Design, Operation, and Evaluation for Enhancing Customer Experience in Technology-based Service Systems

Abstract

Experience economy is the concept that refers to the paradigm in which economic value is created from customers experiences. In recent years, the importance of customer experience as a new differentiating factor is gaining ground given the fierce competition in the global market, fast-changing business environment, and commoditized products and services. In particular, the development of information and communication technologies has realized and extended the potential customer experience by integrating physical, real world and virtual, digital world, and thereby promoting the advent of experience economy. In this circumstance, the effective use of technology to create innovative customer experience has become an essential requirement for companies to secure competitive advantages. Todays customer-firm interaction arises not from single face-to-face service encounters, but from technology-based service systems into which various technology-based service encounters are also incorporated. Hence, to improve and innovate customer experience, it is critical to analyze customer-firm interaction within the frame of technology-based service systems and use and manage technologies from the perspective of customer experience. In this regard, this study deals with the problem of customer experience innovation using technologies in the frame of technology-based service systems. To this end, this study transforms the question as to how we should use technologies to provide better customer experience into the question as to how we should manage technology-based service systems to provide better customer experience. Specifically, this study considers three different aspects of management of service systems including design, operation, and evaluation, and derives customer experience-related issues for each aspect, aiming to suggest analytical methods and processes to address such issues systematically. Theme # 1, from the design perspective of technology-based service systems, aims to contribute to creating new customer experience by designing innovative customer-firm interaction based on technologies. The research of this theme starts from the fact that values that customers perceive in technology-based service systems differ depending on the relationship between enabling technologies and customer activities. Based on this, a conceptual construct is developed to represent a value creation mechanism in technology-based self-services with three components - enabling technologies, customer activities, and values. Based on the conceptual construct, a relational matrix approach is finally proposed, which is able to explore opportunities for technology-enabled customer experience in services. The suggested approach is applied to a case of mobile app-based self-services in supermarket retailing. Theme # 2, being concerned with the operation perspective of technology-based service systems, aims to provide holistic customer experience with integrative operation of various technology-based service channels. Historically, interaction between customers and firms usually arises based on a single service channel independently. However, in these days, such single-channel service environment has been changed into multichannel service environment in which customers and multiple service channels interact with each other in complex and integrative ways. This change increases the importance as well as difficulty of understanding customer behavior. In this situation, this study suggests an agent-based modeling approach to represent and investigate customers channel choices across the buying decision process in the multichannel service environment. The suggested approach is illustrated with a fashion retailing case. Theme #3, dealing with the evaluation perspective of technology-based service systems, aims to obtain information that is relevant and useful to diagnose quality problems and improve customer experience by analyzing customer experience feedback. For technology-based service systems, an additional means is essential to obtain customer experience feedback because of lack of face-to-face interaction between customers and service personnel. This study focuses on customer review data, which have shown a dramatic increase in amount with the development of information and communication technologies. With a sentiment analysis-based approach to customer review data, a method to diagnose quality of technology-based service systems from the perspective of customer experience is proposed. The proposed approach is applied to a case of mobile navigation. The major contributions of this study can be summarized from the two aspects: academic aspects and practical aspects. First of all, this study contributes to both customer experience literature and technology management literature. From the perspective of customer experience, the area of discussion in the literature is expanded from the conceptual discussion to the analytic and methodological approaches. The issue of customer experience creation using technologies is transformed into the decision-making problems relating to the design, operation, and evaluation of the technology-based service system. This can be viewed as to make a step forward from the previous studies that had focused on measuring and evaluating the subjective and cognitive dimensions of customer experience without substantial methods to create desired customer experience. From the perspective of technology management, this study brings extension of its topics in the literature. The role of technology management in designing and managing customer experience is accentuated with the suggested methods, which are based on the standpoint of technology management in a narrow sense, and industrial engineering in a broad sense. Also, this study is expected to support realization and systemization of customer experience management by providing the analytical methods to organizations which are seeking to technology-based innovation in customer experience.