Effect of personalization on the perceived usefulness of online customer services

Abstract

E-tailers provide a variety of customer service, many of which are personalized in an attempt to improve customer satisfaction. Several studies indicate that customers perceive these services to be useful, but it is inconclusive whether this effect is created by economic or emotional factors. This paper proposes a dual core theory that takes into account both economic factors (measured by perceived reduction in transaction costs) and emotional factors (referred to as the perceived care) in their effect on the perceived usefulness of providing personalized customer services.A survey revealed that different customer services have different perceived usefulness. The study also found that both economic and emotional factors come into play; the perceived care has a stronger effect than transaction cost reduction on the perceived usefulness of e-services. This implies that the effect of personalized services is due to both economic and emotional factors, (called dual-core), and that e-tailers may use personalized customer services strategically to increase customer care, rather than just focusing on providing economic benefits.