This chapter discusses how services marketers can use information technology to improve customer service and empower customers. It explains how technology can be used as an employee tool, to enable interactive customer experiences through self-service machines and computerized systems, and to capture large quantities of customer data. However, it cautions that technology implementation presents challenges like privacy issues, disruptions from outages, and weak links in customer interfaces if not designed properly with customer and marketer input.

1. Chap 3 – Plugging into the Information Age Objectives To explore the services economy and the information age To show how services marketers can use information technology as an employee tool for improving customer service and increasing productivity To demonstrate how services marketers can enlist information technology to empower their customers To explain how information technology can help bridge the physical distance between organization and customer and enable the interactive experience

2. Objectives (cont’d) To illustrate the various ways in which services marketers can employ information technology to learn more about their customers and respond to them more effectively To caution service organizations regarding the negative impact of technology To convey the many challenges of using technology to manage customer interfaces in service industries

3. Services and the Information Age

4. Services and theInformation Age (cont’d) Lags Many services are very people-intensive Many services are hard to standardize Many services are difficult to infuse with technology Lulls Digesting new technology takes time (time sink) Many changes are more qualitative than quantitative Leaps Organizational transformations are possible Nurturing of intellectual resources

5. Services and theInformation Age (cont’d) Technology in the Core Service Technology as a Supplementary Service Support Tool

6. Services and theInformation Age (cont’d)

7. Empowering EmployeesThrough Technology Technology Devices Networking

8. Empowering the Customer Self-service machines, such as vending or automated teller machines (ATMs) Computerized service delivery systems Intelligent agents Service robots

9. Enabling the Interactive Experience

10. Enabling theInteractive Experience(cont’d)

11. Capturing Customer Information Advances in information technology have allowed organizations to collect large quantities of information about customers and to create and deliver customer services hitherto unimaginable. It has also become possible to move from mass marketing to targeting individuals.

12. Capturing CustomerInformation (cont’d) Customer databases require several steps: Group customers into categories: current customers, prospective customers, and lapsed customers Data on the recency and frequency of each customer's purchases Data on each customer's purchases over a period of about twelve months Data on relevant customer information that will improve the company's ability to serve customer needs (preferred sizes, birthdays, credit card numbers, etc.)

13. Capturing CustomerInformation (cont’d) Uses Tracking customers' purchase patterns Make purchase patterns easily accessible to the frontline service provider Cautions Services marketers need to be very cautious about privacy issues as they create and use customer databases

14. Coping with Negative Impactsof Services Technology Technology will continue to play a critical role in service organizations’ competitive position. Service organizations often find that they have implemented new technology systems only to discover they have made no provisions for the absence of the technology during a power failure. Services employment levels may fall in absolute terms as technology replaces workers or reduces the need for workers.

15. Challenges of Using Technologyto Manage Customer Interfaces Technological weak links in customer interfaces Steps for improving the technology of customer interfaces

16. Weak Links in Customer Interfaces Automated Idiocy The rush to automate service functions often leads to systems that automatically do stupid things. Time Sink New services technology can be a “time sink” that steals time from the technology user. Law of the Hammer Based on the idea that a small child with a hammer sees everything as a nail. Technology can be used too much! An obsession with too many “bells and whistles”

17. Weak Links inCustomer Interfaces (cont’d) Technology Lock Technological designs persist long after their functional value is gone. Last Inch Many customer interface problems occur at the point of contact between the customer and the technology. Hi-Tech Versus Hi-Touch Customers face a confusing set of automated instructions when they really need to speak to a human being and not to a machine. Phone mail can become “phone jail.”

18. Steps for Improving theTechnology of Customer Interfaces Provide marketer input into the technology of customer interface design The marketer can help prevent design problems Stay customer-focused, not machine-focused Essential to successful customer interface design Make services technology invisible to the customer Place technology in the background Insist on design for flexibility Insist on designs that offer employees and customers maximum flexibility