According to the Service-Dominant logic, this article identifies two important strategies that may have an effect on app performance: user empowerment and service innovation, and discusses the impact mechanisms of these two strategies on APP revenue performance. Based on the Service-Dominant logic, what internet platforms offer is service in essence. Internet does not produce tangible products per se. It is based on network communication protocols and uses digital information to serve users. With the wide application of Web2.0 technology in the internet world, the content editability and user participation in internet platforms have been greatly improved in most circumstances; these features enable users to participate in value creation activities. According to the Service-Dominant logic, users are actual value creators, and what companies mainly need to do is to provide better conditions for their value creation activities. User empowerment is to transfer the production rights of the platform to the vast number of internet users, and change the previous power structure in which companies dominate the value production and creation in the platform, and provide users with resources, vehicles, and policies to empower users to participate in public affairs in the platform. Users therefore have the ability to create value for themselves or fellow users by leveraging their knowledge and skills. Service innovation is the process of creating new services or innovating existing services. Through the innovation of operand resources (apps), the operant resource (users) can better create and capture value, and this innovation can finally achieve the integration of operand resources and operant resources, and ultimately improve app performance. In theory, both user empowerment and service innovation can facilitate users′ value creation activities. The performance of an app depends on a company′s value capture performance. At the same time, the more value users created through an app, the better a firm′s value capture performance will be. Therefore, user empowerment and service innovation should have certain impacts on app performance. 

In this article, a naturalistic observation method was used to track and analyze apps of a Chinese sample (N = 200) and a US sample (N = 206). We observed each sample app during the observation period (from March 3, 2017 to March 2, 2018), and then evaluated their performance during the evaluation period (from March 3, 2018 to June 2, 2018), and used one-way ANOVA to individually analyze the impact of user empowerment and service innovation on app revenue performance. Finally, it found that the results from the Chinese sample and the US sample were congruent: when an app decided to give users more power and let users dominate the value creation activities in the platform, it found that its revenue performance shows to be better in most cases (the results of both samples supported this assumption, p values were less than 0.001 in two cases); When companies stressed the role of service innovation, and continually rolled out new features or services for an app, the app revenue was generally better (the results of both samples supported this assumption, p values were less than 0.001 in two cases). The research findings in this article can complement and extend existing theories and knowledge about app performance. Although there are a handful of relevant publications on app performance, these articles did not pay much attention on revenue performance or focused on apps of specific industries. This article focused on app revenue performance and found that user empowerment and service innovation can have significant positive impacts on general apps′ revenue performance. To date, no article has pointed out that these two independent variables have significant impacts on app performance. 

This research can also bring valuable practical implications for app firms. First, firms should analyze the market position and functions of an app, and be clear about the targeting users of the app ("who is the app for?") and core functions ("what functions should the app have? How do users use it?”). Second, firms should pay enough attention to the crucial role of users in value creation, and also realize that users do not only just adopt and use an app, but also produce and create value. Third, firms should decide to empower vast users to create value base on the app′s market position. When launching the user empowerment strategy, firms must make users “willing to” produce or create value for the platform, and “enable” them to create value. If the app′s market position is congruent with the user empowerment strategy, firms can enable users to participate in the content production for the platform, elevate their feelings of being empowered, and ultimately enhance revenue performance. Some brands′ retail apps can empower users by increasing buyers′ online presence and adding brand communities. Last, firms should pay attention to service innovation for their app, continually introduce new functions and new features, and provide users with more convenient and easy-to-use services. Conversely, if a firm does not pay much attention to service innovation, the cost that users switch to competitors is also very low, then this firm may be caught up by other competitors, and its app′s revenue performance may eventually decline.

 

app performance, service-dominant logic, user empowerment, service innovation, naturalistic observation