Innovation in service has attracted considerable interest in recent years, partly because its processes and activities are so diverse, and partly because its impact on performance is still a puzzle. This study proposes a comprehensive theoretical model, which reviews combinations of technological and non-technological innovation practices and the interrelation between different innovation strategies for the generation of sustainable competitive advantages. Using data from the 2010 and 2012 European Community Innovation Survey, it empirically examines different innovation strategies, analyzes their role in organizational performance, and thoroughly researches sectoral variation in innovation strategies between the rest of services. Comparative analysis suggests that knowledge-intensive services are the most innovative activities. Yet, complex innovation strategies are positively related to turnover irrespective of the service activity. The study concludes that there are sectoral differences in general innovation level and effects of innovation strategies on performance.