Service and Experience with J. N. Halm: Truly innovative: Do your customers believe you are?

The banking sector in Ghana remains interesting. More than two decades ago, when I joined the industry, the excitement then was about the entrance of new players from within the sub-region. The new entrants brought not only new products but also changed the way banks marketed their products and services in those days.

Innovation then had to do with new products, new marketing strategies, etc. These days, the excitement is about who has the latest app, the newest banking software, the latest chatbots, etc. And whenever the subject of innovation comes up, I cannot help but wonder if banks are really spending smartly when it comes to these new gadgets and widgets.

I have witnessed, on so many occasions, the fanfare that accompanies these major innovations. The press releases. The internal presentations. The interviews in the media by senior management staff members. Some of these are quite impressive, if you ask me, and in a sense, these are all important. But really, do the customers of these banks feel the same way about the latest apps, AI-infused chatbots, and all that, as the employees of the banks do?

In my experience, in many cases, there exists a gap—a gap between what these organisations believed had been done and what the people they served actually experienced. It is in that hole, that crack, that a lot of investment sinks and is never recovered. Interestingly, this gap is at the heart of a thought-provoking paper published in the February 2026 edition of the Journal of Service Management.

The paper takes on one of the most underexplored questions in service research: how do we properly measure what customers actually perceive when they assess a firm’s innovativeness? Not what the firm thinks it has achieved. Not what the industry analysts record. But what the customer—the person whose loyalty, spending, and advocacy ultimately determine the value of any innovation—genuinely believes. The study was simply titled, “Measuring Customer Perceptions of Innovativeness.”

The researcher behind the study is none other than Emerita Prof. Valarie A. Zeithaml, who, together with her colleagues Len Berry and Parsu Parasuraman, gave the world SERVQUAL—arguably the most widely used instrument in the history of service quality measurement.

SERVQUAL was built on a deceptively powerful insight: that service quality is not an objective property of the service delivered but a perception formed in the customer’s mind, shaped by the gap between what they expected and what they actually received. That insight changed how the entire field thought about quality. Prof. Zeithaml now suggests it should also change how we think about innovativeness.

The case she makes is straightforward and difficult to argue with. If a firm’s innovativeness matters—and prior research has shown that it is linked to consumer loyalty, shareholder value, and customer value co-creation—then the measurement of that innovativeness must be grounded in the customer’s perception, not the company’s self-assessment.

A firm that invests heavily in research and development but whose customers see no evidence of meaningful change is not, from a market perspective, innovative. A firm that finds small, practical ways to improve the customer experience, which customers notice and value, may be doing more genuine innovation than its patent portfolio would suggest. The perception is the reality. At least, it is the only reality that drives commercial outcomes.

What Prof. Zeithaml draws on, with characteristic precision, are the lessons learned from the development and refinement of SERVQUAL—lessons that she argues apply directly to the challenge of building a customer-centric measure of perceived innovativeness. Among the most important of these lessons is the value of qualitative groundwork.

SERVQUAL did not begin with a hypothesis and a survey. It began with conversations with customers, conducted in focus groups, aimed at understanding how they actually talked about and experienced service quality, in their own language and through their own frame of reference. The resulting instrument reflected those conversations rather than imposing a researcher’s categories onto them. That fidelity to the customer’s perspective was a large part of what made the instrument so enduring and so widely applicable.

As a matter of fact, Prof. Zeithaml raises a particularly interesting challenge around the question of customer segments. Prior research has suggested that young customers and elderly customers perceive innovativeness differently—that the same firm’s innovations may be experienced, evaluated, and valued in quite distinct ways depending on the age and digital familiarity of the customer doing the evaluating. This observation opens a genuinely complex measurement question. Should we develop separate scales for different age segments, or can a single overall instrument capture the relevant variation across groups?

Her answer is characteristically pragmatic. If a firm serves a clearly defined segment, a restaurant chain that primarily serves young adults, for example, then a segment-specific scale will give sharper, more actionable insights. But if a firm wants to test the empirical reality of the differences between segments, rather than simply assuming them, it needs an overall scale built from the ground up to capture both perspectives.

One way to achieve this, she suggests, is to conduct separate focus groups with each segment and then develop an instrument that incorporates the dimensions most salient to both. The resulting scale is richer, more representative, and more likely to surface genuine insight rather than simply confirming what the researchers already suspected.

I know Prof. Zeithaml wrote her paper for academia. But the truth is that the implications of her argument extend well beyond the academic community. For service businesses of every kind, banks, hospitals, hotels, retailers, telecoms companies, the call to measure perceived innovativeness is also a call to honest self-examination.

It is an invitation to ask, with genuine curiosity and without the comfort of internal metrics, what the people we serve actually think of our capacity to change, improve, and surprise them. Do they see us as a company that is moving forward? Do they feel that our changes make their lives easier or more interesting? Do they think of us as a firm that anticipates their needs, or as one that is perpetually catching up?

These are not easy questions to ask, and the answers are not always flattering. Many banks in this country that have come out with one innovation or another would have received, had they thought to ask, a set of customer perceptions about their innovativeness that diverged sharply from their own internal narrative.

These banks would have noticed a divergence. This departure would not be a failure of the technology. It would be a failure of listening—a failure to understand that innovation is not complete when the product is launched. It is complete when customers experience it as something new and valuable in their own lives.

One can only imagine how many organisations are, at this moment, celebrating internal milestones for innovation; new systems, new processes, new product lines, while their customers remain largely unmoved. The award on the shelf and the feeling in the customer’s mind are two entirely different things, and the distance between them is precisely what a well-designed instrument for measuring perceived innovativeness could map with useful accuracy.

There is a particular kind of humility required to measure what your customers think of you, rather than what you think of yourself. It means accepting that the internal story and the external reality may not be the same story. It means being willing to find out that the change you are most proud of is the one your customers noticed least. And it means being prepared to act on what you learn, even when what you learn is uncomfortable.

The challenge posed by the aforementioned paper is for researchers to build on existing foundations and develop a robust, customer-centric instrument for measuring perceived innovativeness. It is a challenge worth accepting. The field needs this instrument. But businesses, in the meantime, need not wait for it. The more immediate challenge—and the more honest one—is simply to start asking their customers the questions they have been too confident, or too cautious, to ask.

Innovation is not what you build. It is what your customer believes you have changed about their world. Everything else is internal theatre.

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