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The Loyalty Impact of Kiosks

By: Bill Bleuel

 

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Kiosks are one form of self-service technologies that are being introduced into the marketplace. We’re seeing that self-service kiosks can change the way customers act.

Dr. Ryan Buell, an assistant professor at Harvard Business School is studying this interaction between operations and customer behavior. He has identified some interesting characteristics that appear between customers and self-service technology aspect of the kiosk.
There are four additional researchers at the Rotman School of Management at Duke’s Fuqua School of Business and the National University of Singapore who are also examining these self-service strategies. The findings of these researchers show both positive and negative aspects of self-service technologies. Some of the examples that they give are:
  1. Market share of difficult to pronounce items increased 8.4% when customers had no need to pronounce the item.
  2. At one McDonald’s  they found the average check size was increased by 30% using the kiosk.
  3. By using self-service technologies fast food restaurants have seen an increased market share by 1 to 3%.
Some of the positive benefits of kiosk self-service technologies are:
  1. Reduced labor cost
  2. Potential for increased market share
  3. Reduced time to complete a service
  4. Possibly reduce customer waiting time when placing an order
Some of the negative aspects of self-service technologies are:
  1. Loss of flexibility: the kiosk can only do what it was designed to do and cannot adapt beyond its design
  2. The use of the kiosk may be confusing to the customer and reduce customer loyalty
  3. Loss of the ability to delight the customer with special considerations
  4. May not contribute to building long-term customer relationships.
The bottom line is that the kiosk has a place in business. There are service operations where self-service can be beneficial. On the other hand, the loss of the customer-employee interaction will often make the difference between having a loyal customer and the non-loyal customer.
Research continues to support the notion that customer-employee relationship is one of the key elements for building customer loyalty. The challenge for every service business is to examine self-service technologies and apply them in areas that are appropriate for increased productivity while making sure that the customer-employee relationship is maintained.
This article was originally published by The Customer Institute
Published: May 4, 2015
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Bill Bleuel

Dr. Bill Bleuel is an award-winning Professor of Decision Sciences at Pepperdine University’s Graziadio School of Business and Management. Dr. Bleuel’s expertise lies in the quantitative aspects of business. He specializes in the measurement and analysis of operations, customer satisfaction, customer loyalty and customer retention. He has held senior positions in engineering, marketing and service management at Xerox, Taylor Instrument Company and Barber Colman Company. Dr. Bleuel has also experience as general manager in two start-up companies that he co-founded.

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