See

discussions, stats, and author profiles for this publication at:

https://www.researchgate.net/publication/36381836

Self-Services in Customer
Relationships: Balancing High-Tech
and High-Touch Today and Tomorrow

Article in e-Service Journal · January 2006

DOI: 10.2979/ESJ.2006.4.2.65 · Source: OAI

CITATIONS READS

41 293

3 authors, including:

Walter Brenner
University of St.Gallen
440 PUBLICATIONS 3,238 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Projektübergreifendes Applikationsmanagement – Der strategische

Applikationslebenszyklus am Beispiel des BMW Q-Cockpit View project

All content following this page was uploaded by Walter Brenner on 22 July 2015.

The user has requested enhancement of the downloaded file.

 Self-Services in Customer
Relationships: Balancing
High-Tech and High-Touch
Today and Tomorrow
Harald Salomann
University of St. Gallen

Lutz Kolbe
University of St. Gallen

Walter Brenner
University of St. Gallen

ABSTRACT
Self-services in customer relationships are becoming increasingly important—a development
that has been boosted by customers’ increasing and diverse use of the Internet. Banks have, for
example, created online-only products and airlines offer special discounts for passengers book-
ing online. This paper approaches self-services from three directions. Firstly, a chronological
review of the literature in this field is provided in order to get an idea of how scholars address
the self-service phenomenon. Secondly, based on these theoretical foundations, we discuss
today’s self-service activities by presenting the results of a study that we conducted. We identify
the balancing of high-tech and high-touch as today’s key challenge to self-service systems.
Finally, we propose three trends that we expect to be incorporated into the next generation of
self-services. These trends are geared towards achieving a balance between high-tech and high-
touch. They encompass the integration of self-services with traditional customer touchpoints,
the use of voice-based technologies, and the deployment of persona design in the development
of self-service applications.
Keywords: Self-service, Self-service technology, Customer interaction, Service management.

© 2006. e-Service Journal. All rights reserved. No copies of this work may be distributed
in print or electronically without express written permission from Indiana University Press. 65
 e-Service Journal

INTRODUCTION
In 1916, Clarence Saunders triggered a retail avalanche that would revolutionize the way
services are carried out forever. He founded the world’s first self-service grocery store,
called Piggly Wiggly, in Memphis, Tennessee. It was unlike any other grocery store of
that time in which the usual procedure was for shoppers to present their orders to the
clerk. The clerk then gathered the goods for the shopper and handed them over. Saunders
recognized that the customer was an untapped resource. He came up with an idea
unheard of before: customers had to serve themselves! Soon after the launch of the first
self-service store, Saunders patented his self-service format and issued franchises to hun-
dreds of grocery retailers to run Piggly Wiggly stores. Today, more than 600 Piggly Wiggly
stores are run in the U.S.
The self-service concept is very simple: customers themselves perform tasks that
were once done for them by others. The crux of Saunders’s idea is reducing the high-
touch and physical proximity prevalent in services. The self-service format evolved over
time, as did the degree of automation and the level of technology infused into customer
relationships. Nowadays, the combination of self-service and technology is believed “to
transform the service economy in much the same way that mass production transformed
manufacturing, by allowing services to be delivered at low cost in large volumes” (Econ-
omist, 2004). Self-service technologies’ practical applications demonstrate this
approach’s potential. For example, Amtrak introduced telephone self-service by means of
an IVR (Interactive Voice Response) system that allowed cost savings of $13 million;
likewise, Royal Mail’s IVR system led to a 25% reduction in its customer service costs
(Economist, 2004).
The advent of the Internet has further boosted the prominence of self-service in
customer relationships. Banks have created online-only products and airlines offer special
discounts for passengers booking online. Companies like Amazon.com or Dell harness
the Internet to break down the barriers of time and space by offering customers their ser-
vices 24/7 and on a global scale without having a single physical facility.
On the other hand, the substitution of human contact with self-service technology
is not always as successful as expected. A study conducted by the market research com-
pany Forrester, in which 110 large companies were surveyed, shows that IVR systems
meet customers’ needs only 18% of the time, which is less than any other type of
customer contact (Temkin, Manning, Sonderegger and Amato, 2004). A study by
Accenture, a global consultancy firm, that examined the use of self-service in the telecom-
munications industry, found that consumers consider telephone self-service as time con-
suming, confusing, and impersonal (Accenture, 2004).
Although the above facts are indubitably somewhat contradicting, they are never-
theless interesting. They point to the huge potential, but also to the great dangers, of the

66
Self-Services in Customer Relationships

self-service approach. The question that arises is: what differentiates the winners from the
losers in the self-service arena? We have been studying success and failure in the self-
services area since the mid-1990s. Based on our research findings, we argue that the bal-
ance between high-tech and high-touch in customer relationships is the key challenge
faced by the self-service domain. In this article, we present practical examples of how to
achieve this balance. Furthermore, our research seeks to identify emerging trends and to
analyze the factors that will drive the infusion of self-service technology into customer
relationships in the future.
The next section reviews the literature related to the domain of self-services in
order to lay the required conceptual foundations. The subsequent section presents a dis-
cussion of self-services’ actual status quo in customer relationships. This analysis is pri-
marily based on a survey conducted among CRM (Customer Relationship Management)
executives of renowned companies in German-speaking countries. Based on our research
results, we then provide an outlook regarding the trends and future challenges in the area
of self-service. The article concludes by highlighting the limitations of as well as the con-
tributions to further research following from this effort.

CURRENT PERSPECTIVES ON SELF-SERVICE

Although Saunders invented the self-service format in 1916, it took more than fifty years
before scholars acknowledged and addressed this phenomenon. The literature on self-
services tends to cluster around two central themes: the customer and technology.

Customer-Centric View

Undoubtedly, the aspect discussed most by scholars is the role of the customer in a self-
service system. In 1970, Alvin Toffler, an American writer and futurist, analyzed custom-
ers’ joint role as producers and consumers for the first time. He labeled this development
“prosuming” (consisting of the terms “producing” and “consuming”) and defined it as
the involvement of the customer “in tasks once done for her or him by others” (Toffler,
1970). In his following works, Toffler differentiated two types of production systems:
“relieving” and “prosuming + enabler.” Relieving represents the traditional approach in
which the producer performs all the tasks, while in prosuming + enabler, the tasks are car-
ried out by prosumers using enablers offered by the producer.
Almost ten years later, in 1978, Richard B. Chase contributed to self-service theory
by asking: “Where does the customer fit in a service organization?” (Chase, 1978). Chase
classified service systems into high-contact and low-contact according to the degree of
customer interaction required by the service. Chase subsequently made recommenda-
tions regarding service designs based on his categorization of service systems.

67
 e-Service Journal

One year later, Lovelock and Young also examined the role of the customer by tak-
ing a different view. They argued that the outsourcing of activities usually carried out by
the company for customers is a means with which to increase a company’s overall profit-
ability (Lovelock and Young, 1979).
Another significant work that advanced knowledge in the self-service domain was
delivered by Bateson in 1985 (Bateson, 1985). In an exploratory study, he profiled the
self-service consumer. The study analyzed consumers’ decision process when faced with
a choice between a self-service option and a traditional service delivery system. Bateson’s
research maintained that the decision in favor of or against self-service depended more on
the individual person than on external factors such as monetary incentives. The decision
criteria that are most important are the individual’s perception of the time that the service
takes and his/her control of the situation.
In 1986, Mills and Morris discussed the client’s role as a service organization’s “par-
tial” employees. Mills and Morris maintained that in a service setting, the customer and
service provider could share the production responsibilities (Mills and Morris, 1986).
Building on this argument, Bowers and his colleagues maintained that treating
employees as customers, and customers as employees, enhances overall system productiv-
ity (Bowers, Martin and Luker, 1990). Employees can be treated as customers by means
of internal marketing, whereas training and reward systems are instruments that allow
customers to be treated as employees.
Wikström also alludes to Mills and Morris’s description of the client as a partial
employee (Wikström, 1996). Going a step further, Wikström refers to the customer not as
a co-worker, but as a co-producer who is part of a type of joint venture in the marketplace.
Prahalad and Ramaswamy extend Wikström’s concept by referring to the customer
not only as a co-producer, but as a co-creator of value (Prahalad and Ramaswamy, 2000).
They argue that customers (especially with the help of the Internet) step out of their tra-
ditional roles and become part of an enhanced network enabling them to act as compa-
nies’ collaborators, co-developers, and even competitors.

Technology-Centric View

A second prevalent theme in the literature is the focus on technology infusion into cus-
tomer relationships as part of the self-service format. In recent years, the shift from high-
touch (e.g., withdrawal requests handled by a bank teller) to high-tech (e.g., withdrawing
cash from automated teller machines) as a feature of the self-service approach, has specif-
ically occupied scholars’ attention. This development is reflected by the increased usage
of the terms “technology-based self-service” (TBSS) (Dabholkar, 1996) and “self-service
technology” (SST) (Bitner, Ostrom and Meuter, 2002).
In the literature, technology is considered an enabler of self-services by providing

68
Self-Services in Customer Relationships

interfaces for interaction with the consumer. Meuter and his colleagues suggest that self-
service interfaces can be categorized into the following (Meuter, Ostrom, Roundtree
and Bitner, 2000):
• Internet, e.g., online payment of a bill,
• voice/telephone, e.g., telephone self-service by means of an IVR system,
• automat, e.g., withdrawing cash from an ATM, and
• video/CD, e.g., video- and TV-based training for customers.
In a recent study, Curran and Meuter compare the following three self-service tech-
nologies: automated teller machine (ATM), telephone banking, and online banking
(Curran and Meuter, 2005). Their research provides evidence that a variety of different
factors influence attitudes toward each of these technologies. The most important factor
for the general acceptance of a self-service technology is, however, ease of use. Other fac-
tors that also drive people’s attitudes are usefulness, risk, and the need for interaction with
bank personnel.
In general, the main focus of technology-centric literature is the examination of how to
successfully implement self-service technologies in customer relationships. In this context,
success is very often the result of a combined measure that takes customer satisfaction, cus-
tomers’ complaint behavior, word of mouth, and repeat purchase intentions into account.
Our literature review shows that current self-service theory is heterogeneous (see
also Table 1. A chronological review of the literature on self-services in customer relation-
ships). A single phenomenon has been termed self-service, prosuming, co-production
and co-creation, to name just a few. These terms also reflect the subject’s evolution over
time. Based on this literature review, the following section discusses the current status
quo of self-services in customer relationships.

STATUS QUO OF SELF-SERVICES IN CUSTOMER RELATIONSHIPS

Research Method
In order to examine the current status quo and future challenges in the CRM area, we con-
ducted a survey of the opinions of CRM executives of renowned companies in German-
speaking countries. Within the scope of this survey, we paid particular attention to CRM
initiatives’ critical success factors and common pitfalls. In addition to a more general CRM
section, the survey also included a section that was specifically dedicated to self-services in
customer relationships. This section’s overall goal was to identify and document the actual
status quo in the self-service domain. The study was explorative in nature and aimed at
prompting the right questions. In order to address these objectives, a questionnaire, aimed
at eliciting a detailed description of the current activities in the self-service domain, was
developed specifically for this focus topic’s requirements. The literature review presented
in the previous section also served as a basis of the survey’s questionnaire.

69
 e-Service Journal

Table 1. A chronological review of the literature on self-services in customer

relationships
Author(s) and Year Main Focus Findings and Conclusions
Toffler 1970 Customer Analyzes customers’ joint role as producers and consumers. Labels
this development ‘prosuming’. Defines this as the customer’s
involvement in tasks once done for her or him by others.
Chase 1978 Customer Classifies service systems into high-contact and low-contact
depending on the extent of the customer interaction required by
the service. Argues that the less direct contact the customer has,
the greater the chance to develop an effective service operation.
Lovelock and Young Customer Argue that consumer behavior itself is critical for services’
1979 productivity, because customers are involved in the production
process. Increasing productivity therefore requires changing
consumer behavior.
Bateson 1985 Customer Profiles the self-service consumer in an exploratory study. The
decision in favor of or against self-services depends on the
individual person. The most important decision criteria are the
individual’s perception of the time the service takes and his/her
control of the situation.
Mills and Morris Customer Discuss the role of clients as partial employees of service
1986 organizations. Maintain that customers and service providers can
share production responsibilities.
Bowers, Martin and Customer Present the idea of treating employees as customers and customers
Luker 1990 as employers. Employees can be treated as customers by means of
internal marketing. Customers can be treated as employees by
means training and rewards.
Dabholkar 1996 Technology Argues that increasing labor cost and technological advances are
the drivers for offering customers technology-based self-services.
Wikström 1996 Customer Refers to the customer as a co-producer who is part of a joint
venture in the marketplace. The customer benefits most, but there
is also potential for companies to achieve strategic advantages.
Meuter, Ostrom, Technology Focus on customer interactions with technology-based self-service
Roundtree and delivery options. The analyzed factors include customers’
Bitner 2000 complaint behavior, word of mouth, and repeat purchase
intentions.
Prahalad and Customer Discuss customers’ changing role from passive audience to active
Ramaswamy 2000 actors. They become part of an enhanced network enabling them
to act as companies’ collaborators, co-developers, and even
competitors.
Bitner, Ostrom and Technology Argue that implementing self-service technologies is very often
Meuter 2002 more difficult than companies initially realize. Identify factors that
impact customer satisfaction and dissatisfaction with self-service
technologies.
Curran and Meuter Technology Compare three self-service technologies: ATM, telephonic
2005 banking and online banking. Provide evidence that a variety of
different factors influence attitudes toward each of these
technologies. The most important factor for the general
acceptance of a self-service technology is ease of use.

70
Self-Services in Customer Relationships

The survey was carried out in the second half of 2004. One thousand executives in
the German-speaking countries (i.e., Germany, Austria, and Switzerland), who are in
charge of their companies’ CRM activities, were invited to participate. An individually
addressed email invitation explained the purpose of the research and included a link to
the survey’s online platform. This approach eventually yielded a total of 89 responses in
respect of the general CRM study, equaling a return rate of approximately 9%. Of the 89
respondents, 44 actually utilize self-services. The details described in the following only
refer to the survey’s self-service part.

Survey Demographics

Those survey participants who offer their customers self-services belong to a variety of
different industries. The industry represented most often is “Banking/Financial Services”
at 39%, followed by “Insurance” (20%) and “Telecommunications” (11%). The major-
ity of the participating companies (i.e., 26 of the 44) are located in Germany. Fourteen
companies are based in Switzerland and four firms are from Austria.
The respondents are mainly representatives of large-scale enterprises in terms of
number of employees as well as turnover per year (see Table 2. Survey demographics). The
majority of the companies (approximately 68%) participating in the survey have a turn-
over of more than EUR 1 billion, with only eight companies having less. About 34% of the
polled companies have between 1,500 and 5,000 employees, 20% have between 5,000
and 30,000 employees, and another 20% even stated having more than 30,000 employees.
This survey’s focus is therefore directed more towards major enterprises than small and
medium-sized businesses.

Discussion of the Status Quo

In the following, we will present and discuss current self-service activities as based on our
survey’s results (the percentages presented have been rounded off ). A summary of the key
results is also provided in Table 3. Status quo of self-services in customer relationships.

Table 2. Survey demographics

71
 e-Service Journal

Motivation for Introduction. Companies mentioned cost reduction most often when
asked about their motivation for introducing self-services into customer relationships. This
is the goal of 86% of the surveyed companies, which highlights companies’ widespread
belief that self-service is an efficiency tool that facilitates processes’ streamlining through the
elimination of media conversions and the reduction of idle time. Seventy-seven per cent of
the companies in our survey maintained that they were motivated to use self-services in
order to increase customer satisfaction and loyalty. In contrast, only 32% of the companies
stated that they deployed SST in order to reach new customer segments.

Organizational Alignment. Many companies (i.e., 55%) refer to their self-services as

separate, divisional, or channel-specific initiatives. Similarly, 20% of the companies
described their self-service activities as individual projects without any interaction with
others. Only 25% of the firms initiate coordinated, enterprise-wide self-service projects.
Our research shows that, on the organizational level, an integrated approach towards self-
service activities is the exception rather than the rule.

Scope. The survey results show that self-services are most often used in transactions and
customer service areas. Seventy per cent of the polled firms stated that they provide self-
services in order to support transactions with an individual customer (e.g., online track-
ing and tracing of a customer’s order status). Sixty-six per cent of the companies utilize
SST in respect of customer services that are, one way or another, related to supporting the
company’s core product (e.g., a Web site providing information on product use). The use
of self-services for educational purposes, such as e-learning, is ranked last with only 39%
of the companies listing this as their goal.

Deployed Technology. As already pointed out, the application of technology is a typical

characteristic of self-service systems. The survey’s results indicate that Internet technol-
ogy plays a key role within the self-services context. Almost all companies (i.e. 96%)
maintained that they utilize the Internet as an interface for offering their customers self-
services. According to our survey, popular applications of this SST are in the form of
FAQs (Frequently Asked Questions) on Web sites and online tracking and tracing ser-
vices to monitor an order’s status. A telephone/voice interface is ranked second in respect
of preferred SSTs. Exactly 50% of the firms participating in the survey use telephone self-
services, with fax-on-demand, IVR, and voice recognition technologies being those most
frequently mentioned. Only 32% of the companies utilize interactive kiosks as an SST.
This result emphasizes the fact that the usage of kiosks in service management is decreas-
ing due to the popularity and diffusion of Internet technology in recent years. Lastly,
16% of the polled companies use video/CD technology in the context of self-service

72
Self-Services in Customer Relationships

Table 3. Status quo of self-services in customer relationships

Organizational Divisional, channel- Enterprise-wide Single project
alignment specific program of projects
Ranking 1 2 3
(Percentage) (55%) (25%) (20%)
Motivation for Cost reduction Increase customer Reach new customer
introduction satisfaction and loyalty segments
Ranking 1 2 3
(Percentage) (86%) (77%) (32%)
Scope Transactions Customer service Education
Ranking 1 2 3
(Percentage) (71%) (66%) (39%)
Deployed Internet Telephone Interactive Kiosks Video/CD
technology
Ranking 1 2 3 4
(Percentage) (96%) (50%) (23%) (16%)

offerings. Video and TV-based training for customers is a common application of this
self-service interface.

Benefits and Shortcomings. The majority of companies (i.e., 84%) mention the realiza-
tion of cost reductions as self-services’ biggest benefit. The reduction of process cycle
time is almost as important as cost savings. This benefit was named by 36 of the 44 com-
panies (equaling 82%). Furthermore, the elimination of media conversion is regarded as
yet another benefit by 43% of the companies. These results underpin the prevalent argu-
ment that efficiency gains in terms of time and money are SST’s main advantages. How-
ever, 25% of the companies mentioned other advantages. These comprise aspects such as
an increased freedom of choice for customers, generation of leads, identification of pros-
pects, and the positioning of the company as an innovation leader. These benefits dem-
onstrate that self-service is not only about reducing time and costs. It is also about
enhancing a company’s options with regard to aspects such as, for example, strategy
(“innovation leader”), service delivery and customer experience (“increased freedom of
choice for customers,” ”intuitive user interface”) as well as the development of customer
relationships (“opportunity to generate additional leads”).
As far as the shortcomings of SST are concerned, 30 of the 44 companies (equaling
about 68%) mentioned customers’ lack of acceptance of SST as the main shortcoming.
They also cited the causes of this lack of acceptance as based on their experiences. The
shifting of tasks to customers that were formerly carried out by the company was men-
tioned as one reason. Many customers are not willing to accept this shift of tasks.
Consequently, they refuse to make use of SST. Another frequently mentioned reason is
that self-services usually only appeal to a certain, tech-savvy customer segment. Although
self-services should have an intuitive interface, they very often do not. Customers, who

73
 e-Service Journal

lack the necessary knowledge and experience, perceive SST environments as complex and
they experience stress. Another disadvantage closely related to insufficient acceptance is
the lack of personal contact with customers, which results in weak social bonds. This
shortcoming was mentioned by 24 companies, equaling 55%. A further consequence of
this lack of personal contact is the severely limited advisory service. Since there is no advi-
sory service in self-service interactions, it is almost impossible to identify the same degree
of cross- and up-selling potential that would be possible in a face-to-face meeting. Fur-
thermore, it is noteworthy that 11 companies (i.e., 25%) indicated that they found the
investments required by self-services too high. This refers to the strong use of technology
in self-service scenarios, which results in high initial and operational costs.

Key Challenge. Because self-services’ strengths are simultaneously their main weak-
nesses, SST is a double-edged sword for companies that are unable to find the right bal-
ance between high-tech and high-touch. On the one hand, utilization of SST makes
tremendous cost savings possible. The downsides of service automation are, however, a
lack of customer acceptance, weak social bonds, and losing personal contact and client
control. Nevertheless, we argue that excellent self-service can be provided by organiza-
tions that understand the limits and benefits of technological developments. The balanc-
ing of high-tech and high-touch in customer relationships will therefore be companies’
key challenge in future. The following section provides an outlook on how companies
can successfully achieve this balance.

A LOOK INTO THE FUTURE

Our survey identified the balance of high-tech and high-touch as the key challenge in the
self-service arena. Over a decade, we have also studied success and failure in this area and
worked in close collaboration with research partners from practice, all of which provided
us with valuable insight into self-service. Based on our research, we present three require-
ments that we consider crucial for achieving the aforementioned balance between high-
tech and high-touch. Each of the requirements is underpinned by a few mini cases that
exemplify innovative approaches and provide a glimpse into the future self-services.

Integration of Self-Services with Traditional Customer Touchpoints

A critical success factor that has to be considered during self-service design is the integra-
tion of self-service systems into traditional channels. In many companies, the self-service
channel is seen as a threat to established channels. An example was Ford’s plan to sell cars
directly to customers via its Web site, which provoked an outcry among its dealer net-
work (Gilbert and Bacheldor, 2000). Ford eventually relinquished this idea and instead
developed a program, called Internet Approved, in collaboration with its dealers. Dealers

74
Self-Services in Customer Relationships

participating in this program have to undergo extensive Internet training as well as hav-
ing a dedicated Internet manager to assist customers with their Web research. This inte-
gration of online and offline operations is necessary, because currently more than 80% of
Ford’s customers browse the company’s Web site before entering a dealer’s showroom
(Economist, 2005). This example furthermore shows that providing consistent informa-
tion across all customer touchpoints is of crucial importance in order to avoid sending
customers mixed messages.
This assertion is underpinned by our survey that shows that the majority of com-
panies refer to self-services as separate, divisional, or channel-specific initiatives. How-
ever, if companies want to achieve a balance between high-tech and high-touch in the
future, integrating their online and offline activities is of crucial importance. We argue
that successful companies plug the self-service channel into the existing business architec-
ture rather than treating it as a substitute for other channels. The following cases support
our argumentation.

Orchestration of Self-Service Activities at Office Depot. When founded in 1986, Office

Depot started out as a traditional brick-and-mortar company. Currently, Office Depot
conducts about 60% of its delivery business via the Web (Bock, 2004). The company was
even ranked first of the “Top 100 Electronic Business Innovators” by InformationWeek
(InformationWeek, 1999). Neither Staples nor Office Max, which are Office Depot’s
closest competitors, made this list. This raises the question: where does Office Depot’s
success lie?
Part of the answer is that Office Depot excels at orchestrating its online and offline
self-service activities, thus beating its competitors. Customers can access the Web site
from their homes, but can also use in-store kiosks to browse online offerings. This is a
very effective way to create attention for the Web site and to simultaneously help custom-
ers become accustomed to self-services. If customers have a question concerning the Web
site, they can immediately ask a sales clerk for help. Both the high-touch of the traditional
superstore and the high-tech of the Web site can consequently be tremendously lever-
aged. Office Depot also offers a service that allows customers to pick up office supplies
that have been ordered online at a near-by superstore. This is yet another example of the
effective combination of traditional and self-service channels. It decreases delivery times
and customers have the freedom to pick up their office supplies when this is convenient
for them, instead of waiting at home for the delivery.

‘Title Sleuth’ at Borders. Similar to the Office Depot’s orchestration of offline and online
activities, Borders uses a convergence model, called Title Sleuth, that also integrates shelf-
space and cyberspace. A total of more than 1,000 in-store kiosks makes Title Sleuth one
of the largest self-service kiosk applications in the retail industry. Customers can use the

75
 e-Service Journal

in-store kiosks to access over 3 million books (compared to the 150,000 books that are
usually stocked) via a database-driven search engine that is also linked to the inventory
system. If customers cannot find a book, they can use the search engine to ascertain the
book’s delivery time to the store. They can also check whether the book is in stock at
another Borders store in the vicinity. Online customers can likewise access Borders’ Web
site from home to check the availability of a title at a certain Borders store. If the item is
available, customers can reserve the book online for in-store collecting. They can also
place an order via borders.com (which is operated in collaboration with Amazon.com)
and the ordered items will be delivered to their homes.

Conclusion. We argue that companies have to integrate their self-service activities with
traditional customer touchpoints in order to balance high-tech and high-touch in cus-
tomer relationships. The mini cases that we presented show that complementing the self-
service channel with traditional customer touchpoints is mission-critical. The examples
provided by Office Depot and Borders show how innovative companies have been able
to successfully integrate customer self-service with their traditional businesses.

“Hello, it’s me!”—Voice as the Future User Interface

Today’s self-service offerings are mainly seen as cost-cutting instruments. This statement
is underpinned by our survey’s results. Too often the customer experience, which should
be the focus of attention, is ignored. A bad customer experience is in many cases caused
by self-service user interfaces’ poor design. Curran and Meuter discovered that ease of use
is the most important factor for a self-service technology’s general acceptance (Curran
and Meuter, 2005).
A typical example of a poorly designed user interface is the widespread use of
touchtone IVR systems in the context of call center hotlines. Callers have to punch in a
series of endless numbers on a DTMF (Dual Tone Multi Frequency) keypad and follow
instructions like “Press ‘1’ for this and ‘2’ for that” to perform a certain action. This type
of self-service interface has more advantages for the company than for the customer:
• Companies can grow their bottom line by replacing expensive call center agents
with IVR technology.
• Simultaneously they avoid having the call center answer standard enquiries
because these are handled by the IVR system.
• Internal processes can furthermore be streamlined by improving the routing of
calls. For example, incoming calls can be categorized according to the type of
enquiry (e.g., “Push ‘1’ if you have a complaint, …”), or type of product (e.g.,
“Push ‘2’ if you have a question with regard to product 4711, …”). This ensures that
incoming calls are directed to the relevant agent.

76
Self-Services in Customer Relationships

In light of the above benefits, the use of touchtone IVR systems makes a lot of sense
from a company’s point of view. A look at the customer experience tells a different story.
The main benefit for customers is that they are usually immediately connected to the IVR
and do not have to wait for a call center agent to answer their call. This is, however, the
only benefit for customers. Recent studies have revealed that customers are very annoyed
when encountering telephone self-service and touchtone IVRs (e.g., Genesys, 2004; Cur-
ran and Meuter, 2005). This is due to the confusion caused by too many menu options,
the time it takes to listen to these options and the lack of personal contact. Our survey also
identified the latter as a key inhibitor of self-services. Having thoroughly analyzed today’s
self-service user interfaces as part of our research, we argue that the memorization of num-
bers, passwords, menu commands, and action sequences causes the user cognitive stress
and makes many of today’s self-service applications inflexible and counterintuitive.

Automatic Speech Recognition. In the light of current user interfaces’ pitfalls, our research
indicates that customer self-services’ future input devices will no longer be limited to a
mouse or a keypad, but will increasingly include voice and speech. If speech is regarded from
an evolutionary perspective, it can be concluded that there is no user interface available that
is more natural than speech. The evolution of homo sapiens clearly indicates that no human
ability is more pronounced than the recognition and production of speech. For example, an
IQ score as low as 50 is still sufficient to fully comprehend and speak at a competent level
(Slobin, 1979). These aspects draw significant attention to a technology called automatic
speech recognition (ASR) that has the potential to revolutionize the way self-services are car-
ried out today. In short, ASR is a speech-processing technology that is able to recognize what
a person is saying and to transform speech into commands that can be processed by a
machine. A recent study of companies that replaced their IVRs with ASR solutions shows
that in 54% of the cases customer satisfaction improved, while 12% of the companies
reported that customer satisfaction improved dramatically (Genesys, 2004). However, the
applications of this technology are not just limited to being a substitute for IVR. Voice por-
tals built upon this technology can complement, or even replace, today’s graphical browser
interfaces whenever speech-enabled access to Web-based information is necessary. This
allows the portal concept to be combined with a more natural access method, such as speech,
to browse information in a more flexible and personal manner. And the main benefit of this
system: customers like it! An example of a successful implementation of ASR technology is
Office Depot’s voice portal. This solution allowed Office Depot to decrease a single call’s
cost by 87% while simultaneously improving customer satisfaction (Easton, 2002). Another
innovative approach at Amtrak is briefly outlined in the following section.

ASR at Amtrak. By dialing 1-800-USA-RAIL, customers within the U.S. can contact
Amtrak’s ASR system. In 2001, this rail transportation company replaced its touchtone

77
 e-Service Journal

IVR with a speech recognition solution, mainly because customers had been dissatisfied
with punching in an endless series of numbers. Amtrak had therefore decided to invest
approximately $4 million to develop a new ASR solution (Bradbury, 2004).
At the beginning, the system had somewhat limited functions: it was only able to
answer questions about train status, reservations, fares, and arrival and departure times.
In 2002, the solution was enhanced to process online bookings, including payment.
Instead of following instructions, customers can now answer questions in natural lan-
guage. Although the technology has been proven, misunderstandings can still happen. In
such a case, the system is designed to behave like a human by sounding and acting as life-
like as possible. It apologizes by saying, “I’m sorry, I didn’t get that,” and is programmed to
sound stressed out every time it misunderstands a command.
Today, approximately 5 million calls are handled by the ASR solution, which rep-
resents a quarter of Amtrak’s annual call volume. This level of automation allows Amtrak
to save around $13 million per year, and the system started delivering returns on its
investment within 18 months after its introduction. A survey conducted by Amtrak
revealed that more than 90% of callers are satisfied with the ASR system.

Voice Biometrics. It is also possible to go one step further by applying voice-biometrics-

based technologies to customer relationships. Since voice is a unique characteristic that
differentiates one person from another (just like a fingerprint), voice biometrics can use
a person’s voice characteristics to verify a speaker’s identity. There are three ways to ascer-
tain a person’s identity:
• What you have (e.g., a key),
• what you know (e.g., a password), and
• who you are (e.g., a voiceprint).
In recent years, we have seen an increased deployment of biometrics-based solu-
tions, driven mainly by public authorities in response to the dangers of global terrorism
(e.g., the U.S. government’s plans to require biometric passports for admission into the
U.S. under the visa waiver program). This push towards biometrics has resulted in tech-
nological advances that have made biometrics-based technologies mainstream and the
necessary investments affordable. We expect this trend to spill over into customer self-
services’ domain in future.
The most promising technologies in this context are speaker verification and
speaker identification (Markowitz, 2000). Both technologies aim at ascertaining a
speaker’s identity. The difference between the two is that speaker verification needs an
assertion of identity, whereas speaker identification does not need one. For example, an
automatic speaker verification system (ASV) uses the assertion “Hi, I’m John Doe!” to
retrieve John Doe’s reference voiceprint stored in the database. In a second step, the asser-

78
Self-Services in Customer Relationships

tion is compared with the reference voiceprint in order to verify whether the person really
is John Doe. Speaker identification systems, on the other hand, convert the assertion “Hi,
it’s me!” into a new voiceprint and compare this voiceprint with the system’s reference
voiceprints stored in a database.

ASV at Home Shopping Network. Some years ago, Home Shopping Network’s (HSN)
customers who used a telephone to place an order had the choice to either directly speak
to a call center agent or use a touchtone IVR. For identification purposes, the customers
first had to punch in their membership number. However, HSN encountered the follow-
ing problems with this identification procedure (Markowitz, 2000):
• What could they do to help those customers—approximately 30%—who did not
have a touchtone telephone?
• What could they do to prevent 12% of their customers dropping out of the IVR
identification procedure because they could not remember or find their member-
ship number?
• How could they prevent fraud by someone who knew another customer’s mem-
bership number?
The answer to these questions was: introduce a speaker verification system! And
this is what HSN did. As a claim of identity, callers have to provide their telephone num-
ber (a number that everybody should be able to remember). A new customer undergoes
an enrolment procedure during which the customer has to answer questions that allow a
voice model to be established. Based on this voice model, a voiceprint is stored in a data-
base. Voice recognition technology is used to determine whether the telephone number
given by the caller is the correct one. Then the system uses speaker verification to voice-
verify the caller’s identity. According to HSN, the verification has a 98% success rate.

Conclusion. We expect to see more speech recognition and voice biometrics applications
within the scope of the self-service domain. Although the technology still has some room
for improvement in the areas of acoustic memory and prosody (Shneiderman, 2000), it
has been proven and will move towards the mainstream in the foreseeable future. Fur-
thermore, the ever-increasing demand for mobility and trends such as ubiquitous com-
puting, which demands hands-free and eyes-free user interfaces, will further stimulate the
supplementation and even replacement of existing (graphical) user interfaces by voice
user interfaces.

Persona Design—From Personalization to Persona-lization

As more and more technology is infused into customer relationships, the high-touch that
is usually prevalent in customer interactions is replaced with high-tech. However, the

79
 e-Service Journal

bottom line is: people want to interact with people, whereas most companies still think
that simply automating tasks is sufficient. This observation is also underpinned by our
research that identified a lack of human interaction as a key inhibitor of self-services. The
current situation in the self-service arena is similar to what Cooper (Cooper, 2004), an
expert on user interaction design, describes as the “dancing bear” phenomenon: a bear
dances clumsily, entertaining a circus audience and even though everyone knows that the
bear is not a good dancer, they are amazed by the fact that the bear is dancing at all. Cur-
rently, self-service technologies, such as kiosks or IVR, largely consist of dancing bears.
A concept that can be applied in this context is persona design. Many companies
have already started to segment their customers and attach names and attributes to each
customer segment. For example, Best Buy, the U.S. consumer-electronics giant, tries to
identify desirable customers by putting them into pre-defined categories which are char-
acterized by certain attributes and names (McWilliams, 2004). Best Buy wants to have
customers like Barry, who is wealthy and likes action movies and cameras, and Jill, who
is a busy suburban mom willing to buy only the best products for her family. There is also
Buzz, a tech-savvy geek who enjoys showing off the latest gadgets. Best Buy’s sales associ-
ates have been trained on that persona-centric model in order to be able to interview cus-
tomers and to determine if they are Barrys, Jills, or Buzzes.
However, persona design is not only about attaching a personality to customers. It
is also about personalizing customer-facing applications in a self-service context (e.g.,
IVRs or Web sites). A persona is an imaginary person who can be used in the process of
designing a self-service application. A persona has all the characteristics of a human such
as a name, age, gender, job title, accent, and even humor. These details make a person and
embody the perceived personality of the self-service application.

Yahoo!’s ‘Jenni’. An actual example of enriching computerized speech recognition sys-

tems with a human touch is Yahoo!’s Jenni McDermott (Perry, 2003). She reads emails
over the phone to customers who use Yahoo! to manage their emails. Jenni’s biography is
very detailed for a fictitious person: She is 24 years old, 5ft 5 in., brunette, and her star
sign is Leo. She graduated in 2001 with an art history degree from Berkeley. She looked
for a job at an art gallery, but could not find one. At the moment she is working as a bar-
tender. During her spare time she walks her dog (called Brindle) and meets up with her
boyfriend Rob. Jenni’s persona was obviously constructed in accordance with the attrac-
tive and convincing girl-next-door image that sets people at ease. It comes as no surprise
that Jenni sounds like the person her background information suggests: smart, friendly,
and somehow ”cool.” These characteristics are reflected in her vocal style, tone of voice,
dialogue style and so on. As a result of the persona design process, Jenni says “You got it!”
when responding to a customer, or “Wow, you’re popular!” when the caller’s inbox is very
crowded.

80
Self-Services in Customer Relationships

Table 4. Future trends in the self-service domain

Trend Findings and Conclusions Practical Applications
Integration of self- • Most companies refer to their self-services • Office Depot’s in-store
services with as separate, divisional or channel-specific kiosks and pick-up service
‘traditional’ customer initiatives. for office supplies
touchpoints • Self-service is seen as a threat by other • Borders’ ‘Title Sleuth’
established channels. initiative
• Consequently, companies are sending
‘mixed messages’ to their customers that
result in a bad service experience.
Voice as the future • Bad customer experiences are often caused • Amtrak’s automatic speech
user interface by the self-services’ poor design, as recognition (ASR) system
touchtone IVRs prove. • Office Depot’s voice portal
• No user interface is more natural and • Home Shopping
human than voice. Network’s automatic
• The benefits of voice-based technologies speaker verification (ASV)
can be reinforced when combined with system
biometrics.
Persona design • People want to interact with people, not • Yahoo!’s Jenni McDermott
with machines. • Amtrak’s Julie
• Persona design is an approach that creates • Coke’s Hank
an imaginary person who can be used as a • Ford’s Kate
guiding framework for designing a self-
• Dove’s Katie
service application.

Amtrak’s ‘Julie’. A persona-centric approach was also used to develop Amtrak’s voice rec-
ognition system described above (Urbina, 2004). Amtrak’s ASR solution is called Julie.
However, unlike the other described examples, Julie’s persona was not invented. Julie is
actually a real person with a real background. The real-life Julie is Julie Stinneford, aged
41. She lives near Boston, has two sons and is a professional voice talent. Amtrak did not
randomly choose Julie’s voice, as other people also applied for the part. However, Amtrak
was looking for someone authentic who could offer everyone a sympathetic ear and pro-
vide the caller with guidance throughout the conversation. The combination of Julie
Stinneford’s background and her voice’s characteristics led Amtrak to decide that she was
the best choice. Julie has become very popular since then and, although she is certainly
not the only source of Amtrak’s voice recognition system’s success, she helps to improve
callers’ satisfaction.

Conclusion. The examples we described are just some indicators of the trend that is
about to start. Although the cases we presented have been taken from the area of tele-
phone self-service, the concept of persona design is not limited to this context. Examples
from other companies that also jumped on the bandwagon, such as Coke’s Hank, Ford’s
Kate, and Dove’s Katie (all of them representing virtual agents on the respective compa-

81
 e-Service Journal

nies’ Web sites), are proof of this trend. The presented mini cases indicate that more and
more companies are realizing that persona design is an effective way to overcome the
weakness inherent in all self-service systems: the lack of human interaction resulting in
customers who are either unhappy, or not willing to take advantage of self-service offer-
ings. Based on the facts presented here, we argue that this kind of persona-lization (i.e.,
creating a memorable persona with a name and a real-life background) supports compa-
nies in the process of developing self-service applications that feature the right balance of
high-tech and high-touch.

CONCLUSION, LIMITATIONS, AND RESEARCH IMPLICATIONS

This article has aimed at contributing to the existing knowledge of self-services in cus-
tomer relationships in several ways. Firstly, a review was conducted of the body of litera-
ture in the self-services area. In this context, two general themes were identified:
customer and technology. Different authors describe self-services in different ways, using
terms such as prosuming, co-production, and co-creation. There is a common under-
standing within the literature that self-services have changed the customer’s role because
customers have increasingly become active actors in customer-company interactions. In
this context, technology is seen as an enabler and has become the center of attention in
recent years.
Secondly, our literature review, which showed that the literature is clustered around
the two themes of customer and technology, was also the basis for the development of the
questionnaire used in the survey that we conducted. Among other things, the survey
brought to light that most companies refer to their self-services as separate, divisional, or
channel-specific initiatives. An enterprise-wide integration of self-service activities is still
the exception. The biggest challenge for companies in the self-service arena is to address
the lack of human interaction. Many companies blamed their loss of client control and
hampered customer retention on this lack of human interaction. A limiting factor of our
empirical study is that the sample size is relatively small, although it is within the range
found in other studies in this area (e.g., Xue, Hein and Harker, 2005). Furthermore, we
did not intend to investigate self-services in customer relationships in a hypothetic-
deductive way at this point. Our future research aims at shedding further light on the
analysis of self-services outside the German-speaking countries and may focus on a spe-
cific industry. The internationalization of research in this field may also give rise to cul-
tural issues as an emerging theme in the area of self-services in customer relationships.
Finally, our survey’s results identified the balancing of high-tech and high-touch as
the key challenge for companies. Based on our research and experience in the area of self-
services, we presented three trends together with their practical implications that we
consider as crucial for achieving this balance (see also Table 4. Future trends in the self-

82
Self-Services in Customer Relationships

service domain). We argue that the key enablers for balancing high-tech and high-touch
in customer relationships in the future will be:
• the integration of self-services with traditional customer touchpoints,
• the usage of voice-based technologies, and
• the deployment of persona design for the development of self-service applications.
We therefore intend to continue steering our future research activities in the self-service
domain towards this direction.

REFERENCES
Accenture. Helping Customers Help Themselves: Self-Service Opportunities for Telecommunications Companies,
2004.
Bateson, J. E. G. “Self-Service Consumer: An Exploratory Study,” Journal of Retailing (61: 3), 1985, pp. 49–
76.
Bitner, M. J., Ostrom, A. L. and Meuter, M. L “Implementing Successful Self-Service Technologies,” Acad-
emy of Management Executive (16: 4), 2002, pp. 96–109.
Bock, G. E. Office Depot: A Destination for Office Supplies and e-Business Expertise—Building Multi-
Touchpoint Relationships with Customers and Vendors by Integrating Business Processes, 2004.
Bowers, M. R., Martin, C. L. and Luker, A. “Trading Places: Employees as Customers, Customers as
Employees,” The Journal of Services Marketing (4:2), 1990, pp. 55–69.
Bradbury, D. “Speechless,” The Guardian, December 9, 2004.
Chase, R. B. “Where Does the Customer Fit in a Service Operation?” Harvard Business Review (56:6), 1978,
pp. 137–142.
Cooper, A. The Inmates Are Running the Asylum: Why High Tech Products Drive Us Crazy and How to Restore
the Sanity, Sams, 2004.
Curran, J. M. and Meuter, M. L. “Self-Service Technology Adoption: Comparing Three Technologies,”
Journal of Service Marketing (19:2), 2005, pp. 103–113.
Dabholkar, P. A. “Consumer Evaluations of New Technology-Based Self-Service Options: An Investigation
of Alternative Models of Service Quality,” International Journal of Research in Marketing (13), 1996, pp.
29–51.
Easton, J. Going Wireless, HarperBusiness, 2002.
Economist. “You’re Hired,” The Economist, September 16, 2004.
Economist. “Crowned at Last,” The Economist, April 2, 2005.
Genesys. “Contact Center Realities—Industry Insights for Success with Self-Service: A Research Study of
Consumer Attitudes and How North American Contact Centers are Managing Self-Service,” 2004.
Gilbert, A. and Bacheldor, B. “The Big Squeeze,” InformationWeek Online, March 27, 2000.
InformationWeek. “The Top 100 Electronic-Business Innovators,” http://i.cmpnet.com/infoweek/765/
graphics/top100.pdf, 7/11/2005 (access date), 1999.
Lovelock, C. H. and Young, R. F. “Look to Consumers to Increase Productivity,” Harvard Business Review
(57:3), 1979, pp. 168–178.
Markowitz, J. A. “Voice Biometrics,” Communications of the ACM (9:43), 2000, pp. 66–73.
McWilliams, G. “Analyzing Customers, Best Buy Decides Not All Are Welcome,” The Wall Street Journal
Online, November 8, 2004.
Meuter, M. L., Ostrom, A., Roundtree, R. I. and Bitner, M. J. “Self-Service Technologies: Understanding
Customer Satisfaction with Technology-Based Service Encounters,” Journal of Marketing (64:3), 2000,
pp. 50–64.

83
 e-Service Journal

Mills, P. K. and Morris, J. H. “Clients as ‘Partial’ Employees of Service Organizations: Role Development in
Client Participation,” The Academy of Management Review (11:4), 1986, pp. 726–735.
Perry, J. “Voice of Experience—The Automated Telephone ‘Personas’ that Listen and Respond to Callers
have Detailed Life Stories,” USNews.com, December 5, 2003.
Prahalad, C. K. and Ramaswamy, V. “Co-opting Customer Competence,” Harvard Business Review (78:1),
January-February, 2000, pp. 79–87.
Shneiderman, B. “The Limits of Speech Recognition,” Communications of the ACM (43:9), 2000, pp. 63–
65.
Slobin, D. Psycholinguistics, Scott Foresman and Co., Glenview, Illinois, 1979).
Temkin, B. D., Manning, H., Sonderegger, P. and Amato, M. Scenario Design: A Disciplined Approach To
Customer Experience, Forrester, 2004.
Toffler, A. Future Shock, Amereon Ltd., New York, 1970.
Urbina, I. “Your Train Will Be Late, She Says Cheerily,” The New York Times, November 24, 2004.
Wikström, S. “Value Creation by Company-Consumer Interaction,” Journal of Marketing Management
(12:5), 1996, pp. 359–374.
Xue, M., Hein, G. R. and Harker, P. T. “Consumer and Co-Producer Roles in e-Service: Analysing Effi-
ciency and Effectiveness of e-Service Designs,” International Journal of Electronic Business (3:2), 2005,
pp. 174–197.

84

View publication stats