi-
nation, and have less predictable outcomes.
The conditions created by the collective nature of the firm’s
customers’ SDNs vary with these and other dimensions. In the
next section, we indicate how viewing service encounters as dya-
dic customer-firm interactions does not account for important
details when in fact the customer instead encounters an SDN.
Contrasting the Dyadic and SDN
Perspectives of the Service Encounter
In this section, we compare the SDN and dyadic approaches in
terms of how important service management concepts vary
across the two perspectives. Table 1 shows several of the
10
contrasts that arise when comparing the traditional dyadic
customer-firm model of service with the situation where the
customer interacts with a firm that forms part of the customer’s
SDN.
We expand on some of the key differences below.
The Customer’s Role in the Service Encounter
In service, the customer is presumed to be a coproducer (Bend-
apudi and Leone 2003; Vargo and Lusch 2004). Customers’
effectiveness in coproduction depends on factors such as their
familiarity with comparable service processes. However,
coproduction is usually viewed as a process isolated from out-
side influences. The typical service blueprint, for example, por-
trays the service delivery in terms of what the organization sees
within its own systems, mapping out the organization’s internal
processes and customer interactions alone (Bitner, Ostrom, and
Morgan 2008).
In SDN situations, the customer interacts with multiple pro-
viders; the overall process may be intertwined over time, with
interagency dependencies at various stages throughout the pro-
cess (Patrı́cio et al. 2011). Interactions include those involved
in designing and planning the service network itself, that is, ser-
vices through which customers come to know about alterna-
tives and their potential contributions. The temporal
interconnections are evident in the customer-activity chain per-
spective and recent versions of blueprinting frameworks that
consider all aspects of service that a customer performs in con-
junction with the appropriate set of providers (Patrı́cio et al.
2011; Sampson 2012; Sawhney, Balasubramanian, and Krish-
nan 2003).
As discussed, an important consideration in the SDN is the
coordination of the various providers’ activities in serving the
customer. When the customer has few constraints in choosing
service coproviders, the interprovider coordination is likely to
be less developed and the coordination role falls to the cus-
tomer. This is the case in Figure 5, where the customer chooses
to organize the theater experience. How the customer behaves
in this resource integrator role—and how that impacts the cus-
tomer’s experience—is an important aspect of the SDN func-
tioning absent in the dyadic view.
Managing Service Quality
Established service quality models hold that the firm plays a
central role in setting expectations against which perceptions
of service will be compared. While it is acknowledged that
other forces, such as experience with competitors and word
of mouth, contribute to expectations (Parasuraman, Zeithaml,
and Berry 1988), these models do not account for network part-
ners being a primary source of the promises that customers
expect to be fulfilled (such as a hotel having to meet promises
made by an online travel booking site).
As well, the customer’s perception of one firm’s service
quality is probably influenced by the performance of other pro-
viders within the SDN. The network literature supports that the
Journal of Service Research 00(0)
effectiveness of a group of providers influences the perceptions
of the individual member’s performance, given the interdepen-
dence of their efforts (Ancona 1987; Burt 1997). Referrals
within a network of providers put a premium on social capi-
tal—capital based on the relationship ties of SDN mem-
bers—to coordinate effectively to ensure the expected service
quality (Burt 1992; Nahapiet and Ghoshal 1998).
Further, customers who are particularly pleased with an
overall experience may overlook the shortcomings of some net-
work service providers. Services delivered in close succession
by multiple providers may blend together in the customer’s
perception, resulting in a gestalt that affects the customer’s
assessment of individual providers. As Chase and Dasu
(2001) point out, customer perceptions may be inordinately
affected by what happens in the overall experiences later
stages.
Finally, a low degree of SDN commonality among custom-
ers makes it more difficult to identify the best return on quality
(ROQ) initiatives (Rust, Zahorik, and Keiningham 1995). The
ROQ model is designed for targeting service improvement but
requires that customers assess satisfaction with all components
of the experience to identify key drivers of repurchase inten-
tion. As more SDN actors contribute to customers’ experi-
ences, identifying the most valuable areas for improvement
becomes more complex.
Service Failure and Recovery Issues
In the dyadic view, the provider is generally expected to take
responsibility and recover from a service failure (Tax, Brown,
and Chandrashekaran 1998). Where service is delivered
through a network, responsibility for service failures may not
be readily apparent to the customer and difficult for service
providers within the network to agree on attributions of blame.
Even when the problem source has been identified, customers
may expect other SDN members to respond and take care of
their partners’ error. This is challenging as they might have lit-
tle power to correct them. Conversely, service providers within
a network may benefit from solving problems created by oth-
ers. Effecting recovery by correcting coproviders’ service fail-
ures could lead to higher customer satisfaction for a firm
compared to simply doing its own portion in an exemplary
manner.
These possibilities point to the importance of cooperation
and coordination in an SDN service recovery process. The abil-
ity of service providers in the customer’s network to discipline
and cooperate with each other will depend on their relationship.
Failure and recovery incidents are also apt to bring out the com-
petitive nature of SDN member firms and be a source of con-
flict (Luo, Slotegraaf and Pan 2006; Wilhelm 2011; AQ 5
Wilkinson 2008). In the case of a service failure, the firm hear-
ing the complaint can attribute for blame to other parties who
may or may not be responsible, with the intention of reducing
expectations about its own responsibility for the recovery and
also to protect its service quality image.
 Tax et al.
In cases where the provider recommends or restricts custom-
ers to only using a specific partner, customers may have higher
expectations for that provider to assume accountability for the
partner’s failure. Consumer research indicates that when a cus-
tomer refers a friend to a service provider and the friend is
dissatisfied with the performance, the relationship between the
firm and the recommender suffers (Ryu and Feick 2007). This
same risk is likely to occur when firms recommend or restrict
the choice of their customers to select partners. The partner’s
performance will impact the relationship of the recommender
and its customers.
Customer Relationship Management
To effectively manage customer relationships, firms need to
consider the impact of other stakeholders in the process, includ-
ing additional firms delivering parts of the customer solution
AQ 6 (Baron and Harris 2009; Wilkinson and Young 2002). The rela-
tionship management perspective in the service literature has
been criticized for being too focused on the customer and the
individual firm at the expense of understanding the network
influences (Grönroos 2004).
When service delivery involves multiple service providers,
viewing the long-term customer-firm relationship in isolation
from the SDN overlooks at least two important complications.
First, the customer may want to establish a primary resource
within his SDN that remains stable over time—a ‘‘network cap-
tain’’ for a particular type of services. The network captain
might be designated by convention or by regulation, as with the
primary care physician within a customer’s network of health
care providers. In other cases, no central coordinator of the net-
work may exist, with each provider and the customer forming a
looser system of relations. This challenges traditional notions
of management and control (Ritter, Wilkinson, and Johnston
2004). It may not be obvious who can or should assume the role
of network captain; it may be open to competition among
service providers who each sees advantages in ‘‘owning the
customer relationship.’’ In such situations, the customer may
face ambiguity in determining the best choice of primary ser-
vice provider within the network and may have to deal with
some friction among the competing service providers. Being
the customer’s primary point of contact might provide advan-
tages that lie in steering the customer’s choices, being able to
‘‘cross-sell’’ the customer with its own services, and being able
to manage attributions in service failure incidents. Since net-
works are a source of information as well as service provision
(Podolny 2001; Wilkinson 2008), having multiple providers in
a network offers the customer opportunities to gain different
points of view about the services. Those assuming the ‘‘cap-
tain’’ role also face risks; they may be held responsible for the
performance of others they recommend and they also could
spend uncompensated time to manage relationships between
the customer and other providers.
Second, loyalty to a particular service provider may be
affected by that firm’s ability to control who else is allowed
to participate in its customers’ SDNs. If a customer is
11
constrained to using a particular service contributor that the
customer does not like, that factor could overwhelm any loyalty
that the customer has to the firm. A vivid example was the ini-
tial exclusive use of AT&T, a global provider of cell phone
network services, as the carrier for Apple’s iPhone in the
United States. Regardless of the allure of the signature Apple
offering, if customers were frustrated enough with AT&T’s
service, they would seek alternative smartphone options. In
some circumstances, for example, where technology or fashion
tastes change rapidly, maintaining customer loyalty may rest in
part on managing access to an ever-changing set of comple-
mentary service providers.
Service Orientation
The issue of fit and relations with network partners extends
beyond considerations of processes and information flows to
encompass concerns with how partners deliver service. This
aspect is captured in their service orientation and climate
(Lytle, Hom, and Mokwa 1998). Evidence supports a strong
relationship between firm service orientation and such out-
comes as profit, growth, customer satisfaction, and loyalty
(Schneider, White, and Paul 1998). Positive service climates
reflect a set of distinctive practices supporting employee beha-
viors that sustain superior service. These practices include
issues related to the core focus on the customer experience, hir-
ing, training and rewarding of employees, and the servant lead-
ership view of management (Lytle, Hom, and Mokwa 1998).
In the dyadic view, firms that emphasize a service orienta-
tion in their competitive positioning can largely assure that
their own service encounters deliver on their values. In the
SDN situation, significant service delivery and customer con-
tact may be provided by others, leading to concern about how
well their service orientations match and how well they can
effectively communicate and cooperate (Gittell 2002). Consis-
tency in service orientation thus becomes an important decision
when selecting and being selected by partners (Wilkinson,
Young, and Freytag 2005). For example, WestJet, Canada’s
second-largest airline and a top-20 member of the 2010
Businessweek Customer Service Champs ranking, has faced
challenges in entering partnerships with other airlines. They
had built a strong, loyal customer base through delivering a
combination of economic value and a memorable experience
through highly engaged employees. Besides the technical chal-
lenges of linking processes and information systems with part-
ner airlines, a significant concern was the differences in the
service orientations of potential partners, something that would
be very obvious to its loyal customers.
Process Design Considerations
Methods to analyze and design service processes, such as ser-
vice blueprinting, usually focus on the steps that customers go
through in their transactions with the firm in isolation (e.g., Bit-
ner, Ostrom, and Morgan 2008). Where firms are routinely
involved in only part of the overall service delivery, they also
12
need to account for how their service designs fit with those of
complementary service providers (Patrı́cio et al. 2011; Samp-
son 2012). They have to adapt their service designs to reflect
the range of complementary service providers that customers
bring into their encounters with the firm. If the firm allows cus-
tomers to use many different complementary service providers,
the firm’s internal processes will have to be more flexible to
allow for the variability inherent in having a wider variety of
other providers’ processes and outputs. Adding variety (i.e.,
different fixed service options) and customization (ability to
alter the process or outcomes to suit customer requirements)
to the firm’s processes reduces process efficiency (Anderson,
Fornell, and Rust 1997). The need to mesh with a wider variety
of other service providers is likely to drive up the requisite vari-
ety (Ashby 1958; Wilkinson 2008) within the firm’s own sys-
tems, leading to challenges for controlling the firm’s processes
and maintaining their efficiency.
As identified in Figure 3, a firm may try to gain efficiencies
by limiting the range of allowable complementary service
providers. However, there are trade-offs in constraining cus-
tomers’ choice, and there are limits on the power of firms to
control behavior of other providers in a customer’s SDN. On
one hand, restricting which other firms that customers may use
can have positive impacts by improving efficiency and infor-
mation sharing among the providers. On the other hand, cus-
tomers may view service offerings to be more attractive if
they offer greater flexibility, with more customized treatment
(Chase and Dasu 2001). Constraining customers’ choices about
other allowable providers can have negative consequences,
since perceived constraints tend to reduce motivation and
intentions to use services (Alexandris, Funk, and Pritchard
2011). Each provider firm in an SDN may be seeking to control
the network in its own best interests, which may conflict with
others’ and with the customer’s best interests. Viewing the ser-
vice encounter as a phenomenon that, for customers, extends
beyond the firm’s own boundaries reveals the potential
dilemma facing managers in choosing between restricting cus-
tomer choice of complementary service providers versus facing
the consequences of greater complexity in giving customers
more coprovider options.
The Value of the SDN Perspective
The SDN perspective’s core contribution is that it provides
firms with a way to recognize the potential opportunities in
helping customers coordinate service provider actions to make
the experience more efficient and effective. In addition, it can
help managers to put their firms in a superior strategic position
in a network context by developing relational coordination cap-
abilities and learning how to deliver a superior experience by
effectively managing and participating in their customers’
SDNs. The SDN approach also makes firms aware of the ben-
efits and risks of building stronger relationships with a select
set of complementary providers by restricting customer choice.
Finally, the SDN perspective alerts firms to the competitive
threat posed by other network members.
Journal of Service Research 00(0)
To deliver great customer experiences, firms need to under-
stand the entire constellation of service providers and their
activities that help customers achieve their goals (Patrı́cio
et al. 2011). While recent frameworks have pointed to the
importance of such an understanding (Sampson 2012), experi-
ence research more generally has been criticized for only
addressing the customer experience at the firm level (Patrı́cio
et al. 2011; Verhoef et al. 2009). The SDN perspective reveals
the opportunities that firms have for creating networks of com-
plementary service providers that can simplify the customer’s
task of identifying and coordinating all of the parties needed
to satisfy their requirements. Unlike other ‘‘journey-based’’
approaches, the SDN perspective, by incorporating network
theory, identifies both critical conceptual issues and many of
the challenges to successfully implementing the strategy.
An example case from Strauss (2010) vividly illustrates
some essential conceptual elements and managerial require-
ments for successfully adopting an SDN view and the benefits
from doing so. He compares the traditional service view of
accounting firms dealing with clients in a dyadic fashion to that
of effectively managing in a network-based wealth manage-
ment relationship. ‘‘Effective wealth managers, then, become
highly proficient at relationship management, first building
relationships with their clients in order to fully understand their
unique needs and challenges, and then coordinating the efforts
of their expert teams in order to meet those needs and chal-
lenges. The accounting firm of the future will align itself with
trusted partners in all areas of wealth management to protect
clients from financial risk. A successful transition for account-
ing firms to a wealth management paradigm hinges on paying
strict attention to critical success factors, including having one
partner in charge, creating the right infrastructure, building alli-
ances with advisors in investment management, law and
advanced planning, and ensuring that firm members can readily
access that knowledge.’’
This case illuminates that when there are multiple agencies
involved in the process, as we show in Figure 2, interorganiza-
tional coordination and cooperation are needed in managing
encounters (Alter 1990; Gummesson 2008; Luo, Slotegraaf,
and Pan 2006; Wilhelm 2011). Relational coordination helps
support task integration, since the relationships among net-
worked service providers are important contributors to cus-
tomer outcomes (Gittell 2002). Coordination becomes
increasingly important when service processes are highly inter-
dependent, uncertain, and time constrained. Firms that can take
a lead role (through assets such as infrastructure, alliance-
building skills, or information integration processes) may have
a competitive advantage in securing a customer’s trust and con-
fidence. More generally, a particular customer’s coordination
requirements will vary with the service’s overall complexity,
the coordination provided by the selected set of providers as
part of their regular service, and whether the customer chooses
to use an agent or himself to manage the coordination (see
Figures 5–7).
The SDN approach also surfaces the strategic potential of
forming alliances or networks among complementary service
Tax et al. 13

Table 2. Summary of Important Future Research Questions.

Topic Research questions

Attribution for service
success/failure
Forming SDN member
judgments
Strategic capabilities
Customer cocreation
C2C interactions
Cooperation and
collaboration
 What factors influence customer expectations for SDN coordination?
Systems thinking and the SDN 
Customer relationship
management
 How do customers apportion blame for failure within their SDNs?
 How are attributions of success or failure impacted by the customer’s trust and relationship with a particular
provider within the SDN?
 How do explanations for failure by SDN providers influence the customer’s attributions?
 How is the customer’s satisfaction with the focal firm affected by the performance of other firms within the
customer’s SDN affect?
 How do loosely or tightly coupled SDNs vary with respect to the cross impact of satisfaction assessments of
the networked providers?
 What are the drivers of network evolution?
 How and to what extent can firms influence network evolution?
 Under what conditions do SDN central coordinators emerge and how effective are they?
 How do relations among networked service providers and customers develop overtime?
 What drives customer satisfaction in the resource integrator role?
 What roles can SDN providers play in facilitating the customer’s resource integration requirements?
 How can firms better understand their roles within their customers’ SDNs?
 How can firms design the cocreation process to enhance benefits and reduce costs for customers?
 How can firms better measure and manage customer productivity?
 How can firms assess the influence of C2C interactions on SDN performance?
 How can firms use technology to positively impact C2C activities?
 How do firms build and manage relationships with coproviders who are connected through customers’
SDNs?
What characteristics of SDNs will be able to predict that a firm will be interacting within a complex adaptive
system?
 How can the precepts of complex adaptive systems help guide managers’ choices in designing their services?
 Under what conditions do SDN central coordinators emerge and how effective are they?
 What are the merits of having an SDN ‘‘captain’’ and who should this be?
 What are the implications of participating in an SDN when you are not the captain?

Note. C2C ¼ customer-to-customer; SDN ¼ service delivery network.

providers. This approach can result in stronger ties with regu-
larly interacting network members, making coordination more
effective and routinized. Jones et al. (1998) refer to the develop-
ment of ‘‘polygamous constellations’’ among service firms that
choose to share customers and ‘‘pursue collective advantage’’
through the development of a stable, constrained network. In
other markets, particularly where there is little differentiation
among competing complementary service providers, there may
be less advantage for the firm in restricting customers’ choices
in the makeup of their SDNs. However, the growth in impor-
tance of relational coordination in managing the supplier base
(e.g., Dyer 1996) suggests that similar advantages might be
gained with lateral connections by restricting customers’ SDN
choices in order to develop closer relationships with a con-
strained set of coproviders.
While recent frameworks for the customer experience
recognize the importance of multiple firms contributing to the
journey, they do not account for competition among those par-
ties. The SDN, building from underlying network theory,
recognizes that interfirm relations involve a mix of cooperative
and competitive elements or co-opetition (Wilhelm 2011).
Firms both cooperate to expand the total amount of rewards and
resources available to them and compete over the means to do
this and over the division of rewards and resources (Wilkinson
2008). They often compete to form relationships with counter-
parts such as customers and suppliers that build competitive
advantages in creating value for final customers. This is a crit-
ical element in both the service experience and the customer
relationship management (CRM) that the SDN approach brings
to theory development and practice.
Future Research
The SDN viewpoint challenges conventional approaches to ser-
vice thought; it should stimulate a broad array of research to
develop theory advancing our understanding of this phenom-
enon. Next, we highlight important issues requiring attention.
The section is organized around core themes with a summary
of specific research questions for each topic provided in Table 2.
Attributions for Success and Failure
Understanding how customers make decisions about the cause
of success and failure in the SDN is an important issue in both
attribution research and network research (e.g., Folkes 1984).
SDNs create a more complicated system of explanations when
failures occur (i.e., the scope of each participant’s potential
finger-pointing and rationalization of events) for customers to
sort through and reach a conclusion (Cowley 2005). This pre-
sents a challenge for researchers and managers. Given the
potential for conflicting accounts, an important issue to explore
is the effect of different types of relations among SDN
14
participants, including trust and relationship strength as well as
other relevant attribution predictors in networked service
delivery.
Forming SDN Member Judgments
SDN members may contribute to customer assessments of each
other’s performance. Understanding how consumers form
judgments about the member firms will shed light on the nature
of satisfaction with SDNs as well as about the drivers of service
quality. One of the main thrusts in this line of inquiry is how
satisfaction evaluations of one member are impacted by other
SDN members’ performance, particularly the nature and extent
of the impact. Examining this reciprocal influence would be
particularly insightful in situations where members are
expected to collaborate in delivering the service.
Strategic Capabilities
Network members need to be concerned about developing,
maintaining, and defending their positions (Gadde and Matts-
son 1987; Wilkinson 2008). When a member takes on the role
of coordinator, it may need to build new capabilities to broaden
its service offerings and compete with traditional partners.
Competition to play a more central role in client problem sol-
ving has become increasingly important as the services of less
strategic members become commoditized. Research examining
how the network ‘‘captain’’ is identified is needed to under-
stand this critical issue.
There has been increasing interest in the issue of the
dynamics and evolution of business relations and networks
(Easton et al. 2008), and new methodologies, such as com-
plexity theory and agent-based models offer powerful ways
of advancing our understanding in this domain (Wilkinson,
Marks, and Young 2010). Research exploring the use of
these methods would be valuable in growing the theory in
this area.
Customer Cocreation
Cocreation can have both significant costs and benefits for the
customer and the firm. Traditional network research has
focused on situations where firms form the network associa-
tions and usually take a strategic perspective about how these
associations are created (Ritter and Gemünden 2003). The SDN
approach highlights that network development and manage-
ment may be more complex. Research is needed to understand
the cocreation role customers play in designing and taking on
responsibilities within their SDNs. In the IT literature, some
have posited that the customer will become increasingly
responsible for putting together their service packages with
network-based customer service systems (e.g., Brohman et al.
2009). Research on how firms can better understand managing
in an environment where the customer is the central node in the
network is critical.
Journal of Service Research 00(0)
Customer-to-Customer (C2C) Interactions
The service literature notes that customers influence each oth-
ers’ experience in a variety of ways, both positive and negative
(Baron and Harris 2009). Other customers in the service setting
influence wait times as well as offer assistance and provide
social benefits (Baron and Harris 2009). Since customers can
partially replace service providers in the SDN, they may play
an important function in service delivery. Research on how
firms can monitor and assess the quality of C2C interactions
is important, given the impact on customer outcomes.
Cooperation and Collaboration
Network theory observes the central role of coordination and
collaboration among members in contributing to service out-
comes (Ritter and Gemünden 2003; Wilkinson 2008). Much
research has been conducted in settings where the governance
among members has been formal, contractual, and with an
underlying strategic relationship. These conditions stand in
contrast with situations where the customer is the central node
and the relationships among firms within the customer’s SDN
may range from very weak to stronger ties (Borgatti and Halgin
2011). The study of power, conflict, trust development, cooper-
ation, and communication within more fluid sets of SDNs
would be very helpful in understanding network performance.
Research on collaboration and cooperation has largely been
conducted from the point of view of the organizations involved.
The SDN approach requires a better understanding of this issue
from the customers’ perspectives. Further research on how net-
work firms shape customer expectations about the level and
nature of coordination and cooperation among SDN firms
would be valuable.
Systems Thinking and the SDN
The diversity or commonality of customers’ SDNs is challen-
ging and creates important conditions that firms face. In sys-
tems terms, the ability for contributing service providers to
offer different outcomes for each customer leads to increased
dimensionality or range of possible results at any stage, which
leads to unpredictability in the system’s behavior. When a firm
has wide diversity in its customers’ SDN membership and
where contributing services provide customization, the combi-
nation can quickly lead to high complexity and difficult-to-
predict system behavior. Networked service delivery in such
situations as hospital care (Tan, Wen, and Awad 2005) and eco-
tourism (Schianetz and Kavanagh 2008) has been described in
terms of complex adaptive systems (Holland 1992). Research
bringing the complex adaptive system view into the SDN liter-
ature could prove beneficial in understanding the conditions
and management challenges in particular SDN contexts.
Customer Relationship Management
Another valuable research contribution would be to understand
how relationships form overtime in SDN contexts, with a view
 Tax et al.
to rethinking current CRM models. While we speculate that an
SDN member might emerge as the ‘‘captain,’’ research to test
that assumption and explain how that process unfolds is essen-
tial to informing firms on how to participate in an SDN.
Research also points to the need for firms to maintain owner-
ship of their relationships with customers, especially in situa-
tions where competition is prevalent among SDN members
(Wilkinson 2008). In addition, it is critical to understand CRM
from the position of firms not playing the coordinating role, as
they are in a weaker position to grow their relationships with
valuable customers and are more susceptible to being replaced
in the network.
Conclusion
Recent articles have made the case that customer experiences
need to account for forces outside the firm that influence the
traditional dyadic encounter perspective that has driven service
theory development. The SDN perspective provides a concep-
tual basis for integrating network theory into the service
encounter and the customer experience and journey literature.
Taking the customer’s view and seeing networked service
delivery from this vantage point provides a more realistic way
of portraying the service encounter in a world of fragmented,
interconnected service delivery. Doing so affords service pro-
viders insights into critical design and strategy decisions. One
key decision is how to build relationships with complementary
firms to deliver a more efficient and enjoyable customer jour-
ney. In doing so, gaining customers’ trust and confidence likely
depends upon the firm’s concern for relational coordination
and a harmonized approach to how its network operates. This
may require firms to develop new capabilities to capitalize
on the opportunities while at the same time considering that
network partners represent a new form of competition.
The SDN also provides a different perspective on many core
service management activities. Our understanding of service
quality, CRM, process design, service recovery, and service
orientation are all impacted by taking a network perspective
of customer-firm interactions. In addition, the areas of future
research that we highlight point to how many of the founda-
tional principles of service management emanating from the
dyadic view may benefit from a more realistic network
viewpoint.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to
the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, author-
AQ 7 ship, and/or publication of this article.
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17
Author Biographies
Stephen S. Tax (PhD, Arizona State University) is the professor of
service management and Francis G. Winspear Scholar at the Peter
B. Gustavson School of Business, University of Victoria, Canada. His
research focuses on service networks, service design, customer perfor-
mance, and service failure and recovery. He has published articles in
Journal of Marketing, Journal of Marketing Research, Journal of
Consumer Psychology, Journal of Operations Management, Sloan
Management Review, Journal of Retailing, and others. His research
on service recovery has received the best paper award from the AMA
Services Special Interest Group and the Richard Beckhard Prize from
Sloan Management Review.
David McCutcheon (PhD, University of Western Ontario) is an asso-
ciate professor of operations management at the Peter B. Gustavson
School of Business, University of Victoria, Canada. He has researched
in the areas of technology management and supply chain management
and published articles in the Journal of Operations Management,
Sloan Management Review, International Journal of Operations and
Production Management, and others.
Ian F. Wilkinson (PhD, University of New South Wales, Australia)
is an honorary professor of marketing at the University of Sydney
and a visiting professor in the Department of Entrepreneurship and
Relationship Management at the University of Southern Denmark.
His research focuses on the development, evolution, and manage-
ment of interfirm relations and networks in domestic and interna-
tional markets. He has published articles in The European Journal
of Marketing, Journal of the Academy of Marketing Science, Journal
of Applied Psychology, Journal of Business Research, Journal of
International Marketing, Journal of Retailing and others. His books
include Business Relating Business: Managing Organisational Rela-
tions and Networks.