Marketing agility and firm performance: the role of customer service performance and customer co-creation

Purpose The effect of marketing agility on customer satisfaction and short- and long-term firm performance has not been empirically examined yet. Drawing on dynamic capability theory, the current study aims to investigate the direct effect of marketing agility on firm performance and its indirect effect through customer outcomes (i.e. customer service performance, co-creation and satisfaction). Design/methodology/approach Study 1 used cross-industry, multisource data, including survey responses from 609 managers and secondary data on firm performance. Study 2 validated the results of Study 1 with panel data covering 319 firms and fitted the short-term profitability model using 4218 firm-year observations and the long-term profitability model using 957 firm-year observations. Findings Marketing agility has a negative direct effect on short-term profitability but a positive direct effect on both long-term profitability and customer satisfaction. Furthermore, customer satisfaction fully mediates this relationship in the short term and partially mediates it in the long term. Research limitations/implications This study focuses on exploring the direct and indirect effects of MA on firm performance in the UK. It would be desirable to test the authors’ proposed model in other countries to understand the role of national culture in influencing MA and firm performance. Second, previous studies revealed that ordinary capabilities (i.e. innovation, market orientation, entrepreneurial orientation and learning orientation) mediate the link between MA and financial performance. Thus, future research could explore the mediating role of these variables on such relationships. Third, this research examined how MA affects firm performance. Further examination could include some moderators into the authors’ suggested conceptual framework to explore when this relationship is stronger or weaker. For instance, future studies could explore the influence of MA on firm performance during different degrees of market turbulence. Fourth, further research could explore the main drivers and constraints of MA. Practical implications This study offers significant insights for managers who are considering a fresh approach to MA as a strategic imperative to enhance customer satisfaction and firm performance. The findings suggest that MA is more likely to have negative effect on short-term profits when customer satisfaction, co-creation and service performance were not considered. Hence, managers who are short-term oriented might contend that being agile in marketing does nothing to help create immediate benefits to a firm. The findings also revealed that managers who are long-term oriented should keep in mind that MA has a favorable direct influence on long-term profitability and also a persistent indirect benefit through consumers’ satisfaction. Originality/value Empirical studies on the firm performance effects of marketing agility are currently lacking, and the few existing studies do not differentiate between short-term and long-term firm performance. Through customer-related outcomes of marketing agility, this study explains the mechanism behind firm performance. Moreover, the current study develops a new measure (the MA index) using a fuzzy mathematical programming approach.