Predicting Customer Satisfaction Based on Service Innovation Mediated by CustomerValue: An Empirical Evidence from IELTS Indonesia

Abstract

In the ever-evolving landscape of language proficiency assessment, the advent of Computer- Based Testing (CBT) within the International English Language Testing System (IELTS) marks a pivotal moment of innovation in the existing service of the organizations. Service innovation plays a crucial role by offering businesses a competitive edge and enhancing customer satisfaction. By introducing new and improved services, companies can differentiate themselves in the market, and meet evolving customer needs. Customer value plays a crucial role in understanding the relationship between service innovation and customer satisfaction. It serves as the bridge that connects the features and benefits of a service innovation with the
overall satisfaction experienced by the customers. This study is a survey research on Customer Satisfaction through service innovation, mediated by customer value in IELTS Indonesia. Signaling Theory was chosen to explain this selected phenomenon from the organizational
concern. The purpose of this research is to analyze the effect of Service Innovation on Customer Satisfaction mediated by Customer Value. The population in this study was customers of IELTS CBT in Indonesia. Snowball sampling techniques were applied and 150 respondents were included as the sample. Data analysis using SPSS-23 concludes that Service Innovation has a positive and significant effect on Customer Satisfaction and Customer Value. Besides, Customer Value has a positive and significant effect on Customer Satisfaction and Customer Value mediates the effect of Service Innovation on Customer Satisfaction. It also clarifies the application of Signaling theory in organizational contexts.