Consumer well‐being through engagement and innovation in higher education: A conceptual model and research propositions

With globalization and the marketization of higher education, the relationship between higher education institutions (HEIs) and students is becoming more complex. As the cost of higher education increases, the expectations of students have not only changed dramatically but, combined with heightened competition in the market, it is clear that the balance of power has moved towards the students. Operating across this new landscape, HEIs are facing a different set of opportunities and challenges. In order to survive, differentiation through service innovation is imperative to achieving success in attracting and retaining students. While this has been voiced by a number of authors, until now, there is a paucity of empirical research examining the impact of service innovation in higher education on individual customer outcomes. This paper explores the links between service innovation and well‐being and the mediating roles of perceived service quality and customer engagement within the higher education context. The research is timely as previous studies have not taken into consideration the mediating roles of customer engagement between service innovation and customer well‐being. Yet, unless customers are engaged and participating in the service innovation process, or satisfied with the service innovation, the innovation may not lead to the desired customer outcomes. HEIs cannot afford to ignore the expectations of their primary customers (students). Hence, this conceptual paper seeks to develop a conceptual model of how service innovation leads to student/consumer well‐being and the mechanism through which perceived service quality and customer engagements affects this process.