Options of strategic decision making in services

Abstract

Service‐marketing literature has traditionally built upon the combination of low technology and high interaction between service providers and customers in service delivery. However, many service organisations have started to utilise high‐tech in their operations. More specifically, they are considering how to make their services available to a wide range of customers with the aid of technology. So far, only few empirically oriented studies on this trend can be found in service literature. In this article the topic is approached on the basis of both services marketing literature and an in‐depth analysis of two case studies. The empirical evidence was gathered from two Finnish financial organisations, an insurance company and a bank, both having utilised technology in their service production and delivery. The consequences of these choices are evaluated and compared with each other. We conclude with a framework for strategic decision making, which ties together the dimensions of service type, technology and encounter. On the basis of our empirical cases, we suggest that there are numerous strategic options between the ends of each continuum of the framework, and in addition to advanced technology, service providers need to pay explicit attention to social aspects. The lesson we learned calls for more customer orientation when planning high‐tech solutions in service operations, and taking a new attitude to segmentation.