Managing Adoption Barriers in Integrated Banking Services

Service organizations such as retails banks are attempting to increase their customers' lifetime value through the introduction of service innovations such as integrated banking. To date, these efforts have met with mixed success. This research proposes that strategic consideration of barriers to adoption can significantly alter and enhance the effectiveness of segmentation and communication efforts for service innovations. The results of a latent class regression with concomitant variables on a large-scale multinational consumer survey (n = 2,702) demonstrate that incorporating barriers to adoption significantly alters the segments into which customers are classified, resulting in improved model fit and out-of-sample prediction. Strategic implications of our findings for the introduction of service innovations are discussed.