Customisation / Flexibility
Changing consumer needs in a modern world is evident, and with greater access to information and services than ever before there is inflation in customers’ general expectations of service quality (Sterne, 2001). Past research indicates that customers expect and demand customisation and flexibility in service encounters (Bettencourt & Gwinner, 1996; Bitner et al., 1990; Kelly 1993 cited in Bitner et al., 2000). Employees can adapt and customise ICT applications to serve customers better. Bitner et al., (2000) gives an example of AT&T’s (USA) customer sales and service employees using frontline support technology to customise service offerings. With these technologies, AT&T’s customer-service employees can, when a call is received: identify the caller immediately, access to the caller’s entire account history and greet the caller by name. Employees can then give quicker and more detailed responses to customers’ queries. According to Prabhaker & Sheehan (1997), technological features such as Automatic Number Identification (ANI) and Dialled Number Identification System (DNIS) permit the practice of advanced database marketing – which refers to the identification of the customer's purchase history, current needs, and other unique information that would even allow employees to offer new services to customers. These types of technology is revolutionising service encounters, and often “enhance the value of customers through speed, flexibility and accuracy” (Bitner et al., 2000 p143). Call-centre technology is also increasingly used in the financial services industry in the UK. Halifax Bank set up a call centre in 1995 to service the current account customers of Halifax Direct, its new telephone banking division, as well as to generate new business for the company. Within a year, the volume of business in Halifax Direct was phenomenal, and calls surged from 42000 in the first month to over half a million (Financial Times 1998, in Harrison, 2000).
Customisation can also occur when customers use technology to create services for themselves (Bitner et al., 2000). Consumers are increasingly experiencing SSTs in their everyday lives – services such as booking a flight on a travel agent / airline website, withdrawing cash from ATMs, accessing academic articles from university web-databases and self-service checkouts at supermarkets (Bitner, Ostrom & Meuter, 2002). An excellent example of SSTs, Amazon.com the online book store, is cited in much services and technology literature. Bitner et al., (2000) claims that Amazon.com has revolutionalised the image of online retail shopping. At the website, customers can key in keywords for any topic or book title and search Amazon.com’s huge database. Customers use an electronic “shopping cart” and can browse, read reviews of titles, and purchase the books through the Internet which will then be delivered to their homes. Customers are also given customised suggestions or advice in the form of recommendations based on their purchase history. FedEx, the shipping company, also provides its customers with SST opportunities. From order-taking to tracking and billing, every stage of the shipping process can be completed online (Bitner et al., 2000). The advantages are obvious: the SSTs can be accessed and transactions completed at anytime and anywhere the customers desire (Bitner et al., 2000), as these SSTs represent a “store that never closes” (Ritzer & Stillman, 2001).
Effective Service Recovery
Even with improved delivery and offerings, service encounters will never be totally successful (Bitner et al., 2000; Brown, 1997). Brown (1997) suggests that recovering from service failures, if conducted properly, strengthens customer loyalty, improves profitability and corrects weak links in processes. However, if the recovery is poorly handled, it can damage customer relationships, negative word of mouth, contribute to employee dissatisfaction and lowered profits. Studies by Johnson (1995) cited in (Bitner et al., 2000) have shown that successful service recoveries can lead directly to customer satisfaction, which in turn acts to retain the customer.
Brown (1997) claims that the use of technology in service recovery can empower employees and customers. Technology can often provide frontline employees with the means to recover on the customers’ behalf quicker, and often with fewer colleagues involved. In essence, the use of software applications and increased database accessibility can equip frontline employees with the necessary knowledge and information to interact with customers better and faster. In General Electric’s (GE) Answer Centre in the USA, service personnel has extensive access to customer and product data, enabling them to diagnose problems and resolve problems with speed (Bitner et al., 2000). In most companies with a web presence, customers are provided with technical assistance on “Help” pages. These applications empower customers to solve common problems through an intuitive web interface (Brown, 1997). If there is a need to, they can also send queries or complaints through email. For example, Vodafone’s UK customers can send emails to the customer service team online and be contacted via an email reply or a personal phone call. Although there are more channels to lodge complains, companies may find that it may be beneficial in the longer term. Bitner et al’s., article cites recent research that suggest complaints are necessary to institute a recovery effort (Chu et al., 1998; Lovelock, 1994; Tax & Brown, 1998). If there are no complaints, organisations may not be aware of problems that customers are facing and will not be able to change processes to improve service. It must be noted that in many situations, the source of the service failure can be the technology involved. This issue will be discussed in greater detail later in this essay.
Spontaneous Delight
According to Bitner et al., (2000), customers can also have satisfying service encounters when provided with a pleasant surprise. These pleasant experiences have been termed “spontaneous delight”. Technology is a key determinant for the third driver of service encounter satisfaction. One of the examples in the article is the hotel chain Ritz Carlton. Bitner et al., (2000) describes the hotel as using technology to delight customers from analysing its customer database. The hotel then identifies and anticipates customers’ needs from the database, and strives to provide world-class service. Common practices by top class hotels include remembering customer preferences such as types of meals, newspapers and activities. Another example given in the article, an insurance company in Cleveland, Ohio called Progressive Corp. owns a fleet of specially equipped vans that act as mobile offices to process claims immediately after motor accidents. When deployed, the agents help the clients to secure medical attention, repair shops and most of what is needed following an accident. The remote offices have comfortable chairs, mobile phones and cold drinks to calm the clients down as motor accidents are bound to be unnerving. As a result, Progressive Corp. has managed to excel in a competitive industry (Bitner et al., 2000). Technology aids this form of social support which enables customers to reduce uncertainty, improve self-esteem and generally improves service quality (Adelman, Ahuvia & Goodwin, 1994).
Problems and Challenges
Organisations can face many problems when implementing technology to improve customer service. Firstly there are reliability and performance issues related to the technology in question. Meuter et al., (2000) suggests some potential problems: (1) Technology Failure, (2) Process Failure, (3) Poor Design and (4) Customer-Driven Failure. Technology failure refers to instances when the technology is not working as intended, for example when there is a system breakdown such as an ATM that is not working, or server downtime at an online banking website. This can be frustrating for customers who have become dependent on the ability to access these portals and perform transactions at their discretion. Process failures happens when the technology functions as designed, but post-technology interaction issues such as billing or delivery errors occur. For example, a customer may not receive a product after paying for it online. Human error is usually the cause of the failure, such as a processing mistake made by an employee of the organisation. Brown (1997) recognises that there will be limitations on technology due to the human element inherent in some parts of the process. This can be disturbing for customers as they will not have the knowledge that the transaction was not performed properly until a later date, when the problem may have been more complicated. Poor design can also affect customer satisfaction levels, and are classified into technology design and service design problems. An example of poor technology design is unclear directions on internet applications, which may lead to instances where a registered user not knowing how to log off from a system. Poor service design problems refer to when the technology is functioning properly, but some aspects of the service that customers may not be fond of. Meuter et al., (2000) gives an example of this: a product purchased over the Internet with a credit card can only be delivered to the card holder’s address. While it may be for security purposes, it is ironic that the very technology that promises great flexibility can be so rigid at the same time. Customer-driven failure, as the term implies, refer to SST failure partially due to the customer. A customer who enters a wrong personal identification number (PIN) at an ATM may have his or her card retained by the machine, causing dissatisfaction to occur.
With new technology emerging everyday, there is a need for organisations to constantly train employees, especially those with service responsibilities, to upgrade their IT skills. Technical literacy of frontline employees is crucial to ensure smooth usage of software applications. Companies also need to understand the current technology landscape in context of their industry to be able to choose the most appropriate technology tools to meet challenges. All of these activities may result in a big strain on funds. Services performed over the Internet may also be subjected to risks of hackers hijacking and stealing sensitive material. The Internet’s greatest openness and ubiquity are also its greatest weaknesses. Companies need to assure customers that safety measures are in place before customers will feel ready to perform online transactions. The success of technology is therefore, also heavily dependent on user acceptance. According to Parasuraman, (2004), the “techno-readiness” of consumers refers to the measure of mental readiness to embrace technology. Without a proper understanding of the techno-readiness of its customer base, companies may just find themselves investing heavily in facilities that may be under-utilised.
Conclusion
This essay has shown why organisations need to focus on customer service as a source of competitive advantage, and technology is one of the major determinants in improving service quality. From the impacts identified, the integration and implementation of technology in customer service areas of a business are massively beneficial. Yet at the same time, organisations should be aware of the consequences that the lack of proper management of ICT can have.
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