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Beyond virtuality: From engagement platforms to engagement ecosystems

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 Managing Service Quality
Beyond virtuality: from engagement platforms to engagement ecosystems
Christoph F. Breidbach Roderick Brodie Linda Hollebeek
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MSQ
24,6
Beyond virtuality: from
engagement platforms to
engagement ecosystems
592 Christoph F. Breidbach
Department of Computing and Information Systems,
Received 12 August 2013
Revised 26 January 2014 University of Melbourne, Melbourne, Australia
23 April 2014 Roderick Brodie
Accepted 13 June 2014
Department of Marketing, The University of Auckland Business School,
Auckland, New Zealand, and
Linda Hollebeek
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Department of Marketing, University of Waikato, Hamilton, New Zealand

Abstract
Purpose – Understanding the role and implications of information and communication technology
(ICT) in service is the key research priority for service science and the management of service quality.
The purpose of this paper is to address this priority by providing insights into the role of “engagement
platforms” (EPs), physical or virtual customer touch points where actors exchange resources and
co-create value. Despite an emerging body of literature that emphasizes the fit between engagement
and technology-enabled service contexts, EPs remain ill-defined. Specifically, little is known about
the particular types of EPs, their characteristics, and implications for the performance of service
ecosystems and managing service quality.
Design/methodology/approach – By drawing on two illustrative case studies, the authors
investigate and theorize about the characteristics and dynamics of EPs in virtual/physical contexts,
and identify if, how and to what extent configurations of EPs may enhance resource exchange within
and across service ecosystems.
Findings – By building on emerging research at the service/engagement interface, the paper
introduces the notion of the “engagement ecosystem,” as a configuration of individual, mutually
dependent EPs that represent specific interactivity-facilitative loci. The paper explicates the relevance
of the model and highlight opportunities for future research in this emerging field of inquiry.
Research limitations/implications – The work addresses the call for research at the intersection
of ICT and service science through development and application of the engagement ecosystem
concept. The theorizing process draws on two illustrative case studies, and thereby provides a
theoretical contribution and foundation for future research in this emerging area.
Practical implications – The authors guide managerial decision-making regarding the
implementation, adoption, and utilization of engagement ecosystems. Furthermore, the nature of
“engagement” as a bridging concept implies that the work can help managers to operationalize
service-centric thinking.
Originality/value – By showing how individual EPs form engagement ecosystems, the paper
bridges theory and practice, and offers new insight in the realm of practical application of the
S-D logic.
Keywords Engagement ecosystem, Service science, Engagement platform, IT in service, S-D logic
Paper type Case study

Managing Service Quality

Vol. 24 No. 6, 2014 The authors gratefully acknowledge the feedback that the authors received from the participants
pp. 592-611 at the 2013 Naples Forum on Service. The authors also thank the Associate Editors Evert
r Emerald Group Publishing Limited
0960-4529 Gummesson, Cristina Mele and Francesco Polese, as well as the Co-Editor Marianna Sigala and
DOI 10.1108/MSQ-08-2013-0158 two anonymous reviewers for insightful comments and suggestions during the review process.
 The more high technology is around us, the more the need for human touch (Naisbitt, 1982, Engagement
p. 52).
platforms to
engagement
1. Introduction
Improving our understanding of the role and implications of information and
ecosystems
communication technologies (ICTs) in service has been identified as the top research
priority for the progression of service science and managing service quality 593
(Chesbrough and Spohrer, 2006; Ostrom et al., 2010). Information Systems (IS) and
service scholars alike called for research at the ICT/service interface, to establish
cross-fertilization between these two rapidly evolving fields (Meyronin, 2004; Raj and
Sambamurthy, 2006; Hyötyläinen and Möller, 2007). For example, Huang and Rust
(2013) drew attention to the information-intensive nature of ICT-related service:
IT-related service is information-intensive. The ability to communicate (firm-to-customer,
firm-to-firm, and customer-to-customer) anytime, anywhere, and to anyone, is significantly
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facilitated by the advance of IT (p. 1).

Research addressing the role of ICT in service should therefore explore the rapidly
changing nature and dynamics pertaining to specific firm-to-customer, firm-to-firm,
and customer-to-customer interactions (Huang and Rust, 2013). In the last decade,
“traditional” services, such as financial- and retail-services, which relied on direct
face-to-face interactions with customers, shifted or expanded their customer-firm
interactions from physical, into virtual realms (e.g. Tesco’s traditional bricks-and-mortar
stores supplemented with emerging virtual Tesco retail platforms); thus generating new
online self-service environments (Bitner et al., 2002; Campbell et al., 2011).
Today, a reverse and seemingly paradoxical trend can been observed as digital
service providers begin to expand their previously entirely virtual customer-firm
interactions, into the realm of additional, physical environments. To illustrate,
Microsoft and, according to some analysts, Google, are in the process of introducing
bricks-and-mortar retail outlets complementing these brands’ otherwise exclusively
virtual presence (e.g. Efrati, 2013). This observation may, in part, be explained with
reference to Burke’s (2002) earlier work, which suggests that customers, typically, look
for distinct benefits from physical, vs virtual (online), stores. Burke’s (2002) work,
however, does not provide any insights into differences between previous shifts from
physical to virtual or, as we are beginning to observe now, virtual-to-physical
movements. Dahlström and Edelman (2013) somewhat address this issue by predicting
that customer experiences spanning physical and virtual environments will become the
new norm. This particular shift is likely to result in the formation of new, potentially
unique customer experiences and behaviors; thus requiring the development of new
conceptual models and lenses that allow us to understand these novel dynamics.
Although scholars provided substantial insights into the previous transition of
service from physical to virtual environments (e.g. Davis et al., 1999), research
exploring the shift from entirely virtual, to integrative virtual/physical environments is
lacking to date. Thus, the objective of this paper is to examine this shift through the
concept of “engagement platforms” (EPs) (Sawhney et al., 2005; Ramaswamy, 2009). The
engagement concept in general, and customer engagement, in particular, is considered
most suitable when fostering an enhanced understanding of focal customer-firm
interactions within ICT-mediated environments (Sawhney et al., 2005; Bogatin, 2006).
Customer engagement reflects an actor’s cognitive, emotional and behavioral investments
in focal interactive experiences (Brodie et al., 2011). Based on Sawhney et al. (2005) and
 MSQ Ramaswamy (2009), we define “EPs” as physical or virtual touch points designed to
24,6 provide structural support for the exchange and integration of resources, and thereby co-
creation of value between actors in a service ecosystem. As such, EPs are centered on a
focal engagement object and an attempt to enhance an actor’s ability to experience
engagement with such focal object.
Despite Brodie et al.’s (2013) call for further research, both EPs and the application
594 of the customer engagement concept in ICT-driven contexts, remain ill-defined, and
empirical contributions in this area are limited to date. We posit that exploring
the shift from entirely virtual, to integrative virtual/physical touch-points through the
conceptual lens of EPs will contribute to the development of an enhanced, more holistic
understanding of both EPs and integrative virtual/physical customer experiences.
This understanding will help managers to operationalize service-centric thinking, and
contribute to the effective management of service experiences. Within this work, we
therefore address the call for more research at the ICT/service interface by focussing on
the nature and dynamics of firm-to-customer interactions that occur within multiple
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integrative physical/virtual contexts. Specifically, we explore why service firms

shift from purely virtual EPs to integrative virtual/physical configurations, and
attempt to understand what the key characteristics and dynamics typifying such
configurations are.
Our study contributes to the extant literature as follows. By drawing on two
illustrative case studies, we develop inferences (Siggelkov, 2007), which can be
considered a prerequisite for further theory-building and, ultimately, theory testing
(Eisenhardt and Graebner, 2007; Siggelkov, 2007). First, we present insights drawn
from cases in the digital service industry, which highlight the changing nature of
physical/virtual customer-firm interactions. Second, contrary to previous work that
focussed on single EPs as the unit of analysis, we extend our current understanding of
this domain by exploring the concept of the engagement ecosystem, and introduce it
into the nascent literature. Specifically, our framework suggests that, by moving
beyond a singular perspective, and toward a holistic understanding of engagement
ecosystems that includes all actor touch-points, we are able to explain if, how and why
individual EPs may enhance resource exchange and integration within and across
service ecosystems. Specifically, we draw, and contribute to, the discourse on service
ecosystems that has recently become central in the theoretical discussions within S-D
logic (Vargo and Lusch, 2009). Finally, we define the limitations of our study and
delineate resulting implications for future research that conclude this paper.

2. Literature review
Engagement in service systems
The “engagement” concept has been subject to scholarly scrutiny across a wide range
of disciplines, including organizational behavior (Saks, 2006), sociology ( Jennings
and Zeitner, 2003), and marketing (Heath, 2007; Bowden, 2009). However, despite an
increasing number of contributions, which suggests the existence of multiple
engagement sub-concepts, including “customer engagement,” “brand engagement” or
“media engagement” (Gambetti and Graffigna, 2010), the concept, until recently, lacked
a clear definition in the marketing and service literatures (Van Doorn et al., 2010;
Brodie et al., 2011).
A number of authors refer to customer engagement as reflective of an individual’s
focal psychological state (Patterson et al., 2006; Mollen and Wilson, 2010; Vivek, 2009),
or by particular customer behavior outcomes, including commitment, loyalty, or purchase
 intent (Resnick, 2001; Bowden, 2009; Van Doorn et al., 2010). Given our focus on EPs that Engagement
intend to facilitate physical and virtual customer-to-firm or customer-to-customer platforms to
interactions in service ecosystems, this study is centered on the specific sub-concept of
“customer engagement.” Table I provides an overview of selected “customer engagement” engagement
definitions. ecosystems
The notion of “engagement subjects” and “engagement objects” represents a
conceptually suitable lens through which to view the present research, as these concepts 595
reflect what Brodie et al. (2011, p. 259) identify as the key hallmark characterizing
“engagement,” that is; “[The undertaking of specific] interactive experiences [between]
a focal agent [i.e. “engagement subject;” e.g. a customer] and object [e.g. a brand, product
or organization] within specific service relationships” and systems.
Brodie et al. (2011) recognize that customer engagement occurs within a dynamic,
iterative process of service relationships that exist to co-create value. From a S-D
logic perspective, Lusch and Vargo (2010) posit that focal interactive, co-creative
experiences may be interpreted as particular forms of “engaging.” As such,
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engagement reflects interactivity extending beyond “[individual] transactions” (Van

Doorn et al., 2010, p. 254; Marketing Science Institute (MSI), 2010); thus suggesting
that further research into engagement from an S-D logic perspective, as adopted in
the present study, is necessary. Most importantly, the customer engagement concept
is considered particularly applicable when fostering an enhanced understanding of
focal customer-firm or customer-to-customer interactions within ICT-mediated
environments (Sawhney et al., 2005; Bogatin, 2006). Mollen and Wilson (2010, p. 1),
for instance, predict the emergence of engagement as the “definitive umbrella term”

Author(s) “Customer Engagement” definition Key hallmark

Kumar et al. A customer’s active interactions with a firm, with Active interaction
(2010, p. 297) prospects and with other customers, whether they
are transactional or non-transactional in nature
Van Doorn et al. A customer’s behavioral manifestations that have a Beyond transactions
(2010, p. 254) brand or firm focus, beyond purchase, resulting from
motivational drivers
Vivek (2009, p. 7) The intensity of an individual’s participation and Varying degrees of
connection with the organization’s offerings and participation
activities initiated by either the customer or the
organization
Patterson et al. The level of a customer’s physical, cognitive and Service focus
(2006, p. 1) emotional presence in their relationship with a
service organization
Brodie et al. A psychological state that occurs by virtue of Interactive customer
(2011, p. 259) interactive, co-creative customer experiences with a experience
focal agent/object (e.g. a brand) in particular service
relationships
Mollen and Wilson A cognitive and affective commitment to an active Cognitive and
(2010, p. 919) relationship with the brand, as personified by the affective customer
web site commitment
Bowden (2009, p. 63) A psychological process that models the underlying Psychological
mechanisms by which customer loyalty forms for process generating
new customers of a service brand, as well as the customer loyalty Table I.
mechanisms by which loyalty may be maintained for “Customer engagement”
repeat purchase customers of a service brand definitions
 MSQ for virtual interactions. Early work conducted in the context of online consumer
24,6 experiences (Mollen and Wilson, 2010), or product innovation drawing on focal
customer-to-customer interactions (Sawhney et al., 2005) further supports the
relevance of this emerging field of inquiry.

EPs
596 “EPs” are “purpose-built, ICT-enabled environments containing artefacts, interfaces,
processes and people permitting organizations to co-create value with their customers”
(Ramaswamy, 2008, 2009; Ramaswamy and Gouillart, 2010). By differentiating
between digital EPs, processes, tools, and physical spaces, Nenonen et al. (2012)
provide a more inclusive definition, and argue that understanding EPs is crucial when
managing co-creation processes. However, and despite Nenonen et al.’s (2012) extension
of EPs beyond virtual realms (i.e. into physical environments), our understanding of
EPs is limited to-date. For example, Ramaswamy and Gouillart (2010) describe, rather
than define, EPs by focussing on their perceived characteristics of transparency,
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access, dialogue, and reflexivity. First, “transparency” implies that an actor’s

interactions with a particular EP are visible to a wider audience engaging in specific
co-creation processes (e.g. on specific social networking sites). Second, “accessibility”
enables actors to integrate resources into the platform, for example, by adding or
sharing content; thereby modifying the nature and characteristics of the EP itself.
As such, EPs are designed to facilitate dialogue among actors, since the exchange of
resources is considered a prerequisite for value co-creation (Prahalad and Ramaswamy,
2004; Ramaswamy, 2008, 2009; Ramaswamy and Gouillart, 2010). Third, “reflexivity”
implies an EP is capable of adapting to changes from within.
Within the marketing literature, Hennig-Thurau et al. (2004) identify a set of factors
motivating actors to engage within virtual brand communities – a specific type of EP.
Their work supports Oldenburg (1999) and Figallo’s (1998) findings by emphasizing
social benefits like trust and commitment that individual actors may experience here,
and that also represent key consequences of customer engagement (Brodie et al., 2011).
Overall, despite a growing scholarly interest in EPs and calls for further research in
this emerging area, empirical contributions remain limited, which may be a direct
result of the lacking systematic conceptualization of EPs to date.
In this work, we define “EPs” as “physical or virtual touch points designed to
provide structural support for the exchange and integration of resources, and thereby
co-creation of value, between actors in a service system. EPs are centered on a focal
engagement object and attempt to enhance an actor’s ability to experience engagement
with such focal object”. Of particular interest to this study is the emerging divide
between physical and virtual EPs that Nenonen et al. (2012) already highlighted, and
which led to the emergence of new constellations of virtual and physical EPs.

From physical to virtual EPs – and beyond

American futurist and visionary John Naisbitt (1982, p. 52) foresaw in the 1980s that
“the more high technology [is] around us, the more the need for [a] human touch.” Less
than two decades later, as the internet became available to the majority of the
population in industrialized nations, the service landscape transformed tremendously.
Up until this point, the adoption of ICTs in service had been limited, and most service
firms followed the principle of “high touch, low tech” (Bitner et al., 2000, p. 138). This
implied that interactions between human service providers and customers occurred via
interpersonal, physical, interfaces only.
 Researchers since acknowledged that the advancement, ubiquity, and sophistication Engagement
of modern ICTs transformed the nature and scope, not only of focal customer-to-firm, platforms to
but also customer-to-customer interactions (Parasuraman, 2000; Zeithaml et al., 2002).
Specifically, the shift toward technology-mediated customer-to-firm interfaces has engagement
been viewed not only to be prevalent, but likely inevitable; and is expected to continue ecosystems
to influence the ways in which actors in service systems exchange and integrate
resources (Froehle, 2006; Froehle and Roth, 2004). Prominent examples where 597
ICTs have contributed to “diminish[ing] personal, human-to-human interaction in
service” (Walker and Johnson, 2004, p. 564) include online banking and shopping.
Here, customers independently perform tasks through a service provider’s
ICT infrastructure, for example via specific web-based interfaces (Bitner et al., 2002;
Campbell et al., 2011).
While the IS literature assumed ICTs would be of an inherently transformative and
evolutionary nature (Orlikowski, 2000), a new generation of businesses emerged at the
turn of the twenty-first century. Based on their online presence, companies run by
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digital natives (Vondanovich et al., 2010) including Google, Facebook, and eBay, were
unprecedented at the time of their inception; that is, they did not experience, or require,
any technology-induced shift from a physical, bricks-and-mortar, toward a virtual
customer interface that traditional service firms, including Walmart or retail banks,
undertook in order to remain competitive within an evolving business landscape (Lee
and Park, 2009). Surprisingly though, these digital natives are now beginning to
establish an organizational presence in the physical world.
Service researchers long speculated whether traditional face-to-face service interactions
would be replaced by technology-based service (Edvardsson et al., 2010). However,
opposing trends emerge, which challenge the prevailing perception and understanding of
the service landscape once again. Today, as ICTs have become ubiquitous, we witness
Naisbitt’s (1982) prediction from almost 30 years ago. Specifically, in the next section, we
present two illustrative cases that exemplify the identified shift from a purely virtual, to an
integrative virtual/physical environment, which we and further investigate through the
conceptual lens of EPs.

3. Illustrative case studies on transitioning EPs

Research objective and methodology
The objectives of this study are to: first, examine the changing nature of physical/
virtual customer-firm interactions, and to provide empirical insights into the factors
driving this phenomenon. Specifically, we ask why a digital service provider would
shift from purely virtual EPs to integrative virtual/physical configurations. Second, we
address the identified research gaps at the ICT/service interface by focussing on EPs
more specifically. This approach allows us to, third, extend the current perspective on
singular EPs, and to explore the key characteristics and dynamics of such emerging
integrative configurations of multiple EPs in virtual/physical contexts. As the
performance of any service systems is contingent on its ability to exchange resources
and to co-create value (Prahalad and Ramaswamy, 2004; Spohrer and Maglio, 2010), it
is important to understand if, how and why individual EPs may enhance resource
exchange and integration within service systems and across service ecosystems (Vargo
and Lusch, 2009). Providing these insights is the final objective of this study.
Extending Sawhney et al. (2005), we rely on two illustrative case-studies for our
inquiry (Eisenhardt, 1989; Miles and Huberman, 1994). This approach enables us to
develop inferences (Siggelkov, 2007), and to suggest avenues for further theory-building
 MSQ and testing (Eisenhardt and Graebner, 2007). Case research has been recommended to
24,6 generate theoretical insights when relatively “little is known about a phenomenon”
(Eisenhardt, 1989, p. 546), as is in the present context. We adopt a multiple, rather than
a single case approach, based on the expected enhanced validity of the findings, relative
to that attained under the adoption of a single case study (Yin, 2011).
Using publicly available sources that address the specific cases of Microsoft and
598 Google, we obtained secondary data such as news articles, investor statements,
and industry publications. We selected these particular organizations for inclusion in
the study, based on their respective industry leadership positions, as well as their
alleged (i.e. Google), or realized (i.e. Microsoft) status in terms of having expanded from
a purely virtual, to an integrative virtual/physical EP approach; thus directly tying in
with our stated research objective and questions. Utilization of publicly available data
sources was necessary because, as we conducted this study in the spring of 2013,
industry speculations about Google’s plan to introduce physical retail outlets had just
emerged; yet these remained unconfirmed. Hence, interviewing or direct observation of
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Google store employees, therefore, was not an option. Nevertheless, the exclusive
deployment of secondary data sources in qualitative case-based research is known to
generate insights just as rich and valid as alternate data collection methods, like
interviews or observations (Bowen, 2009; Yin, 2011). Specifically, we appointed a
primary researcher who performed the initial analysis, with support roles played by
the other two authors.
Finally, we adopted Bowen’s (2009) procedure to guide our document analysis,
which helped us to identify themes and patterns in the data; that is, following the
principles underlying thematic analysis (Guest, 2012; Boyatzis, 1998). In contrast to
pure content analysis, thematic analysis incorporates the entire conversation as the
potential unit of analysis (Thomsen et al., 1998). The analysis was conducted in two
analytical stages, using Miles and Huberman’s (1994) coding approach as a guideline.
First, we utilized descriptive codes to segment the text into individual building blocks,
which varied in length from several words to paragraphs. Second, using interpretive
codes, we summarized individual descriptive codes into clusters. This iterative process
led to the emergence of individual themes. Though interpretive, this study culminates
in a conceptual framework that describes the nature and dynamics of individual EP
archetypes that, holistically, form a larger engagement ecosystem. The following
sections outline the case studies of Microsoft and Google, and provide the necessary
description of the domain (Yin, 2011), before we discuss our findings in the context of
the nascent literature.

Google case
Arguably the most prolific digital service provider of the twenty-first century, Google
revolutionized the market for online searching and advertising. To this day, advertising
remains a crucial revenue source, with Google reporting a 31 percent increase of its
gross revenues to US$13.97 billion in the first quarter of 2013 (Patel, 2013). Google
operates a variety of EPs that drive its revenues. While the company’s sole EP was its
search engine when founded on September 4, 1998, the firm substantially expanded
during the last decade, and introduced a variety of new services to its portfolio,
including web-based e-mail (i.e. Gmail), cloud-based document management (i.e.
Google Drive), and maps (i.e. Google Maps).
After introducing its “Android” operating system for mobile phones and tablets, in
addition to its personal computer operating system “Chrome,” Google purchased
 Motorola Mobility to produce its own technical devices, most notably the Android Engagement
smartphones and tablets, as well as the Chrome Book, a low-cost laptop. Google platforms to
fundamentally strives to control its customer’s experience by selling the necessary
software applications through its “Google Apps” store. Moreover, regardless of the engagement
specific technical device used, Google provides prospective customers with ecosystems
the opportunity to utilize its free focal web services, including Gmail, video sharing
via its YouTube platform, and social networking using Googleþ . 599
The only EP that Google has yet to capitalize on is that of physical retail stores.
In February 2013, several technology blogs, as well as the public media, announced
Google’s (alleged) plan to launch what was then referred to as “Google Stores” (Efrati,
2013). While the organization initially denied its intention to introduce such retail
outlets, the blogosphere remained undecided as to whether these claims held truth.
At the time, Google had already presented its technical devices (e.g. laptops and
smartphones) in temporary physical pop-up stores, which were based at, for example,
airports and through its own Chrome Zones; that is, stores-within-a-store run in
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co-operation with retail chains Best Buy in the USA, and PC World in the UK. However,
this store-within-a-store model may be obsolete if Google opens its own stores, as
alleged. In the current model, all financial transactions are managed by Best Buy and
PC World’s employees who, despite being trained by Google, operate based on
pre-defined sales targets. Conversely, employees in future Google stores could also
perform the role of educators, rather than act solely as salespeople.
According to the LA Times, the introduction of “Google Glass,” a revolutionary
wearable set of digital glasses, which blur the boundaries between the virtual and
physical realities for its user, represents a key driver behind Google’s alleged decision
to open retail stores (Gates, 2013). Google commented to the LA Times that the
revolutionary nature of “Google Glass,” combined with a relatively high retail price (i.e.
US$1,500), requires potential customers to experience the device in a physical, rather
than virtual, environment. The notion of “try before you buy,” is easier implemented in
physical (relative to purely virtual) retail outlets, and has already been a recipe for
success for other technology firms such as Apple Computers. Google, therefore,
would not be the first digital dirm that materializes its existence by transitioning
and expanding from a purely virtual, to a physical domain. Microsoft, the
Seattle-based software conglomerate already operates its own retail outlets, as
outlined in the next case.

Microsoft case
Microsoft, the Seattle, WA based firm that pioneered the development of operating
systems for personal computers and personal computer software, including Microsoft
Windows, Microsoft Office and the Internet Explorer web browser, already undertook
a transformation not dissimilar to that, which Google is allegedly aspiring to. From
1999 until 2001, Microsoft experimented with physical retail outlets, then called
“microsoftSF,” and operated by Sony Retail in San Francisco, CA. Though initially
unsuccessful, after a transformative period in the mid-2000s, Microsoft opened its first
retail outlet, the “Microsoft Store” in Scottsdale, AZ on October 22, 2009 (Slivka, 2009),
while launching its new Windows 7 operating system.
Microsoft attempted to establish a further foothold in the retail sector by launching
its Azure Services Platform, which represents the company’s entry into the cloud
computing market for Windows in 2008 (Fried, 2008). As of April 2013, the organization
operates approximately 40 stores within the USA and Canada. The Microsoft Store is
 MSQ a chain of bricks-and-mortar retail stores that are complemented by an online shopping
24,6 site owned and operated by Microsoft. The stores aim to “improve the PC and Microsoft
retail purchase experience for consumers worldwide and help consumers make more
informed decisions about their PC and software purchases” (Microsoft, 2009). Though
often criticized for their similarity to Apple stores, Microsoft’s stores are a physical retail
platform offering consumer electronics, including the Xbox, Microsoft software
600 packages, as well as Windows phones and other Microsoft devices, including the
Microsoft “Surface” tablets. Specifically, Surface was the first major initiative by
Microsoft to integrate its Windows operating system with its own hardware (Sullivan,
2012), an approach similar to Google’s Android operating system, smartphones, tablets,
and laptops.
In Microsoft stores, potential customers are able to use and experience the various
technological products in a physical environment, and can also interact with Technical
Advisors and Specialists; that is, Microsoft staff members offering training with
Microsoft products, personal shopping experiences, and troubleshooting advice.
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Specifically, such assistance is available on a walk-in basis, or by appointment. Just like

Google, Microsoft engages with its customers through a variety of EPs. However,
unlike Google, Microsoft’s business model is not based on advertising, but linked to a
retail and licensing model where revenues are generated through selling hardware and
software (Microsoft, 2012).

4. Conceptual development, discussion, and implications

Conceptual development and discussion
By drawing on the cases of Google and Microsoft, we explore how these organizations
expand their purely virtual EPs to integrative virtual/physical configurations. As such,
our investigation aimed at identifying the key characteristics and dynamics of these
configurations of EPs, and investigated if, how and to what extent individual EPs may
enhance resource exchange within and across service systems. Each EP provides
physical or virtual touch points which, collectively, are designed to improve the
performance of service systems by enhancing resources exchange and integration
across focal customer-firm, as well as customer-customer, networks. Understanding
the relationship between a service system’s performance and its individual EPs is
crucial, as such knowledge could augment a service firm’s ability to facilitate specific
co-creative processes, and thus manage the quality of the service experience (Sigala,
2004; Mele and Polese, 2011).
In this study, we expand Ramaswamy’s (2008) definition of EPs, which focusses on
specific, singular ICT-enabled customer touch-points, as well as Nenonen et al.’s (2012)
conceptualization, which differentiates between individual digital EPs, processes,
tools, and physical spaces. In contrast, we suggest that enhanced insights can be
generated by moving beyond a singular perspective on individual EPs, and introduce a
holistic understanding of these configurations of actor touch points, through the
concept of engagement ecosystems. Figure 1 conceptualizes an engagement ecosystem
that, by utilizing the Google case for illustrative purposes, explains the characteristics
of its individual EPs.
We define engagement ecosystems as a dynamic constellation of mutually dependent
EPs that, individually, represent specific interactivity-facilitative loci. Put differently,
engagement ecosystems are constellations of physical and virtual EPs used by a focal
firm to enable interactions with, as well as among, its customers. An engagement
ecosystem may alter in its composition over time, but always aims at enhancing customer
 Engagement

resource exchange)
platforms to
Transactional
(Temporary
Supplying: Enabling: engagement
Google Store Google Apps
Marketplace ecosystems
601
Purpose
of EP
resource exchange)
Interactional
(Continuous

Instrument:
Operating:
Google Glass,
Gmail, Google+, Figure 1.
Android Phone,
Chromebook
Youtube Conceptual framework
of Google’s engagement
Downloaded by 178.18.19.221 At 09:21 04 November 2015 (PT)

ecosystem (for
Illustrative Purposes)
Physical State of EP Virtual

engagement, while being embedded in a wider service ecosystem (Vargo and Lusch,
2009). Engagement ecosystems allow us to gain holistic insights into the specific
co-creative interactions between actors in service systems across all touch points, by
considering the nature of each focal EP (i.e. physical or virtual interface), as well as the
purpose of each EP. Specifically, we differentiate between interactional (i.e. continuous), vs
transactional (i.e. temporary or instantaneous) resource exchange within each service
ecosystem as the relevant factors. This approach allows us to identify four EP archetypes,
namely operating, instrumental, enabling, and supplying platforms, and to explain their
role, characteristics and implications for service system performance. We provide an
overview of each of these EP archetypes and their key characteristics in Table II.
The fundamental role of operating EPs is to enable service firms to co-create value
with their customers; that is, any interaction intended to generate revenue for the
service provider, while co-creating a perceived benefit with customers during
customer-to-firm, or customer-to-customer interactions. In the case of Google,
operating EPs like Gmail or YouTube are entirely virtual, highly interactive, and
designed to enable a continuous exchange and integration of resources within actor
networks, while revenues are generated through advertising or customer subscriptions.
To illustrate, Cowan (2013) reports on the expansion of the Gmail widget, which
enables the inclusion of, for example, brands, thereby making it easier for customers to
interact with firms. Depending on the service provider’s revenue model, the operating
EP can also shift into the physical realm, yet remain highly interactional through
customer-firm or customer-to-customer interactions. For example, Microsoft’s physical
and virtual stores represent the company’s operating platform where revenues are
generated through software and hardware sales. On October 24, 2013, Microsoft
announced record revenues of $18.53 billion for the quarter ended September 30, 2013.
Chief Executive Officer Steve Ballmer reported that Microsoft’s “devices and services
transformation is progressing and we are launching a wide range of compelling [y]
experiences this fall,” thereby further emphasizing the engagement ecosystem strategy
undertaken by the firm (Microsoft, 2013).
Instrumental EPs, on the contrary, represent a prerequisite that enable customers
to access a service provider’s operating EP. These physical platforms are designed
 MSQ Specific case-based
24,6 EP Archetype Definition Key characteristics illustrations

Operating EP Operating EPs enable Facilitates interactivity Google: Gmail, YouTube

(OEP) firms to generate and value co-creation Microsoft: Virtual retail
revenues by virtue of with customers stores
co-creating a perceived Designed to generate
602 benefit during revenue for the firm
customer-to-firm, and/or through continuous
customer-to-customer exchange of resources
interactions May comprise specific
online (virtual) and/or
offline (physical)
environments
Instrumental EP Instrumental EPs enable Physical EP that needs Google: Chromebook
(IEP) customer to access a to be integrated with (laptop), Nexus (tablet),
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service provider’s OEP. applications/software to Glass (headset)

As such, possession or experience the IEP’s full Microsoft: Surface Pro
access to an IEP is a potential (tablet), Xbox (home
prerequisite for Designed to facilitate the entertainment),
customers intending to continuous exchange of Windows phone
co-create value with the resources within (smart phone)
firm customer-to-customer,
or customer-firm
Enabling EP Enabling EPs are Virtual EP that supports Google: App
(EEP) designed to facilitate OEP performance Marketplace
transactional customer- (e.g. allows customer to Microsoft:
firm exchanges, and are access specific windowsstore.com
typically accessed by applications/software)
customers through IEPs
Supplying EP Supplying EPs provide Facilitate the firm’s Google: Prospective
(SEP) a touch-point for transition from a purely Google Store
customer-firm and virtual, to more Microsoft: Physical
customer-to-customer integrative virtual/ retail stores (when
interactions, in order to physical realms first launched)
Table II. shape prospective Experiential and
Overview of EP customers’ experiences interactive (resource
archetypes: definitions with IEPs exchange possible but
and key characteristics not necessary)

to facilitate the continuous exchange of resources, either within specific customer-

to-customer, or customer-firm networks. However, instrumental EPs, such as Microsoft
and Google’s smartphones, tablets, or other devices need to be integrated with
applications or software enabling users to experience the full technical potential of a
technical device or instrumental EP. To illustrate, Newman (2012) reports on Google
Glass, a small computer in the shape of a pair of glasses containing an optical head
mounted display, which displays information in a smartphone-like hands free format
to the user, and can communicate via voice commands, with a range of new and
existing Google services (i.e. its operating EPs). Due to the revolutionary nature of the
device, Google Glass is suspected to be in high demand by customers but will only
function within Google’s infrastructure (i.e. Google’s engagement ecosystem), and be
dependent on applications or software provided by Google. These software application
may be available through a service provider’s enabling EP.
 Google’s “App Marketplace” is an example for an enabling EP, a virtual platform Engagement
designed for transactional, and relatively transient, customer-firm exchanges. The platforms to
enabling EP, therefore, further supports the performance of the operational EP, and
allows a service provider to ensure that individual customers can access applications, engagement
for example for Google Glass, in the appropriate form and quality. Finally, supplying ecosystems
EPs, such as the physical Microsoft Store, not only facilitate the transition of the
service provider from a purely virtual, to a more integrative virtual/physical realm; but 603
provide a touch-point for customer-firm and customer-to-customer interactions that
shape prospective customers’ experiences with instrumental EPs, like Microsoft’s
Xbox One. Supplying EPs may also evolve into operating EPs once established in the
marketplace, as indicated in Table II. Efrati (2013) reports that inside Google, the idea
of opening retail stores has been discussed since the company acquired Motorola
Mobility, a producer of smartphones and tablets, and thereby became a provider of
mobile devices itself. The question as to whether Motorola Mobility should emerge as
Google’s retail arm, or whether Google Stores should not promote Motorola devices,
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reportedly remains unanswered.

Our illustrative cases collectively suggest that, if designed properly, engagement
ecosystems consisting of individual physical and virtual EPs can enhance an
organization’s ability to successfully exchange resources, and therefore to co-create
value with customers. This, in turn, would generate higher revenues and superior
organizational performance. Furthermore, while the configuration of individual
engagement ecosystems may vary across organizations, its optimal configuration
could be perceived as a dynamic capability, and therefore as a type of competitive
advantage (Teece et al., 1997).
Although the inclusion of additional, physical, EPs may not result in superior
organizational performance per se; we argue that, by introducing physical operating or
supplying EPs, service providers attempt to control the accessibility and reflexivity of
their engagement ecosystem, both key success criteria for the performance on EPs
according to Ramaswamy and Gouillart (2010). By creating holistic engagement
ecosystems, organizations may facilitate interactive experiences between themselves
(i.e. the engagement object) and their customers (i.e. the engagement subject), which
consequently, are conducive to creating trust and commitment (Figallo, 1998;
Oldenburg, 1999; Brodie et al., 2011). Of course, from an academic point of view,
shifting our focus from a singular perspective on EPs toward an integrative and
holistic understanding of engagement ecosystems provides multiple implications for
research and practice alike, as discussed in the next sections.

Research implications
This study provides a direct response to calls for further research at the intersection of
ICT and service in general (Chesbrough and Spohrer, 2006; Raj and Sambamurthy,
2006; Ostrom et al., 2010), and into the nature and dynamics of technology-enabled
firm-to-customer interactions, more specifically (Huang and Rust, 2013). We explored
the seemingly paradoxical shift from entirely virtual, to integrative virtual/physical
firm-to-customer interactions. While previous scholars investigated the transition of
firm-to-customer service interactions from physical to virtual environments (e.g. Davis
et al., 1999), insights into the currently observable reverse shift was lacking to date. We
addressed this gap in knowledge by adopting an analytical lens rooted in the concept
of “EPs” (Sawhney et al., 2005; Ramaswamy, 2009), since the engagement concept is
considered particularly suitable to advance our understanding of customer-firm
 MSQ interactions in ICT-driven contexts (Sawhney et al., 2005; Bogatin, 2006). We thereby
24,6 also address Brodie et al.’s (2013) call for empirical work investigating the role of EPs
within service environments, and add to the emerging literature on EPs (Ramaswamy
and Gouillart, 2010; Nenonen et al., 2012).
Our study makes a number of clearly defined contributions. First, by drawing on
findings from our illustrative cases, we provide insights into the changing nature of
604 physical/virtual customer-firm interactions. Our findings allow us to, second, delineate
a taxonomy of EPs (cf. Table II and Figure 1), highlight their individual characteristics,
and thereby enhance our understanding of the nature of this emerging concept. Third,
we develop and introduce the “engagement ecosystem” concept into the service
research literature, explain the nature of the concept’s theoretical association to EPs,
and contribute to the wider discourse on service ecosystems that has recently emerged
in the discussion about the S-D logic (e.g. Vargo and Lusch, 2009). Through this
theoretical contribution, we are able to, fourth, delineate resulting implications for
future researcher that can help to advance this emerging area.
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Given the complexity of this emerging field, we recommend future empirical

research to take a pluralistic approach; that is, to integrate the use of qualitative and
quantitative methods beyond the adoption of purely illustrative cases (Hair et al., 2010).
While Google has not yet decided to open physical retail outlets to date, its current
“pop-up” stores and “store-within-store” concepts, however, should be considered as
important interim solutions to dedicated supplying platforms. Any empirical work
set in the context of this organziation, or any other firm that may experience the
virtual-physical shift in the future, could help to validate, advance, or refute
the insights presented here. Similarly, further research addressing the nature and
dynamics of any interactions facilitated by specific EPs also represents an important
future research avenue. As discussed, the emergence of omni-channel retailing
provides a rich context for further empirical research, and scholars could, for example,
attempt to assess the relative importance of each EP archetype presented here,
especially in regard to their individual ability to foster customer engagement as
interactive cognitive experience (Brodie et al., 2011).
While the roots of customer engagement and EPs lie within the domain of
relationship marketing and S-D logic (Vivek et al., 2012; Vargo and Lusch, 2008), future
scholars may wish to explore the potential relevance of alternative, or complementary,
perspectives relevant to engagement ecosystems and technology-enabled customer-to-firm
and customer-to-customer interactions. For example, the “connectivity” metaphor could be
employed to generate novel insights into the performance and design of engagement
ecosystems (Breidbach et al., 2013). Understanding connectivity allows scholars and
practitioners to assess and understand the quantity and quality of socio-technical links
between actors who interact and exchange resources by means of ICT within an EP.
Scholars may, therefore, investigate how engagement ecosystems should ideally be
designed to achieve optimal, or requisite, levels of connectivity.
The “transmedia” concept may provide another important perspective for service
researchers interested in investigating co-creation processes spanning multiple
physical/virtual realms. Introduced by Jenkins (2003), transmedia refers to stories that
are told across multiple media. However, transmedia does not imply that the same idea
is conveyed via multiple physical or technical sources, but suggests that each medium
individually contributes to a holistic experience. As such, it is similarly to individual
EPs that perform a distinct role within an engagement ecosystem. While transmedia
has the potential to emerge as a new analytical lens (Scolari, 2003), it has not yet been
 utilized in service research to date. By applying a transmedia lens to engagement Engagement
ecosystems, future scholars could provide new insights, and we encourage scholars to platforms to
investigate the wider service/ICT interface through this novel lens.
Finally, this study is also subject to some limitations. The exploratory nature and engagement
use of illustrative case studies to theorize implies we cannot claim our findings to be ecosystems
fully context-independent. While we selected Google and Microsoft as illustrative cases
because these prominent organizations expanded, to varying levels, from a purely 605
virtual to a virtual/physical engagement ecosystem. Other organizations, however,
may provide equally suitable research contexts that may result in the emergence of
other EP archetypes, or show different types of engagement ecosystem configurations.
For example, rumors in the 2012 business press indicated that Amazon allegedly had
plans to open physical retail outlets in Seattle, WA. While the firm has not yet opened
any physical retail outlets to date, merging physical and virtual experiences appears to
be of continuing interest to many organizations, and is hence deserving of more research.
Furthermore, as objective and value aware individuals, we must acknowledge that any
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reality is only imperfectly apprehensible, and that resulting findings are only probably
true. Because of “flawed human intellectual mechanisms” (Guba and Lincoln, 1994,
p. 205), we explicitly state that, despite the fact that we followed best-practices outlined
in the relevant literature (i.e. Eisenhardt, 1989; Miles and Huberman, 1994; Siggelkov,
2007), imperfect observations of the reality under investigation may have occurred
during data collection and analysis.

Managerial implications
Burghin et al. (2013) conclude their industry commentary about “charting experiences
where digital meets physical” by stating that practitioners should identify areas within
their firms where “immersive experiences or interactive touch points” (p. 25) can
stimulate engagement, as customers and employees come to expect interactions
between heightened digital and physical offerings. Based on our findings, we suggest
practitioners should consider the ideal configuration of their engagement ecosystem
with respect to facilitating customer engagement and co-creation processes
(Ramaswamy, 2009). Payne et al.’s (2008, 2009) recent work on managing the
co-creation of value provides additional insight into these processes. Nevertheless,
the initial implementation of an engagement ecosystem is likely to represent a unique
challenge. Practitioners should pay attention to specific “engagement” antecedents and
consequences when implementing engagement ecosystems.
Our study also generates managerial implications for the retail context, in which the
concepts of “multi-channel” and “omni-channel” have been introduced to explore
the current and future states of retailing (e.g. Verhoef et al., 2007). Omni-channel
retailing integrates all retail channels for a consistent customer shopping experience
(Rigby, 2011). Similar to engagement ecosystems, an omni-channel retailing system
incorporates the advantages of the physical store with the information-rich experience
of online shopping. Thus, a key challenge for retailers will be to manage the quality of
a customer’s service experiences derived from physical stores, web sites, social media,
and other channels. Our research provides the necessary foundation to develop a
“touch point architecture” for customer engagement (Dhebar, 2013).
Another key question emerging from our findings is how practitioners can
guarantee the accessibility of an individual EP. For technology firms like Google, the
accessibility of their operating EP at the virtual/interactional interface is of the utmost
importance, since their advertising revenues are generated here. The prerequisite to
 MSQ ensure the accessibility and usability of its operating EP lies in Google’s ability to control
24,6 both, the instrumental EPs at the physical/international EP (i.e. technical devices); as
well as the enabling EP at the virtual/transactional interface (i.e. software applications).
Managers, therefore, need to understand how specific interactions between their own
EPs archetypes influence the performance of their own engagement ecosystem.
Organizations that ensure positive customer experiences within their operating EP
606 will likely be able to ensure their customer’s continued use of their value propositions.
Such positive use-experience will, in turn, likely result in enhanced levels of customer
engagement and, subsequently improve firm performance through cost reductions,
sales growth, or enhanced company referrals (Kumar et al., 2010). In addition, engaged
customers can play a key role in organizational collaborative development and
innovation processes (Sawhney et al., 2005). Ultimately, managers could consider
enhancing their ability to control both the instrumental and the enabling EPs by
introducing supplying EPs at the physical/transactional interface (i.e. retail stores), if
applicable within their organizational boundaries. Here, customers can be introduced to
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novel technical devices (i.e. the instrumental EP) and trained in their usage, which, in
turn, improves their experience and ensures the continued utilization of other, revenue
generating value propositions at the operating EP.
Finally, ensuring a continuous stream of advertising revenue requires almost all
digital organizations, like Google, to collect data about their customers’ behavior and
individualized preferences. Controlling the instrumental and enabling EPs, once again,
represents a necessary prerequisite for managers, as it enables the collection of large
customer datasets, which can be analyzed using big data analytics, including data
mining (Huang and Rust, 2013). Ultimately, by generating an enhanced understanding
of their customers, practitioners may alter their relevant engagement ecosystems; most
importantly the operating EP. Specifically, such practice would ensure the reflexivity of
the engagement ecosystem, a key prerequisite for its success (Ramaswamy and
Gouillart, 2010).

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About the authors

Dr Christoph F. Breidbach, PhD, is a Lecturer at the University of Melbourne, Department of
Computing and IS. Prior to joining the University of Melbourne, Dr Breidbach was a
Postdoctoral Scientist at the University of California, Merced, and held the Visiting Positions
at the Indian School of Business and IBM’s Almaden Research Center. His research addresses the
fundamental question of how ICTs transform service systems, and has been published, or is
forthcoming, in the Journal of Service Research, The Service Industries Journal, Service Science,
Marketing Theory, and other outlets. He serves on the Editorial Board of the Journal of Service
Research. Dr Christoph F. Breidbach is the corresponding author and can be contacted at:
christoph.breidbach@unimelb.edu.au
Professor Roderick Brodie (PhD) is a Professor and the Head of the Department of Marketing
at the University of Auckland of Business School, New Zealand. His research and teaching
experience is in the areas of marketing theory, strategy, branding, and service research. His
publications have appeared in leading international journals including; Journal of Marketing,
Journal of Marketing Research, International Journal of Research in Marketing, Management
Science, Journal of Service Research. He is an Associate Editor of Marketing Theory and has
served on the Editorial Boards of the Journal of Marketing, the International Journal of Research
in Marketing, the Journal of Service Research, and the Australasian Journal of Marketing. He has
been active in the development of Marketing Education in Australasia and internationally.
Dr Linda Hollebeek, PhD (Auckland), is a Senior Lecturer in the Waikato Management School
at the University of Waikato (Department of Marketing), New Zealand. She also has work
experience in management consulting. Her research interests include customer engagement,
service marketing, and branding. Her work to date has appeared in the Journal of Service
Research, Journal of Business Research, Journal of Marketing Management, Journal of Strategic
Marketing, International Journal of Wine Business Research, and Food Quality & Preference.

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