Toss a Peach and Get Back a Plum: Impact of Customized Services on Firm Performance

Abstract

The digital economy has led to the diversification of user needs and continuous innovation by firms, and firms are increasingly providing customized services to respond to changing user needs and expect to improve their competitiveness and performance. However, there are few in-depth studies on the mechanisms of the impact of customized services on firm performance and the differences among industries. This study attempts to fill this gap by constructing an econometric model and conducting an empirical study. The results of the analysis of data from firms on Taobao show that: customized services provision has a positive effect on firm performance; differences exist in these positive effects, with the effects ranging from high to low in the raw materials, consumer goods, and industrial goods industries; and customer satisfaction plays a mediating role between customized services and firm performance. This study provides insights for firms to modify, improve, and transform their business strategies in the context of the digital economy.