Authors
Thomas Dotzel, Nathan Yang
Publication date
2023/7/5
Journal
Available at SSRN 4137822
Description
This study investigates the causal impact of repeat interaction effects between customers and the same front-line employees (FLEs) in face-to-face services on customer-satisfaction-related outcomes. Using granular transaction data from a large international car rental company and applying a novel exclusion restriction that captures how busy an FLE is, we show repeated customer-interactions with the same FLE lead to improved customer-satisfaction-related outcomes. Furthermore, we show the repeated interaction effects are strong enough to offset a service failure's negative impact on customer satisfaction. Finally, we demonstrate the existence of potential boundary conditions as well as managerial scope for our findings, because our main effects dampen with the employee's favorable performance from other transactions on the same day and are not present when looking at other outcomes such as upselling/cross-selling. The documented impact of repeated interactions suggests potential opportunity costs associated with the replacement of FLEs with new technologies, such as AI-powered smart kiosks or other self-service technologies. Our research also demonstrates that repeat interactions can be a passive recovery strategy from previous service operation failures. Finally, we illustrate that even though repeat FLE interactions can increase customer satisfaction, they do not seem to be an effective up-selling and cross-selling strategy.
Scholar articles
T Dotzel, N Yang - Available at SSRN 4137822, 2023