In hospitality industry, sustaining service innovation is an essential means to maintain competitive advantage and expand current markets. And the useful innovation should be able to meet customers’ demand. But it is difficult for service providers to guarantee an error-free condition on the process of providing services. As long as errors occur, it can result in customer complaints. However, customer complaints not only deliver their needs directly but also become a good source of innovation which contribute to the development of new service.
However, only a few of the previous research on service innovation field focus on the innovation mechanism from the viewpoints of customer complaints. This study adopts the method of case study to carry out in-depth interviews and then collect subordinate data, trying to understand how service providers transform customer complaints into successful innovation services.
The result of this study shows that service providers can obtain and learn new things by gathering and applying customer’s demand information to improve their services. On the other hand, utilizing information systems to help solve customers’ problems and co-create values with customers can transform customer complaints into an effective operating pattern and obtain the long-term competition edge and benefit.
