EXECUTIVE SUMMARY

The number of retailers that adopt a multi-channel strategy to service customers appears to be growing. Specifically, the telephone and the Internet are fast becoming feasible alternatives to the traditional face-to-face channel as they are integrated into multi-channel servicing systems. In this paper, we report on a multi-level study of clients of a large retail bank that investigates the channel performance satisfaction-behavioral intentions relationship when the traditional service channel (i.e., the branch office) is extended with technology-mediated channels (i.e., Internet and telephone). Specifically, we posit that customer satisfaction with the performance of the traditional service channel interacts with Internet and telephone banking satisfaction in the determination of behavioral intentions and that the direction of this interaction depends on the type of service.

We derive the theoretical rationale for interaction effects between channel performance satisfaction from cognitive fit theory. We suggest that the fit between the requirements of a specific activity in which a person is involved and the means through which this activity might be accomplished determines that person’s attitudes and behaviors toward the activity. We extend this perspective to multi-channel service environments in which customers can obtain similar services through various interchangeable channels. For the empirical research, we make use of a multi-level approach, which allows for simultaneous comparison of customers of a specific branch office and the use of generally accessible service channels.

For routine services, our findings suggest that behavioral intentions are most strongly influenced by satisfaction with branch office-related performance factors. For nonroutine services, satisfaction with service employee performance is the most significant driver of intentions. Our analysis also reveals that interactions between customer satisfaction with multiple service channels are important mechanisms in the formation of behavioral intentions. Evidence is found for contingencies in channel substitution and complementarity. More specifically, the Internet channel seems to be able to complement the service employee in face-to-face service delivery, particularly for more complex services, and vice versa. Apparently, a cognitive fit between both channels exists for nonroutine service types. A lack of feedback immediacy for the e-channel can be compensated for by face-to-face contact, whereas variability in employee performance may be offset by electronic, automated procedures. In contrast, for routine services, substitution effects between the Internet channel and office facilities occur, which is due to perceived similarities in channel functionality. Particularly for nonroutine service tasks, we find evidence for substitution between the phone channel and service employees. Customers perceive phone banking as a feasible alternative for onsite employees for services requiring more specialized attention. In contrast, employees could function as an alternative to the phone channel for such services. Finally, we find that customer characteristics, such as relationship length, branch visit frequency, and extent of the service portfolio also influence the behavioral intentions of customers.

Our study has several interesting theoretical and managerial implications. The findings underline the relevance of a situational and customer heterogeneity perspective when explaining the divergent findings encountered in the multi-channel literature. Furthermore, our study advances the understanding of the impact of channel satisfaction–behavioral intentions relationships across several levels of analysis. For management, it seems crucial to carefully orchestrate multiple service channels that can be used interchangeably by customers. Specifically, when designing and coordinating multi-channel servicing systems in retailing, decisions on complementing or substituting human labor in face-to-face settings with technology with should be carefully considered.