The Dark Side of Business Model Innovation: An Empirical Investigation Into the Evolvement of Customer Resistance and the Effectiveness of Potential Countermeasures
Sven Heidenreich, Elena Freisinger, and Christian Landau
kHUB post date: March 1, 2023
Originally published: May 4, 2022 (PDMA JPIM • Vol 39, Issue 6 • November 2022)
Read time: 25 minutes
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In the past decade, a core assumption of research on business model innovation (BMI) has been its beneficial character. However, studies have shown that potentially disrupting BMI is not immune to failure. Still, studies that investigate the causes of BMI failures are lacking. This article shifts the focus to the dark side of BMI by using a demand-side approach, which cross-fertilizes on the new product development (NPD) research stream of passive innovation resistance. We argue that BMI, like any other type of innovation, imposes change on the customer, which endangers the status quo. As a result, passive innovation resistance evolves, potentially disrupting continuous adoption. Thus, the main goal of the current study is to investigate whether and how BMI evokes negative effects of passive innovation resistance on customers' adoption behavior (Study 1) and to determine which marketing instruments can be used as countermeasures (Study 2). Our findings confirm that passive innovation resistance is a strong inhibitor of continuous BMI adoption. However, the detrimental effects of passive innovation resistance on continuous BMI adoption can be attenuated by employing benefit comparisons or testimonials in business model (BM) announcements. From a theoretical perspective, this study enhances the current knowledge on how stable customer predispositions affect the adoption process of BMI. By so doing, our study confirms the applicability of passive innovation resistance beyond the NPD domain but also sheds light on differences in the cause-effect mechanism between BMI and product innovation contexts. From a managerial perspective, this study equips managers with effective countermeasures to passive innovation resistance that should reduce the probability of BMI failure.
- Our study shows that business model innovations—just like other types of innovations—are subject to the risk of continuous adoption failure due to innovation resistance, but negative effects can be attenuated by employing the right marketing measures.
- With respect to measures before the market introduction, business developers should always start with a thorough assessment of the current business model and compare it with the innovation to identify if the new one comes with several behavioral changes.
- With respect to measures during the market introduction, companies should use marketing campaigns that are targeted at reducing customer satisfaction with entrenched or alternative business models or use testimonials in advertisements, underlining the high degree of satisfaction with the new business model.
- With respect to measures after the market introduction of the business model innovation, marketers should consider using innovative customers as opinion leaders to advocate business model innovation adoption as soon as they have seen the positive potential of the new business model.