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  • Production and Operations Management

Are Self-service Customers Satisfied or Stuck?

By: Ryan W. Buell, Dennis Campbell and Frances X. Frei
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Abstract

This paper investigates the impact of self-service technology (SST) usage on customer satisfaction and retention. Specifically, we disentangle the distinct effects of satisfaction and switching costs as drivers of retention among self-service customers. Our empirical analysis examines 26,924 multi-channel customers of a nationwide retail bank. We track each customer's channel usage, overall satisfaction, and retention over a 1-year period. We find that, relative to face-to-face service, customers who use self-service channels for a greater proportion of their transactions are either no more satisfied, or less satisfied with the service they receive, depending on the channel. However, we also find that these same customers are predictably less likely to defect to a competitor if they are heavily reliant on self-service channels characterized by high switching costs. Through a mediation model, we demonstrate that, when self-service usage promotes retention, it does so in a way that is consistent with switching costs. As a robustness check, we examine the behavior of channel enthusiasts, who concentrate transactions among specific channels. Relative to more diversified customers, we find that self-service enthusiasts in low switching cost channels defect with greater frequency, while self-service enthusiasts in high switching cost channels are retained with greater frequency.

Keywords

Service Delivery; Information Technology; Customer Satisfaction; Competition; Cost; Banks and Banking; Behavior; Market Transactions; Management Analysis, Tools, and Techniques

Citation

Buell, Ryan W., Dennis Campbell, and Frances X. Frei. "Are Self-service Customers Satisfied or Stuck?" Production and Operations Management 19, no. 6 (November–December 2010). (Awarded the Decision Sciences Institute Stan Hardy Award for Outstanding Paper Published during 2010 in the Field of Operations Management.)
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About The Authors

Ryan W. Buell

Technology and Operations Management
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Dennis Campbell

Accounting and Management
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Frances X. Frei

Technology and Operations Management
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More from the Authors
  • Taylor Guitars: Making Employee Ownership Work The Taylor Way By: Dennis Campbell, Petros Kusmu and Stacy Straaberg
  • Leaders Can Move Fast and Fix Things By: Frances X. Frei and Anne Morriss
  • Haidilao: Changing Your Future with Your Own Hands By: Yuan Zou and Dennis Campbell
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