Essay: Self Service Technologies and Customer Loyalty

Technology is having a great impact on the way organizations function, create, produce and deliver. Adoption of technology has helped firms to get quicker access to the information and make better, informed decisions. This is helping in changing the way traditional business used to work and develop new practices. One of the important applications is Self-service technology especially within the service industries. Self-servicing technologies are those that allow the customers to perform the service on their own, without the help of the employees of the organization. Self-servicing technologies have already occupied a vital position in industries like hotels, banking, and airline. Examples include, web-check in, automated check out in hotels, automated teller machines (ATMs), parking ticket with a time stamp on it at airports and other places. Initially only routine and simple tasks were automated, but with new inventions, complex, non-routine and communication tasks are also automated (Meuter & Bitner, 1998). ‘Properly designed service technology systems allow relatively inexperienced people to perform very sophisticated tasks quickly’ (Quinn and Paquette, 1990). Given the speed of technology development, it is likely that self-service facilities will continue to evolve and will play an even more important role in service delivery than they do currently. (Beatson, Lee, & V.Coote, 2007)
Service encounters, the ‘moment of truth’, the time when a consumer interacts with the employees of the organization, were by default with the service provider. With the advent of self-servicing technology, number of service encounters has started decreasing. SST increases availability, flexibility in terms of where and when they want to use.
Previous researches into the service encounters have identified the importance of personal interactions in satisfying consumers and encouraging commitment to the organizations (Bitner, 2000). Despite the potential advantages with SST, managers are reluctant because impersonal service may increase the distance and hence customer loyalty. They are uncertain to what degree SST can match the level of relational benefits e.g. customization achieved through personal service. Personal service was viewed as the cornerstone of most service industries (Meuter & Bitner, 1998). Employees who interact with the same customer repeatedly are able to customize a feeling of higher quality (Lovelock, 1983). Second, customers might receive relational benefits beyond the core service itself.
Hence by decreasing the personal interactions, there is a possibility that the customer loyalty and the commitment can get affected. Parasuraman (1996) describes the growing importance of self-service as a fundamental shift in the nature of services. There is a need for the organizations to understand how the introduction of self-servicing technologies can impact customer loyalty, it can be used to enhance the experience or can lead to dissatisfaction also. Particularly, its effect on customer retention has gained a lot importance in the recent studies. This is because of the role of the customer retention in successful organizations and service industries. Repeat customers have been lifelines for organizations. The very fact that because of self-servicing technologies, personal interactions reduce, which are known to have a positive impact on customer retention. So to avoid the risk of isolating themselves from their consumer base, it is important the effects are well understood before the implementation.
Every company employs its resources to increase the loyalty of customers expecting that it will help to meet the corporate objectives. Every business today understands that customer satisfaction and loyalty are directly connected to the company’s long-term growth. According to Oliver (1999), loyalty is a “deeply held commitment to rebuy a preferred product/ service consistently in the future, thereby causing repetitive same brand or same brand-set purchasing despite situational influences and marketing efforts having the potential to cause switching behavior”. Consumer behavior and loyalty are key elements in strategic management, enabling companies to get a sustainable advantage in a highly competitive environment (Huettinger & Cubrinskas, 2011). The loyalty to a store, company or a brand is affected by the customer’s experience. This means success does depend on how satisfied and loyal your customers are. Hence lot of efforts are put in to earn the loyalty, implementing a SST can be one of them.
In this paper, the main focus is on understanding what makes us adopt the new technology, how should a service provider understand what is needed for the design of SST. Under what circumstances does a customer prefer to use SST and how can industries leverage this in order to provider better and efficient service.
Literature Review
In Self-Service Technology and the Service Encounter, the authors Amanda Beatson, Nick Lee and Leonard V. Coote have tried to explore the relation between self-service technology, personal service and consumer commitment. They conducted in-depth interviews, to see how the hotel residents perceived the impact of personal service and self-servicing technologies on their decision to come back again or on the overall experience of the stay. Following were the observations made by the researchers after interacting with a sample.
Customer satisfaction – Harris et al. [1995: 64] states that ‘there is a clear recognition in the services marketing literature of the importance of personal interactions in the service encounter in creating satisfied customers’. The line of visibility for the consumers is only till the front-line employees, as they are the ones who interact with the consumers are the face of the organization. They are the only intangible aspect of the services. Due to the intangibility of services, consumers seek tangible cues to form their judgements, and often front-line employees are a key basis for judgements of consumer satisfaction (Shostack, 1977). As consumer satisfaction is closely linked to the organization’s performance, it becomes important for the managers to study it in depth. Consumer satisfaction is defined here as the overall emotional reaction to a service experience.
Service attributes ‘ It is important for the managers to get a holistic view of the satisfaction assessment. This is because, different attributes are perceived in different ways by different consumers, some attributes might satisfy them while some could lead to dissatisfaction. Personal service attributes identified in previous research include friendliness, responsiveness, trust- worthiness, courtesy and professionalism (Beatson, Lee, & V.Coote, 2007). Self-service attributes have also been identified in previous research (Dabholkar, 1996; Meuter et al., 2000; Walker et al., 2002). Examples of these self-service attributes include customization of the technology, convenience of the technology, reliability of the technology and enjoyment of using the technology.
In the framework proposed by the researchers, they have tried to test the hypotheses about direct relationships between personal service and self-service technology to overall satisfaction.
Consumer commitment ‘ The link between consumer satisfaction and commitment has been well established based on the previous researches. Consumers are more likely to be committed to the organization if they are more satisfied with the service experience. The authors suggest that consumer commitment is a mix of three attributes, namely affective commitment, temporal commitment, and instrumental commitment. Gundlach et al. [1995] suggest that commitment measures should contain an attitudinal component (affective commitment) as this signifies an intention to develop and maintain a long-lasting relationship. It is a desire to continue a relationship with aan organization because of a linking or positive attitude towards it. Commitment has a temporal dimension (temporal commitment), which highlights that commitment is important over the long term. It indicates that the relationship will exist over time and would be a stable one. Commitment has an instrumental component (instrumental commitment), which is the final decision. This suggests that the consumer is with the organization because of the existence of the perceived costs (economic or psychological in nature, real or perceived costs) if they leave the relationship.
The conclusion the authors were able to make was that the performance of self-servicing technology attributes, as well as personal service attributes will have an effect on overall satisfaction. Going forward, overall satisfaction has an effect on ‘ affective, temporal and instrumental commitment. Also, the frequency of self-servicing technology and personal service usage will alter the relationship between the performance and self-servicing technology attributes and personal service attributes, respectively on overall satisfaction. The limitations of this research were that they were not able to prove it with the help of empirical data. This experiment was carried out based on the interviews. But they were able to conclude that the more consumers interact with self-service technology the more skilled they become with their role. This indicates a ‘learning curve’ associated with increased usage. Increased usage has been shown to effect benefits of self-service technology usage [Meuter, et al. 2003]. Based on the interviews, the authors alluded to the fact that familiarity with the self-service technology systems affected their appreciation of the self-service technology and how it relates to their satisfaction levels.
In the paper ‘The potential hazard of self-service in developing customer loyalty’ by Selnes, Fred and Hansen, Havard, the researched have tried to argue that transformation from personal service to self-service does not necessarily mean a transition from personal to an impersonal relationship, instead it suggests change form personal to a mix of personal and self-service. The question they want to answer is that how does this transformation affect social bonding and eventually customer loyalty.
Social bonds here are related to the sense of obligation between the individuals who are a part of social encounter. So, when there is an interaction between a customer and an employee, and if the customer experiences some kind of friendly gesture, he feels obligated to return the favor. Customers have the tendency to deal with the organizations or people they know when they are getting involved with products of high risk. By bonding with the customers, the service providers are able to gain the knowledge about customers’ taste and preferences. Hence the social bonds bring an utilitarian value to the customer. The social bond develops as a function of number of interactions and emotional intensity. The social bond grows by meeting more number of times and communicating at a personal level.
The authors have proposed two theoretical models, which are discussed in depth in the models, frameworks and theories section. The replacement model (Figure 1) discussed in the paper suggests that the strength of the social bond depends upon the usage of self-service, which replaces the personal service interaction. The second model, hybrid model (Figure 2), suggests that for every task a customer needs to perform, can either be of consultative or operative nature. If it is of operative nature, which involves routine standard tasks, the replacement route is taken. This route consists of more of self-service and very less of personal service. While if the task is consultative in nature, which is quite complex and requires personal intervention. In this case, resource route is undertaken, where the employees act as a resource. In this route, the social bond plays a vital role. Hence the nature of the task decides the route to be undertaken.
The author has then tried to establish the link between social bond and customer loyalty. Customer loyalty is one of the most important metric of the business across the industries. Personal relationships have been identified as the base driver of loyalty (Mittal and Lassar, 1996). When a person develops a bond with the other person, the bond extends to his network to which he is connected (family, friends, colleagues, etc.). This indicated that when a customer perceives an obligation towards an employee, that obligation extends to the network the employee is connected to also, here, the organization. When the customers have developed the knowledge and the trust, it will motivate him to continue the relationship and commit oneself.
The effect of self-service in relationships where the customer has developed a social bond to one or more employees was tested with the help of collecting data and using the Pearson correlation matrix of measure to get the result. The measures used were:
‘ Social bond ‘ defined as a mix of customer’s perceived obligation towards the employee and the perception of the service provider as a resource
‘ Self-service ‘ defined as the level of interaction between the customer and the self-servicing technologies
‘ Personal service ‘ defined as the level of personal interaction between the customer and a front-line employee.
‘ Customer loyalty ‘ defined as the motivation to continue the relationship, have a good image of the provider and ready to extend the relationship
‘ Lot of other variables were used such as expertise, time pressure and demographics were used
None of the models used received full empirical support; hence the models cannot be compared. The results of the analysis suggests that
‘ Personal service has a positive effect in social bonding and eventually customer loyalty
‘ For low complexity relationships (replacement model), personal service interaction had a positive effect on social bonding, and the effect of bonding on customer loyalty was also found to be significant. But self-service did not have a negative effect on bonding.
‘ For high complexity relationships (hybrid model), transformation from personal to self-service will have a negative effect on the social bonds.
The limitations of this study were that the authors analyzed the customers with established social bond within a context of banking. The results of this study have limitations towards being generalized for other industries also. The cross-sectional design employed to assess the effect of transformation in type of service interaction is also a limitation. The assumption underlying here, is that the customers who are using self-servicing technologies frequently did not used to do before and those who use less now are likely to use more in the future.
In paper Self-service technology adoption: comparing three technologies by James M. Curran and Matthew L. Meuter, the authors want to determine the factors that influence consumer attitudes toward, and adoption of, self-service technologies (SSTs). The point they make is that encouraging customers to use new technologies is far more challenging than encouraging the employees to make use of new technologies. Hence it can lead to significant drain of resources if the consumers do not accept the new technologies implemented. This paper has tried to emphasize on the factors that will help to design, manage and promote the new technologies. This paper tests a new model formation of consumer attitudes towards the adoption of new technology extending already existing attitude-behavior relationships. By identifying the beliefs of the consumers, a marketing strategy can be designed which is directed towards them. By comparing the results across three different SSTs, it is possible to find that salient antecedents change during the adoption process.
Previous researches suggest the hindrances for the customer to adopt the new technology. The changes in service delivery with respect to the technology might be for the benefit for the customer. But the service providers must be aware that when there is a change in the service, a big chunk of customer base that are supposed to be benefited by the change, will opt not to participate in the new service format (Langeard et al., 1981). Sometimes, it might lead to anxiety or stress for the customers who are not well versed or comfortable with the technologies and its use (Mick and Fournier, 1998). Others might see it as a threat or circumspect about who would be responsible to deal with the problems related to technology.
There are several perceived benefits also like cost savings, attractive greater control over the service delivery, reduced waiting time, a higher perceived level of customization (Meuter and Bitner, 1998), convenience of location (Kauffman and Lally, 1994) and fun or enjoyment from using the technology (Dabholkar, 1994, 1996). The service providers actually bank on attracting a large number of customers to justify the costs of implementation. The technologies used must benefit customers and the strategies that are designed to attract the customers, which will address the concerns and benefits in the customer’s minds. The technology acceptance model (TAM) (Adams et al., 1992; Davis, 1989; Davis et al., 1989) extends the attitude toward behavior ‘ behavioral intention relationship, established in the theory of reasoned action, to the adoption of computers in the workplace.
The researchers developed a model in which four antecedent beliefs, used as predictors of attitude towards SST ‘
1. Ease of use ‘ degree to which a user would find the technology to be free from effort and convenient to use
2. Usefulness ‘ the subjective probability that using the technology will improve the way a user could complete the given task
3. Perceived risk ‘ probability of the outcomes given a behavior, danger and severity of negative consequences
4. Need for interaction ‘ desire to have a personal contact with the employees during the service encounter
The relationships are shown in Figure 3. This model has been tested across three different technologies to increase the robustness of the process and to check whether the relationships are consistent throughout or no. Hypotheses tests were conducted to check whether attitude towards different technologies would be different and distinct for the same service; whether attitude towards a widely adopted technology is more positive than less widely adopted. Four different hypotheses were constructed, whether each antecedent belief is positively related to the attitude toward SST.
The three technologies used in this research are – automated teller machines (ATMs), bank by phone (BBP), and on-line banking (OLB). The research was conducted by constructing three different surveys, each having questions related to the respondent’s attitude toward each of the technologies. The data was collected and it was found that ATM was wisely adopted, whereas the other two were not frequently used, but bank on phone is more used than online banking.
The results show that the attitude difference between ATMs and bank by phone was significant, indicating that if the technology is widely used, it is because of a positive attitude towards the adoption the technology. Three out of four antecedent beliefs were found to have significant impact under certain circumstances and it is interesting to note that the impact of the antecedent beliefs vary depending on the technology. This makes the service providers realize that there can be multiple beliefs which influences the customers’ attitudes and that they must be considered while introducing a new SST into the service encounter. Also, note that these beliefs are not constant across all technologies and can change over time. Out of the four, the need for interaction did not prove to be a significant belief across all the three technologies in this study.
However there are limitations of this study, that this study cannot determine whether the problem of a poor adoption rate is because there is a design flaw with the technology used for bank by phone that makes it difficult to use or even marketing it or they have not been able to clearly educate the customers about how easy it is to use. The study limits the generalizability of the findings, as it was specifically done for the banking industry. Cross sectional data was used instead of longitudinal.
In the paper Unmanned Bonds: the Impact of Self-Automated Service on Consumer Loyalty by Maik Huettinger, Vytenis Cubrinskas, importance of different customer traits for preference and usage, using statistical analysis is emphasized.
Models, Frameworks and Theories
Lot of researchers have tried to develop frameworks to identify the factors leading to the adoption of SSTs, or to extend the frameworks of delivery of services by integrating technology and use of SSTs by the customers.
The triangle model of services marketing (Kotler, 1994) is a framework that has been extended to include the influence of technology by Parasuraman (1996). The vertices of the triangle represent employees, company and the customers (Figure 4). The figure consists of three end points and it adds external marketing-activities pertaining to 4Ps (product, price, promotion, place), which are emphasized in the marketing of goods. Till now, researches have emphasized on the relationship between employees and the company (internal marketing), company and the customers (external marketing), employees and the customers (interactive marketing). With the advent of technology and its wide use, Parasuraman (1996) extends the basic model to include technology also. This changes the triangle to a pyramid as shown in Figure 4. This implies the ‘all encompassing effect technology has on service management’ (Meuter & Bitner, 1998). Interactive marketing adopts new complexities and forms, allowing the customers to interact with technology as seen in customer-technology linkage. Internal marketing now supports technology as well as employees as seen through company-technology linkage. Employees need to work with technology to deliver the best service to the customer as seen in employee-technology linkage. This helps in improving the service quality. Parasuraman determinants of service quality are reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding, and tangibles.
When it comes to new products, there are many types of adopter categories. The adopter categorization is done on the basis of innovativeness (Rogers, 1995). He suggests that there exists a normal distribution, which consists of five categories ‘ Innovators, Early adopters, Early Majority, Late Majority and Laggards. After developing the prism model including the technology, Parasuraman developed a multi-item scale to assess people’s readiness to interact with technology. This is an important parameter, as it helps the service providers to understand whether the people are eager to embrace the technological change or no. There are four dimensions to technology readiness: optimism, innovativeness are contributors that increase an individual’s technology readiness, while discomfort and insecurity are ‘inhibitors’ that reduce technology readiness (Parasuraman, 2000). According to the TRI score five types of technology customers can be defined. Explorers are high in optimism and innovativeness and low in discomfort and insecurity. Pioneers are high in all four, i.e. optimism, innovativeness, discomfort and insecurity. Skeptics are low in optimism, innovativeness, discomfort and insecurity. Paranoids are high in optimism, discomfort and insecurity, but low in innovativeness. Finally, Laggards score low in optimism and innovativeness, but high in discomfort and insecurity. This helps us in calculating a technology readiness index of a group of people. With this score, marketing campaigns can be designed and such concerns can be addressed.
Grove and Fisk (1983) developed the dramaturgical framework. It can also be extended to include technology, especially SST. In the framework and also generally, all the activities performed which are not visible to the customers are termed as backstage activities, like support functions which is not directly related to the production of the service. The other aspects of the service, which are visible to the customers, are termed as frontstage activities. But an extension is proposed, having a third construct, which is, the use of SSTs also implies a set of audience activities. (Meuter & Bitner, 1998) The characteristic of these activities are that these activities are performed solely by the customer and hence it is neither visible to the firm nor service providers.
Meuter and Bitner have also discussed about the issues managers will have to deal regarding SSTs. Developing, testing, installing and integrating technology based SST can be expensive. Hence it should have high benefits for firm and the customer both.
‘ Firm Benefits – cost savings, increased efficiency, in creased customer satisfaction and loyalty, standardization of services and differentiation thru the development of technological reputation
‘ Customer Benefits – time and cost savings, greater control over the service delivery, reduced waiting time, higher perceived level of customization, increased location benefits and the enjoyment from the use of technology.
Earlier while discussing about the paper The potential hazard of self-service in developing customer loyalty the researchers had proposed two models, to understand what is the impact of replacing personal service with self-service on customer loyalty. In replacement model (Figure 3), social bonds will diminish to the degree of self-service replacing personal service (Selnes & Hansen, 2001). This means that reducing the frequency of personal interaction due to the increase in frequency of usage of self-service will have an effect on the social bonds. When the customers use self-service, the interactions with the personnel reduce. The kind and friendly behavior are no more experienced, and so the feelings of obligation are cued less frequently. This results in weakening of the social bond. Secondly, as the customer performs a part of the service, the need for t he employees reduce and a number of services are acquired without any assistance. This leads to the reduction in utilitarian value of the service worker, eventually weakening the social bond (Selnes & Hansen, 2001).
In the second model in the same paper, called the hybrid model, the usage of personal service moderates the effect of self-service on social bonds (Selnes & Hansen, 2001). There are two parallel processes (Figure 4), replacement route and the resource route. Like in the replacement model, self-service will have a negative effect on social bonds. But self-service will have a positive effect on the social bonds through the resource route. The logic behind this is that the interaction for the simple routine processes will reduce because of the self-service, and the remaining personal interaction time will be dedicated to more demanding and special services. This helps in more deep and significant interactions and will have a stronger effect on the social bonds. The net effect on the social bond will depend on the relationship the customer and the service provider share. Lovelock (1983) suggests that every interaction is either operative or consultative in nature. The operative nature can be taken care of by the self-service and the consultative nature, which requires high involvement, can be done with the help of personal interaction. If the customers need operative assistance only, the service will take place through the replacement route only. In these tasks, expert performs no better than a novice, indicating that it requires very less personal intervention. Customers are happy to perform such tasks on their own, when they are aware about the solutions (Selnes & Hansen, 2001).
When customers need both operative and consultative assistance, the task is more complex. Here employee’s expertise will come into play. Here the social bond with an employee will be important as the resource becomes important and a high level of attention is required.
Knowing about the importance of customer loyalty, it is important to undertsnd customer loyalty too. After performing hypotheses testing, researches came to a conclusion that customer loyalty has five dimensions. They are explained as follows in context of a bank (Chris & Khan, 2012):
1. Trust
a. Bank is concerned with security of my transactions
b. Bank’s promises are reliable and is consistent with the quality of the service
c. Customers have confidence in bank’s service
2. Commitment
a. Bank makes adjustments to cater to my needs
b. Bank offers personalized services and is flexible in serving my needs
3. Communication
a. Bank provides timely and trustworthy information
b. Information provided by the bank is always accurate
4. Conflict handling
a. Bank tries to solve manifest conflicts before they create problems
b. Bank takes proactive steps and also negotiated whenever necessary
Service loyalty is defined as the degree to which a consumer is willing to use a service provider on a regular basis, possesses a positive attitudinal disposition towards this provider, and does not even consider using another service provider for this service (Gremler & & Brown, 1996). It is necessary to understand the loyalty nature also. Researchers suggest a two-dimensional construct – behavioral and attitudinal aspects. Attitudinal aspects deal with various feelings and emotions from an individual’s overall attachment with a product, service or organization, defining the degree of loyalty. Consumers must hold a positive attitude towards a product or service in order to use it on a frequent basis (Bove & Johnson, 2007). Behavioral aspects are related to the definition of loyalty, which is suggested by the service management literature. Research was conducted to establish a link between technology usage and loyalty, which will help in determining the attitude of the consumers towards the company. Surveys were conducted on a sample, which was as diverse as possible. By taking a diverse sample, randomization was taken care of. T-tests to check the difference in the means were conducted. After carrying out the statistical tests, the results of the analysis suggested that there is a connection between technology usage and technology-driven loyalty (Huettinger & Cubrinskas, 2011).
Researchers were able to conclude that customers reported a different attraction to companies, which offer the SST option. Those, who use SST, report being more attracted, than those, who use not. Furthermore, it was observed that customers with better attitude towards SST resulted in more usage and the user had a better attitude towards the company, which provides the service. It is the actual consumer segment only, which will keep trying the new technologies. This research helped to clear some misconceptions, which we would normally have when a new technology is being introduced. IT found out that education factor is not linear. It appeared that college and high schools students had different opinions, whereas university graduates were fond of SSTs. Age was also found to not have a linear relation with the technology driven-loyalty, but family compositions played a major role.
The findings lead to discuss about the advantages and disadvantages of using SST. Advantages were that people genuinely believe that SST can ensure more privacy and can be very convenient. Efforts should be made to make them believe in the design of the technology. One of the major drawback is it lacks numerous functions and the tag of ‘no consultation’ (Huettinger & Cubrinskas, 2011). Customers are concerned, ‘what if something goes wrong? There is no one to help me’. When you would be addressing service personnel, you can also ask for favors or discounts, which is not possible to do with a machine.
One of the proactive steps a service provider can take is to be ready with the solutions over SSTs concerns are if possible, make sure the failures do not occur at all. Some of the solutions are proposed over common SST concerns.
‘ Service Recovery ‘ The concern is when no firm employee is available to register a complaint or rectify in case of failure, which could be caused due to various reasons like technical breakdown.
Solution ‘ Develop and maintain the best system possible. Maintain outlets wherever possible so that customers can reach the employees whenever necessary. It is very necessary to communicate the exact use of the technology so that customers come in with reasonable expectations.
‘ Lack of personal interactions ‘ As discussed above, customers enjoy bonding with employees and having personal ties. Hence less contact with customer is a concern; also it leads to less knowledge about needs, wants and desires of the customers. The cross-selling opportunities are lost too
Solution ‘ The provider can maintain databases to understand the patterns of the customers and then provide them with customized solutions. Transactions through technology can also be made personal. Involving a sample of customers while designing the product can help to understand their needs better and cater them too.
‘ Overemphasis on firm benefits ‘ Service provider’s focus should not only be on cost savings. In this case it will lead to reduced customer orientation.
Solution ‘ The provider should not transfer all the services to SST. There is a need to maintain balanced approach.
There are few questions which we can ask, if we want to evaluate the self-servicing technologies. Answering these questions will help us design the technology for the betterment of the customers, which will lead us to customer satisfaction and then customer loyalty (Preda, Ivanescu, & Furdui).
‘ What are the customers seeking?
‘ What do customers expect from any service experience?
‘ What are the critical dimensions of service quality and customer satisfaction with SSTs?
‘ What internal reforms are needed to support the self-servicing technology?
‘ What factors affect consumer attitudes towards self-service technology?
‘ How much is the technology readiness factor of the target group?
‘ What are the costs and benefits related to SSTs?
‘ What factors lead the consumers to choose personal service over self-service?
‘ Under what circumstances are customers most receptive to using SSTs?
‘ What does service recovery mean and how can it be implemented? How can failures be communicated?
‘ How to develop trust in the absence of personal interaction?
‘ What is the role of the surrounding or the setting in facilitating service delivery and satisfying customers?
‘ Which self-service technology is most oftenly used and why?
‘ How should the message be conveyed to the customers regarding self-servicing technologies?
Implications for Global Business and Indian Industry
The research papers mentioned above had a useful conclusion, which can be applied in service industries. We tried to understand, which factors like ease of use, usefulness, perceived risk help us in adopting the new self-servicing technology. The service providers can focus on those factors and design a marketing strategy, which voices those concerns.
Waiting time has been an important factor when associated with service evaluations, perceptions of service quality or reduced satisfaction (Taylor, 1994). There is a very strong link between waiting time and customer satisfaction, however the relation is not linear (Kokkinou & Cranage, 2012). Hence, waiting time has been an important factor when it comes to measure the performance. Service providers have had various strategies, keeping all the constraints in mind, to reduce the waiting time and try not to annoy customers over it. More recent and cost-effective approach has been to use self-servicing technologies to reduce the waiting time (IBM, 2009). The simultaneous reduction of waiting-times and operating costs has been used by the self-service industry as a selling point for SSKs (Avery, 2008).
It is important to understand under which conditions the introduction of self-servicing technology in a service delivery process could reduce actual waiting-times and improve service levels. It was observed that waiting-times and service levels in a service industry like hotel check-in process, were influenced by number of resources available to the customers, the number of customers arriving to receive service, the processing speed of the self-service kiosk and the failure rate of the self- service kiosk (Kokkinou & Cranage, 2012). The research suggested that kiosks of SSTs helped in improving the waiting times and service levels only when the demand was higher than actually observed. This means that it will only help to improve the waiting times, when the service employees were not sufficient. Hence the SSTs should be installed not only when the demand is at its peak, but also when the demand is relatively higher than the number of available service employees. It is also important to notice that the speed of checking-in time using the kiosk and the failure rate of SST, are also the determinants of whether SST implementation will be able to reduce the waiting times. The processing time of the kiosk of SST will be impacted by several factors, including the skills and experiences of customers using the kiosks of SST, the design of the interface, and the number of options that will be offered to customers. While operations managers have little control over the skills and experience of customers, they can greatly improve these by making employees available to assist customers during the introduction of the SSK (Kokkinou & Cranage, 2012). These kiosks can be used for various uses like kiosks allow guests to receive messages, print additional room keys, and check and print their guest folio (Sheraton, 2004).
Retailers are also adopting SSTs to improve the quality of the service. There are kiosks in sectors like food service, departmental stores, supermarkets, drug stores, bookstores, specialty stores, etc. The examples of such kiosks are self-check out system, self-scanning device in supermarkets, to check the price, other kiosks can be designed to deliver products and/or store information and transaction services. Five key success factors to influence consumer commitment in retail sector are (Cho & Fiorito, 2010):
‘ Interface design ‘ interface should be easy to use and well designed
‘ Accessibility ‘ location of the kiosk should be visible and easy to access
‘ Promotion – stores should advertise about the presence and the use of the kiosk and also customers should be encourage to use it
‘ Fulfillment ‘ the kiosk should perform the required task quickly without any errors
‘ Employee readiness ‘ the employees should be trained, motivated and excited about the use of kiosk which will help in effectively serving the kiosk users
Kiosks can create a financial return only if the customers are satisfied are eager to return back and use the service. The five factors influence the satisfaction of the consumers, which will lead to commitment as shown in Figure 5.
Developing countries like Brazil, China, Malaysia, and India have started opening up and large retailers and other businesses have also realized that there is lot of potential, which can be explored. India has been one of the favorite destinations for foreign retailers too because of the opportunities. With the government approving foreign direct investment in retail, all the big giants like Wal-Mart Tesco are eyeing this market. In India, there is a high preference for belonging to a larger social network in which individuals are expected to act accordingly for the greater good of one’s defined group. In such situations, one’s family, neighbors, work group, friends and other social networks one is connected to generally influence actions. Indians have a medium level of technology anxiety and medium level of self-efficacy. At the same time group opinions will most likely influence the adoption of innovations such as SSTs. If the group of the society approves the service or the product, then there is a high probability that it will find wide spread acceptance.
Due to high level of social pressure, it is very essential for the service providers to design a product in such a way that it creates a positive social opinion regarding the benefits of such innovation. Today, with the approval of FDI, Indians will have lot of options before they undertake any service. They need to accept the technology and not hesitate to use it; they need to be a smart shopper now. From the research conducted by Deblina and Dr. Balaji ‘Indian consumers are definitely in a cultural dilemma regarding the acceptance of self service technologies in the retail settings. On one hand due to high masculinity they would like to adapt themselves according to various upgraded technology requirements but at the same time they are the people who would give preference to the social approval more than self. Also Indians are ready to compromise with any situation hence they don’t mind shopping in the conventional way even though they feel that using SST will enhance their shopping experience.’