Wednesday, December 14, 2005

Self Service Technologies and Customer Satisfaction

In my earlier writing, I had written about use of Self Service Technologies. Self Service Technologies (SST) are changing the way customers interact with companies. As a result we are seeing a whole lot of firms developing innovative SST with a hope that their customers are satisfied. Firms are experimenting with a wide range of SST, from web based banking to an atrocious self service restaurants. (Recall a Sinefiled episode where Krammer has this new idea for a Pizza restaurant - Restaurant where customers can make their own Pizza’s!!)

Many of these technology products fail in their primary objective: Customer Satisfaction.

In order for an SST to succeed in making customer’s happy, firms must learn and know what drives customer satisfaction. Or in other words answer the question "What is Customer Satisfaction?"

I went around asking people "Define Customer Satisfaction". I was amazed to find out that everyone thinks that they know what is satisfaction, but when asked for a definition nobody knows to define "customer satisfaction".

A formal definition of Customer Satisfaction is: "Satisfaction is the customer’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself. Provides a pleasurable level of consumption related experience"

In layman terms, satisfaction is the customer’s evaluation of a product or service in terms of whether that product or service has met their needs and expectations. Failure to meet the needs and expectations can then result in dissatisfaction with the product or service.

Customer Satisfaction in SST

In this article, I will explain what drives customer satisfaction when customer provides his/her own service with SST. To begin with, I will answer these questions:

  1. What are the sources of Customer Satisfaction and dissatisfaction in encounters involving SSTs?
  2. Are the sources of customer satisfaction and dissatisfaction with SST encounters similar to or different from interpersonal encounters?
  3. How does satisfaction or dissatisfaction with SST affect: Customer complaining, word-of-mouth campaigns and repurchase intentions?

Sources of Customer Satisfaction

Customer’s satisfaction is an outcome of the interaction between customer and the SST. If the outcome falls in the following category of results, the customer is always satisfied.

  1. Solved my Immediate Need

    The most satisfying encounter will occur when the SST in question provides an immediate relief to the customer’s most pressing problem. For example, Customer’s parent is sick & he needs to travel immediately. The online ticket booking helped the customer book a flight ticket and reach his destination. Another example: A customer needs cash immediately to meet a sudden expense - ATM solved the problem.

  2. Better than the Alternative

    The second most satisfying encounter happens when SST provides service which is better than the other alternatives. A good example is Fedex’s on-line package tracking system. Earlier there was no way a customer to track the package. The on-line tracking provides a benefit which was nonexistent before.

  3. Easy to Use

    If the SST is easy to use than the interpersonal service alternative, then SST leads to customer satisfaction. For example booking a ticket over the Internet is better than doing it over the phone for a Computer Savvy person.

  4. Avoid Service Personnel

    SST’s provide an alternative to customers who prefers to avoid customer service personnel for various reasons: Customer may have difficulty in talking in a particular language, may feel that salesperson is trying to sell something he/she does not need or customer is shy. DELL’s Online computer order is another classic example. Customers can configure their PC, know the price and order online. For many people, this is easier than interacting with the salesperson over the phone.

  5. Saves Time

    Most customers are satisfied when SST saves time. For a busy individual, time is precious. If SST saves time when compared to other alternatives, customers are satisfied. For example, getting a SMS alert when a bank check is cleared gives the required information to the customer - and customer does not have to spend time either logging online or calling the bank.

  6. When I want & Where I want

    Customers like to be serviced when they want and not when it can be provided. For example, many of us like to buy a book or something when we want to do so, and need not have to wait for the store to open. Amazon.com provides Internet based option to buy books any time - anywhere and is shipped to where ever the customer wants.

  7. Saves Money

    SST provides platform for customers to provide their own service. Therefore customer will be delighted if the service alternative from an SST is cheaper than the interpersonal alternative. For example, Online banking is offered for free of charge and the bank charges a small fee for using the services of a bank teller to check the account status. This will make customers move towards SSTs and avoid bank personnel.

  8. Did its Job

    Once the customer is used to providing his/her own service via SST, customer is satisfied when the SST did the job like expected. For example, if the banks ATMs work flawlessly all the time - and customer had no issues, then it leads to customer satisfaction.

Sources of Customer Dissatisfaction

Technology has to potential to agonize the customer and make the customer totally dissatisfied with the SST. Customer dissatisfaction arises from:

  1. Technology Failure

    SST is driven by technology and technology can (and in many circumstances will) fail. When SST fails to perform as expected, customers are dissatisfied.

    Typical examples are: Web server is down - thus customer cannot log in, or ATM machine is broke. Companies cannot do much in terms of service recovery when technology breaks down, however it can take steps to alleviate customer dissatisfaction by providing alternatives. For example providing a list of the nearest ATMs at all ATM locations or providing a telephone at the ATM booth so that the customer can use phone banking etc. In case of Web service related failure, the company can provide a phone number for the customer to call in and place an order or do an inquiry etc.

    Customers have become accustomed to some level of technology failure - but they expect the service provider to fix the problem at the earliest - if that happens, then the level of customer dissatisfaction is reduced. In the above example, if the bank fixes the ATM within few hours of failure or if the web site is back in operation within few hours, then customers not likely to hold it against the service provider. But if the ATM is not fixed even after one week - then the bank has lost the customer for good.

  2. Process Failure

    Process failure is an outcome of unintended consequences. Here the SST functioned but delivered a wrong result. To understand this, consider the following example: Customer logs in to Amazon.com and orders a book, the system records the order and gives an acknowledgment - but automated shipment processing machine sends the wrong book to the customer.

  3. Poor Design

    Designing an SST which meets the requirements of all customers is tough. Often there will be situations where the SST fails to meet the requirement of all the customers. Poor design manifests itself in two forms:


    a. Technology Design problem

    There are instances where the SST performed as it was designed to, but the technology performed in such a way that the customer was unhappy with the encounter. For example, Online Train Schedule information offered by Indian Railways - the system works the way it is designed, but for the user, it is almost impossible to read the train schedules - as all the data is presented in cryptic format.

    Technology design problems are most common in Web based services & in automated telephone systems. This happens because the persons designing the system do not use the system.


    b. Service design problem

    There are some instances where SSTs performed as they are designed to, but the design has a flaw. For example, an online bookseller who has not provided the option for the goods to be delivered to an address different than that of credit card holder’s address. Another common instance of this design flaw:- Web sites which provide you an option to retrieve your password, but it insists on you entering your old password (which you are trying to retrieve)

    In these cases, technology did not fail, the SST performed perfectly as per the design. But the design was flawed.

  4. Customer-Driven Failure

    For SST’s to work, customers have to be technology savvy. There are times when companies have moved to SST and have removed all other service options. When customers are not technology savvy, they get intimidated or annoyed - and dissatisfied with the SST.

    For Example, my father does not know how to use all the features in the cell phone and finds using the voice mail facility to be very challenging - as a result, he is dissatisfied with this new service.

Customer Reaction to SST

When customers interact with an SST - there will always be a reaction: sometimes positive, sometimes negative. Although the customers are creating their own service through SST, customers rarely blame themselves for any dissatisfying experience. Most customers are reluctant to complain about the faulty service but they are more than willing to spread the word around. This implies that companies which deploy SST must keep a close watch on customer’s reaction to a SST interaction.

I cannot recall a single incident when I have picked up the phone to tell the bank that their ATM is not working. But there has been several instances when I had recommended others not to use a particular service.

Closing thoughts

SST’s have come of age and are being used extensively. In the future - we will see several new forms of SST’s. Firms which are deploying SST’s must be careful not to alienate their customers through bad design/implementation of the technology. Service recovery with SST is difficult and challenging. Therefore SST’s must be deployed selectively and after intensive testing.

5 comments:

katty said...

The ultimate goal of customer satisfaction is increased revenue and customer retention.Customer satisfaction is the feeling that a product or service has met the customer expectation. Anyways, thanks for the good post!
Small Business Answering service

sample said...

Mind blowing! great to know..keep it up


Patient Satisfaction Survey Questionnaire

sampath said...

Dear Arun,
Whole thing is totally based on article written by Meuter et al,2000 appeared in Journal of Marketing. Isn't it so. Please find that article if it is not and if yes please put his name.

Inzinc Consulting India said...

Very informative and useful blog.
ISO 9001 Consultants in India and ISO 9001 Consultants in Bangalore

Olivia Princess said...

Do you mind updating your blog post with additional insight? It should be really useful for all of us.
check this out