Engaging and retaining customers with AI and employee service

Abstract

Artificial intelligence (AI) permeates in service organisations as a tool to enhance operational efficiency and improve customer experience. Reports show that most consumers prefer human interactions with service employees. Drawing on this observation, the current study examines how customers' service experiences with employees and AI influence customer engagement and loyalty. Customers’ emotional intelligence is proposed as a moderator between service experience and customer engagement. The study was conducted with hotel customers in Australia. The results show that whilst both service experience with employees and AI are significantly related to customer engagement and loyalty, only certain dimensions make significant unique variances in the outcome variables. The findings indicate that customers prefer employee service. These service experiences also have significant partial mediation effects on customer loyalty. Emotional intelligence has a significant moderation effect on customer engagement. Discussion of these findings and implications derived from this study concludes this paper.