SERVICE ENCOUNTER

Service Encounter



Table of Contents

Service Encounter3

Introduction3

Complaining behaviour4

Research methodology8

Results12

Attitudes towards complaining13

Reasons for not complaining14

Channel of complaining14

Cause of dissatisfaction15

Response rates17

Discussion17

Conclusions and Recommendations18

References23

Service Encounter

Introduction

In recent years, a growing number of technology-based services, such as Internet services, self-service machines and touch-phone services, have emerged. Thus, customers are increasingly interacting with self-service technologies (SSTs), technological interfaces that enable customers to produce a service independent of direct service employee involvement (Meuter et al., 2000). The emergence of SSTs has spurred a plethora of predictions of how technology will affect interactions between customers and service providers. One such prediction is that technology will facilitate customer complaints by offering new channels that reduce the time and effort required in the process (Brown, 1997; Shaffer, 1999; Tax and Brown, 1998). As barriers to complaints are lowered, the complaining frequency is expected to increase. Moreover, it is argued that the use of technological support to handle complaints will lead to more efficient service recovery systems (Brown, 1997; Tax and Brown, 1998). Few empirical studies, however, have explored how technology affects complaining behaviour, and if complaining rates are actually higher in technology-based services. Likewise, there is little empirical evidence on how technology alters firms' response frequency. In this paper, we address these questions by comparing complaining behaviour in dissatisfactory traditional- with technology-based service encounters.

The paper is structured as follows. The paper begins with a discussion of complaining behaviour and the factors that influence complaining. Thereafter, the discussion shifts to complaint handling procedures, followed by an outline of the research method and the sample. Drawing on 160 negative critical incidents within Finnish retail banking, we show that, contradictory to predictions, there are no significant differences in the complaining rates between the two types of service encounters. We attribute this finding to high reliance of traditional complaining methods in both types of service encounters. Also, when focusing on technology-based service encounters, we find that customers who actually consider themselves responsible for the outcome were the most frequent complainers, while those attributing the outcome to technology failures or service process failures complain less often. Thereafter, we turn to response handling and examine response frequency overall and across different types of service encounters and services and find that complaints about technology-based service encounters have significantly higher response rates than complaints about traditional service encounters. Finally, we suggest implications of our findings for service design managers.

Complaining behaviour

Customer satisfaction can lead to loyalty, goodwill, development of long-term relationships and profitability and thus, all companies should strive to create satisfaction (Blodgett et al., 1997, 1993; Reichheld and Sasser, 1990). Dissatisfaction, on the other hand, can result in complaining, negative word-of-mouth, or in the worst case, in the customer never returning again (Singh, 1990; Blodgett et al., 1995). When a dissatisfied consumer seeks redress, however, the service provider is given an opportunity to resolve the situation. A service provider can also learn from complaints how to prevent similar service failures in the future. Thus, customer complaints are essential for successful service recovery (Blodgett et ...