Complementing Self-Serve Technology with Service Relationships: A Study of Customers' Reasons for Going Online

The adoption of self-service technology by customers is arguably the hallmark of a successful dot-com venture. The more customers go online to fulfill their service needs themselves, the more scalable and cost-effective the business model. However, in the business-to-business (B-to-B) environment in particular, embedded relationships between customers and providers (e.g., sales representatives) have traditionally been key in generating repeat business and financial success. While some regard electronic networks and service relationships as substitutes, others have explored their complementarity (e.g., Benasou 1997; Kraut et al 1999; Grover et al 2002). However, this research is based on cross-sectional surveys and customers’ reactions to strategies of complementarity have not yet been explored in situ, i.e., in customers’ everyday dealings with their providers. In this paper we explore customer’s situated perceptions of service designs in which self-serve technology and service relationships are used in a complementary fashion. Representing the strategy of complementarity as a continuum with “customer’s exclusive reliance on service relationships” and “customer’s exclusive reliance on self-serve technology” as the poles, this research explores what differentiates customers who are located in three different zones of this continuum (i.e., those who use self-serve technology 1-33%, 34-67% and 68100% of the time online). An understanding of the differences in the way technology and service relationships are perceived by each of these customer groupings, promises to provide some insights into the optimal mix of IT and relationships in a service design. Much of the research on the impacts of electronic communication networks such as the Internet presents as competing substitutes personal, embedded relationships and computer-mediated, arm’s-length relationships between exchange partners. Proponents of transaction cost economics highlight that communication technologies like the Internet reduce transaction, coordination, and search costs, thus favoring the development of electronic markets characterized by arm’s-length transactions between buyers and sellers (e.g., Brynjolfsson, Malone, Gurbaxani, & Kambil, 1994; Malone, Yates, & Benjamin, 1987). In contrast, proponents of social embeddedness theories (Uzzi & Gillespie, 2002) challenge the rational actor assumptions inherent in transaction cost economics. They maintain that transactions embedded in social relationships are more efficient than arm’s-length relationships (e.g., Granovetter, 1985; Uzzi, 1997), thereby suggesting that embedded relationships will remain important despite changes in communication media. More recently, the complementarity of such rational and relational theories has been recognized in such areas of research as media choice (Webster & Trevino, 1995), virtual organizing (Kraut, Steinfield, Chan, Butler & Hoag, 1999) and market structures (Uzzi, 1999). Particularly relevant to the current study is the prior IT research on the complementarity of electronic networks and social relationships in the business-tobusiness (B-to-B) environment. This is because service relationships (Gutek, 1995), that is, a Schultze/Complementing Self-Serve Technology with Service Relationships 1 Double quotes denote emic and industry-specific terms. 2003 — Ninth Americas Conference on Information Systems 221 service delivery strategy whereby a customer conducts repeated business with a specified provider such that a socially embedded relationship can be established, are particularly prevalent in the B-to-B setting. While insightful, the extant IT research in this area (i.e., Benasou 1997; Kraut et al 1999; Grover et al 2002) is based on cross-sectional surveys, leaving customers’ situated perceptions of technology-relationship complementarity unexamined. Thus, the purpose of this paper is to explore how, based on their everyday dealings with self-serve technology and their providers, customers account for their reliance on a particular mix of self-serve technology and embedded relationships. Representing the strategy of complementarity as a continuum delimited by “customer’s exclusive reliance on service relationships” and “customer’s exclusive reliance on self-serve technology,” this research relies primarily on 60 customer interviews conducted as part of an ethnographic field study of WebGA (a pseudonym), a dot-com “general agent” operating in the small group health insurance industry in the United States. WebGA lends itself well to the study of the complementarity, not only because it offered both selfserve technology and service relationships, but also because social capital, i.e., the sense of obligation and reciprocity, characteristic of embedded relationships, was crucial to WebGA’s success. The Self-Serve to Service Relationships Continuum Network theorists distinguish between weak and strong ties (e.g., Hansen 1999), which maps onto the distinction social embeddedness theorists make between arm’s-length and socially embedded relationships (Granovetter, 1985; Uzzi, 1997). Arm’s length relationships characterize exchange relations in which rational actors with purely self-interested motives engage in calculative, opportunistic behavior. Due to the lack of a social contract, arm’s-length relationships are typically associated with relatively formal, explicit contracts (Poppo & Zenger, 2002). They are considered ideal for tasks that require economic rationality and market competition (Uzzi, 1997), such as broad information searches, which depend on the identification and transfer of nonredundant, public information or codified knowledge (Hansen, 1999). Embedded relationships, in contrast, are characterized by relational contracting (Poppo & Zenger, 2002) as they embed commercial transactions in a web of social attachments such as friendship and kinship (Uzzi & Gillespie, 2002). These social attachments carry with them norms of behavior and expectations of trust and reciprocity, i.e., social capital (Adler & Kwon, 2002). Embedded relationship rely on social contact between exchange partners and are particularly conducive to tasks that require trust and cooperation (Uzzi, 1997), as well as the transfer of sensitive, private information and tacit knowledge (Hansen, 1999). While electronic networks and self-serve technology create the conditions for arm’s-length relationships, service relationships, i.e., repeated social interactions between a specific customer and provider (Gutek, 1995), create the conditions for embedded relationships. In light of our interest in the complementarity between self-serve technology and service relationships, the key insights from network and embeddedness theory can be summarized in the form of the following continuum (Figure 1): Customer’s exclusive reliance on service relationships ................. Customer’s exclusive reliance on selfserve technology Socially embedded relationships ................. Arm’s length relationships Tasks that require trust and cooperation ................. Tasks that require economic rationality and market competition Private information; tacit knowledge ................. Public information; explicit and codified knowledge Social capital: trust, reciprocity, obligation ................. Opportunistic behavior Figure 1. Continuum of Relationship–Technology Complementarity