High-contact services of the transient and high-uncertainty type : managing customer experience

Abstract

Purpose: Many small-to-medium sized service shops (e.g. jewelry shops, fine-dining restaurants etc.) operate in a unique service environment. They often face customers in transit (i.e. transient delivery) and with minimal information of their preferences (i.e. high uncertainty). This study investigates how such shops create service experience to customers by focusing on three constructs, namely, customer orientation, management commitment to service quality and quality of leader-member exchange in service systems with the uncertain and transient nature. Building on a systems approach of service experience design, the authors examine all possible effects (main effects and two-way and three-way interaction effects) on customer experience. Specifically, to frame the two-way and the three-way interaction effects, the authors adopt the contingency and configuration approaches, respectively. Design/methodology/approach: This study employs a multiple respondent approach involving managers, employees and customers to collect data from 225 service shops in Hong Kong. Hierarchically moderated regression analysis is employed to analyze the collected data. Findings: Contrary to our initial conceptualization, most of the direct effects and two-way interaction effects among the three constructs are insignificant. The authors do, however, uncover a significant effect of the three-way interaction term. The authors analyze the results from the configuration perspective. Originality/value: The finding suggests that the configuration approach is necessary to determine the configuration concerning how design elements align with one another to generate an integrative effect on customer experience. The authors conclude that for high-contact services of the transient and high-uncertainty type, all three constructs must operate simultaneously to evoke favorable customer experience. Customer experience is holistically developed in a service system with high-uncertainty and transient nature, requiring simultaneous alignment across a range of design choices among those involved in service delivery (manager, employee and customer).