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Service encounters are critical in all industries, including those that have not been traditionally defined as service industries. The increasing deployment of technology is altering the essence of service encounters formerly anchored in a "low-tech, high-touch" paradigm. This article explores the changing nature of service, with an emphasis on how encounters can be improved through the effective use oftechnology. The authors examine the ability oftechnology to effectively (1) customize service offerings, (2) recover from service failure, and (3) spontaneously delight customers. The infusion of technology is examined as an enabler of both employees and customers in efforts to achieve these three goals. Although the infusion of technology can lead to negative outcomes and may not be embraced by all customers, the focus of this article is on the benefits of thoughtfully managed and effectively implemented technology applications. Past research and industry examples are featured and future research directions and managerial implications are highlighted.
For many consumers, their primary experiences with firms are interactions with frontline employees. The importance of these encounters is substantial. Each day there are millions of encounters across companies and across industries. For example, one strategic business unit within IBM Canada projects has 70,000 service encounters with customers each day. PCS Health Systems, a pharmacy benefits provider, manages more than 1 million claims each day, interacting with both pharmacists and member customers. Both Disney and Federal Express manage millions of encounters daily. With the sheer number of these interactions and their relationship to important outcomes (e.g., satisfaction, loyalty, word of mouth, sales, and profitability), it is imperative to understand how to best manage service encounters.
Despite significant research aimed at understanding the dynamics of service encounters, the quality of services being provided to customers is not improving. In fact, over time, there has been a steady decline in the American Customer Satisfaction Index, due largely to decreasing satisfaction with services (Fornell, Johnson, Anderson, Cha, and Bryant 1996). In addition, a series of recent American Broadcasting Company (ABC) TV World News Tonight stories and popular-press articles have highlighted declines in customer perceptions of service (Leaf 1998; "Now Are You Satisfied?" 1998). These downward trends indicate there is still much to be learned about service encounters and how to satisfy customers during these...