The impact of value co-creation in sustainable services: understanding generational differences

Abstract

PurposeThe service industry has been facing many challenges connected to sustainable practices and how they affect final consumers. This paper aims to explore the impact of value co-creation (VCC) on customer-based brand equity and satisfaction, the latter being considered in terms of overall and green customer satisfaction. Moreover, considering the influence that a consumer’s age has on their behaviour, this paper analyses the moderating role of generational cohorts (Centennials vs. Millennials) on the direct interactions between the examined variables.Design/methodology/approachThe empirical study was conducted in hotel companies, which place a strong emphasis on customer service and as such provide valuable implications for the industry. The data were collected from 263 hotel guests in Ukraine in 2018 using a structured closed-response face-to-face survey. Partial least squares structural equation modelling was used to test the hypothesised relationships. Multi-group analysis was conducted to examine the moderating role of the generational cohort.FindingsThe results show that customer perception of VCC positively influences brand equity. The findings also indicate that brand equity mediates the relationship between VCC, overall customer satisfaction and green customer satisfaction. In addition, it is demonstrated that generational cohorts moderate the relationships between VCC and overall customer satisfaction.Practical implicationsThis study suggests that service companies should create more opportunities for VCC activities, not only to increase their customers’ participation in green practices but also to enhance brand equity and satisfaction to gain more competitive advantages.Originality/valueThe contribution of this study lies in considering value co-creation as a novel driver of brand equity, overall customer satisfaction and green customer satisfaction through the lens of sustainability in service-based companies. Examining the moderating role of the generational cohort provides significant insights into the impact of value co-creation through different groups of customers.