easy to achieve, as the intangible nature of service activity and the active participation of the customer in producing the offering has led to uncertainty about how to innovate new services (Chesbrough,2005). Yet, service innovation is increasingly considered a vital element of a firm’s competitive strategy(MacDonough, Zack, Lin, & Berdrow, 2008), and this strategy will be misguided if the firm’s innovation approach is too short-sighted to make a real difference for customers–—or to be truly differentiated in today’s marketplace.