The Effect of a Multichannel Customer Service System on Customer Service and Financial Performance

Abstract

Customer service is an important competitive lever for the modern firm. At the same time, the continuous evolution and performance improvements in information technology (IT) capabilities have enabled the utilization of multichannel service delivery strategies. Our research focuses on IT-enabled customer service systems (CSS) and their effect on firm performance. Previous studies have failed to find a consensus on the effect of a new self-service channel on the firm's performance. We argue that the embedded assumptions underpinning the previous research are responsible for these mixed findings. Consequently, using archival data from 169 hotels affiliated with a hotel chain, we designed a longitudinal multichannel study to resolve some of these inconsistencies. Our results illustrate that when firms implement an IT-enabled self-service channel to complement their existing customer service infrastructure, they experience an early negative effect on financial performance due to the disruption of the service processes. Thus, the multichannel CSS generates a positive effect only when the new process becomes a stable part of the organizational procedures. Our findings suggest that researchers evaluate the effect of a technological initiative after the new business process has been stabilized and consider that an additional IT-enabled self-service channel rarely operates in isolation.