Services have been the interest of research since the 1960’s. After the 1990’s the development of technology became an interesting research area along with other service research. There are two customer service concepts that this study is discussing. These are traditional human based customer service and self-service technology based customer service. According to earlier studies, high service quality is a result of human interaction where people are seen as the key to company’s success. However, since technology has had its impact on services the overall image has changed companies as well as customers. In the 21st century self-service technology has become a new interest of research.
The purpose of this study is to find out whether Finnish young adults choose to use self-service technology instead of interaction with a receptionist in a hotel reception. Furthermore, purpose of the study is to discover what Finnish young adults want from the customer service nowadays. The research method of this study is a quantitative research with survey method of the primary research. Questionnaire is designed to find out customers’ expectations, experiences and future concept views. The sample was young Finnish adults and the data was collected through online and as a paper version and finally analysed with statistics. Results were positively surprising. Majority of the respondents would use self-service technology (SST) instead of traditional human interaction. However human interaction was also revealed to be the most important aspect of customer service. Therefore, this study suggests that instead of replacing traditional customer service entirely with self-service technology, it would be offered as additional service concept in future receptions.
We are living in a service society. It is the most popular employment sector in the whole of Europe including Finland. For a long period of time services have been the only sector in the economy that has continuously brought employment and productivity to society. (See, for example Pesonen, 2002, p.17 & Tuorila, 2002, p.1) Services comprise the major part of the world’s economy. (Kandampully, 2002, p.5) Yet, the idea of a service society seems distant to Finnish people and rather than a service society, Finland could be called as self-service society. Finnish people have always been very independent, hardworking and initiative. And the reason for this has probably been the history of labour shortage and lack of services. (See, for example, Tuorila, 2002, p.1) Even though self-service is common in everyday life in Finland, only a small number of hotels in Finland have adopted the system. It is no surprise in this global world that technological advances have their own effect on service industry. Service organisations have gone through enormous change in relation to service transactions. The traditional service transaction is called human-based interaction and it happens between a service employee and a customer. Yet some tourism organisations such as airports, tourist information centres and even hotels have adopted new service transaction alternatives to serve tourists. These alternatives to traditional service systems are self-service technologies (STTs). (See, for example, Oh, Jeong & Baloglu, 2011, p.692)
The importance of technology will continue to grow every day and in future it is likely that all employees with simple work tasks will be replaced with automated machines that can easily take care of the same tasks humans used to do. This can eventually be the case with hotel receptions in Finland too. Nevertheless even if technology will take over many areas of work, skills that only people have will be even more appreciated. These skills are sense making, critical thinking, decision making and social intelligence. Human skills are indispensable and the question is: Will technology ever be able to interact with customers the way people can? (Institute for the Future, 2001, p.3-8)
Every business needs innovations and changes in their functions to keep up with the competitive and busy world of business. Companies need to differentiate from other competitors and they need to have something special to offer in order to remain successful. Hotel businesses are already unique as and differ greatly from other service businesses. In hotels, customers are guests who use services that are provided by the employees who are hosts rather than salesmen. The host’s task is to take care of their guests, make sure they are satisfied, happy and want to come back. (Tisch & Weber, 2007, p.44) Hotels’ main purpose is to provide quality services to customers and be as profitable as possible. Customers are at the epicentre of the whole business and without them there is no business to run. (Alakoski, Hörkkö & Lappalainen, 2006, p.11) All Hotels today have a common problem, how to satisfy customers enough. One reason for this struggle is the contemporary hectic world which has changed customers’ needs. They are not comfortable with getting services that only satisfy their basic needs anymore, such as hearing the information about hotel services at the reception before getting the keys to the room. In other words getting only information that is needed in order to utilise the services available. Instead, customers have become greedier with everything. Instead of just getting a service they want an experience with the service. (Tisch & Weber, 2007, 2-3)
There are many different ways for companies to differentiate. Many service strategies are based on price and the idea that saving money is the best option for success. But there are other ways to differentiate especially for hotels that are heavily dependent on satisfying customers. All hotels have the same purpose; to accommodate customers and make them satisfied in a way that builds a strong and loyal relationship with them. (Martinez & Hobbi, 2008 p.66-68) Because of all the hotels having the same purpose, the competition is huge. Differentiation is hard but with a right strategy it can give lots of opportunities with creating experiences that fulfil customers’ needs. (Tisch & Weber, 2007, p.2-3)
Another problem though, almost everything can be copied. For example a hotel having strategy based on price will give a competitive advantage for a while but sooner or later other hotels are imitating this. Hotel service is all about customer service and focusing on that can be a key to success because every service is unique and therefore cannot be copied. (Tuulaninemi, 2011, p.18) Therefore, building a successful customer service is a good way to differentiate (Martinez & Hobbi, 2008).
1.1 Previous studies of the topic
Services have been the interest of research for a long period of time. Starting from the 1960s research was focused on the whole phenomenon of services and thinking about the right definitions. The idea of services was that they were related to service companies and they were only offered by them. After the 1980s research was not focused so much on definitions anymore but researchers realized the complexity of it and also agreed that there is more than one definition to describe the whole process. (Grönroos, 2009, p.76-77) Same goes with research on the quality of service, there is much research but even more opinions how to define it precisely (See Steward, Hope, & Muhlemann, 1998, p.211). Service quality is not something to take granted for. Customer service process needs to be well planned and designed in order to be managed successfully. There is a strong connection between management and service quality. (Martin, 2002, p.1-2) It is not a surprise that everything that is related to services is hard to explain when service itself is already such a complex process. The most important result and realisation of service research is that service is a process of interaction where the essence is on interaction part. (Grönroos, 2009, p.78) This means that the most important part of the service is the intangible element that happens between service provider and a customer and it is defined as service encounter. Interaction between these two parts defines whether the service is good or bad and every service encounter has its opportunities for companies’ success and failure. Many researchers have agreed on this definition. (See for example Bitner, Brown and Meuter, 2000, p.139)
Service creates an experience, which is a strong part of service and many researchers have declared that services have become as the new focus on economy. (See for example Walls, Okumus, Wang & Joon-Wuk Kwun, 2011, p.168) Pine and Gilmore states “Each experience derives from the interaction between staged event and the individual’s prior state of mind and being”. This means that the unconscious feelings and thoughts that individuals have before coming to the place where the service happens affects the result and overall experience of service. Therefore, experience is always unique and there are no two totally same experiences because every human being experiences them differently. (Pine & Gilmore, 1999, p.12) After the 1990’s the importance of information technology had its contribution to the research area of services (Grönroos, 2009, p. 78). and the use of technology has been growing in service situations since then.
Self-service management is a very new concept in service management. It has only been recently when it was discovered as one important research area. Most of the research in the self-service area is focusing on the users of self-service and the role of technology in improving the service quality. (See Meuter, Ostrom, Bitner and Roundtree, 2003, p.900) Technology-based self-service means concept where a customer is using technology to complete the service on her/his own. (See, for example, Panda, Dash, & Rath, 2011, p.100)
In hotels high service quality has traditionally been connected to customer service being highly personalized and involving a lot of interaction with the service staff at the hotel. Today’s hotels have to manage new things as the self-service technology has become involved in service situations and it is a difficult task for them to maintain customer satisfaction levels the same as before. There are many good reasons for hotel managers to choose self-service systems instead of using traditional human-based services. Hence further research is needed in this sector to understand the positive and negative sides of the self-service technology in the hotel industry. (See Fisher & Beatson, 2002, p. 62-64)
According to Anckar, (2008, p. 42) there is one hotel chain that is a forerunner in self-service technology innovation and that is Finnish Omena Hotels. It offers customers a high class hotel stay in the city centre location with low prices supported by information communication technology (ICT). According to Anckar, Omena Hotels are unique and no identical concepts are found in anywhere in Finland. Therefore there is a lack of research in the area of perceptions of technology based self-service in Finnish hotels.1.2 Study purpose and aims
This thesis is part of the author’s wider service design project where the aim is to design a new customer service concept for hotel receptions in Finland with self-service technology in mind. Service design is a modern approach for companies who wish to change or develop their services or create new ones. (Stickdorn, 2011, p. 29) Service design has 4 different phases in the design process and the first phase is a deep background research that aims to define the current situation in the ‘area’ that needs a change (Stickdorn, 2011, pp. 128-129). The background research is very important part of service design in order to understand what needs to be done later in the service design process and how (Tuulaniemi, 2011, p. 130). It is important to get a good understanding of the present situation, in this case the customers’ opinion about the self-service technology, before the process can continue to the design phase. (Stickdorn and Schneider, 2011, p.128)
The role of this master’s thesis is to be the background research. The study is divided into secondary research as theoretical framework and primary research as empirical research with survey method. Theory part will deal with the key words of the study. These are: service concept, customer service, self-service technology and service quality. Hypotheses are based on the theory and the purpose of them is to help to create the questionnaire which aims to find out the current situation in Finland about service quality in Finnish hotel receptions; tourists’ expectations, experiences and satisfaction. Hence, the research question is: Are Finnish customers ready for self-service technology in future hotel service encounters?
The hypotheses of the research are listed below and they will be discussed further after theory part of the research.
H1. ”Customers who are likely to use self-service technology in hotel receptions are motivated by extrinsic rather than intrinsic reasons.”
H2. “Customers who are likely to use self-service have experienced a problem with traditional customer service before.”
H3. “High quality service means human interaction and customized service”
The interest for this study was fueled by the author’s previous experience in the hotel business and her personal interest towards customer service, service transaction methods, service innovations and service design. After working for a couple years in a hotel as a receptionist and a waitress, the author realized how big influence employees have on customers’ satisfaction through customer service. Hotel reception is the place where customers enter at first and everything in that place gives customers the first impression of their stay in a hotel. Therefore, reception is the centre of the hotel and it should be functional and smooth without too much hassle around.
The author not only realized the importance of the service employees in the reception, but also all the problems and challenges that face them in the working area. These were influencing the author in her research and therefore are listed above:
Because this study is one part of the author’s service design process, there is one chapter that introduces the service design concept in detail. This will help readers to understand the reasons for choosing this topic and also understand the service design process better.
In Finland many trends and development ideas to services come from abroad. These trends are popular for a while and people are excited about them for a certain period of time. However, it is very common that people lose their interest of using these new trends and the actual meaning of the new developments disappear very quickly. One reason for this is the difference of Finnish people’s behaviour and taste of things compared to other nationalities. (Valvio, 2010, p.29) Some foreign people think that Finnish people has odd and distinctive taste. Finnish people are famous for liking things that have two opposite factors combined together, such as salty liquorice with salt and sweet and hot sauna with cold jumps into water in between. Here just to mention a couple. (Bosworth, 2013) Trends such as technological innovations need a good background research before they are introduced to customers. It is important to take customers’ needs into a consideration before bringing solutions to the services. (Valvio, 2010, p. 34)In this study, a careful research about customers’ opinions about customer service encounters will help to accomplish the development of service concepts better. After the research, the aim is to know what Finnish people want from customer service and whether they are ready for self-service technologies in hotels. Therefore, this study is a customer research about the perceptions of customer service quality in hotel receptions in Finland.