Microsoft Word - AJIS_18(3)_v10.docx Australasian Journal of Information Systems Volume 18 Number 3 2014 5 DO SELF-SERVICE TECHNOLOGIES AFFECT INTERFIRM RELATIONSHIPS? A B2B PERSPECTIVE Raechel Johns University of Canberra raechel.johns@canberra.edu.au ABSTRACT While considerable literature examines business-to business (B2B) relationships, the impact of technology on these relationships has lacked attention. IT has impacted the way businesses operate in a B2B context as well as influencing services by altering the way services are delivered. To understand the way in which Internet technology has impacted these B2B services, it is essential to examine its impact not only on business processes but on business relationships too. One technology, enabled by modern Internet technologies, which is changing the nature of business relationships is the increased use of self-service technologies (SSTs) or technology-enabled services, however, there is a shortage of research in the area in a B2B context. The discussion in this paper provides an overview of the impact of IT on business relationships, using Relationship Marketing theory to provide a theoretical framework. A qualitative study in the Australian banking industry provides findings relating to the theory. The findings of this study provide evidence that while traditional Relationship Marketing theory is still applicable for some business customers, new theory is required for business customers who do not seek relationships. With both practical and theoretical implications, the research detailed in this paper makes a useful contribution to the literature and indicates the necessity for further research to be developed which explores business customers who prefer to remain transaction-oriented, rather than develop interpersonal relationships. Keywords: self-service; Internet banking; interfirm relationships; B2B; qualitative INTRODUCTION It is essential to understand the impact of technologies on the relationship between the marketer and their business customer, business processes and productivity, because it will impact on customer satisfaction in relationships. Businesses are increasingly using IT in their B2B operations (Pujari 2004). In particular, the increasing use of self-service technologies (SSTs) within B2B (B2B) relationships removes face-to-face contact traditionally believed to be important in relation to service delivery between two organisations (Storper and Venables 2004). The impact this has on the relationship has not been widely examined because of the focus on the interpersonal face-to-face relationship. It would be useful to know whether technology impacts on trust, loyalty and ultimately the relationship itself. From a theoretical perspective, the importance of developing and fostering relationships with customers has long been regarded as important within services marketing (Berry 1983) and also within B2B relationships (Ford 1990). In the 1980s and 90s, a shift in marketing focus has seen an increased emphasis on Relationship Marketing (Morgan and Hunt 1994). It is therefore important to consider Relationship Marketing in the context of this study in order to have a better understanding of the impact of IT on business relationships. This paper examines the impact of SSTs on interfirm relationships. The paper commences with an overview of literature; findings and implications from an exploratory study will then be discussed and the paper will conclude with further research streams, drawn from the research. Australasian Journal of Information Systems Volume 18 Number 3 2014 6 To explore the research question “what impact does the use of SSTs have on interfirm relationships?” qualitative research was utilised. This was due to the exploratory nature of the study (Gummesson 2008; Johns 2008). First, the research propositions linked the literature will be provided. Findings will then be discussed and an overall discussion, linked back to new literature will be provided. LITERATURE REVIEW Understanding Relationship Marketing Relationship Marketing is a major theory in marketing, particularly within a B2B (interfirm) context (Kandampully, 2003) and when services are offered rather than goods (Berry, 2002). Relationship Marketing requires the establishment of trust and commitment (Morgan and Hunt, 1994) and marketers may strive to produce alliances (Hunt, Lambe and Wittmann, 2002) through their relationships with their business customers. Despite this, there is little understanding of how the use of IT impacts on trust and commitment to the relationships. It is essential to understand what Relationship Marketing is, and while there are many published definitions, one definition commonly used is: Relationship Marketing includes tasks undertaken to identify and establish, maintain and enhance and, when necessary, terminate relationships with customers and other stakeholders, at a profit, so that the objectives of all parties involves are met; and this is done by mutual exchange the fulfilment of promises (Grönroos, 1994: 9). Relationship Marketing focuses on increasing customer retention and loyalty (Berry 1983) and the importance of Relationship Marketing in the literature has grown considerably in the past two decades. Attracting new customers is quite costly, therefore organisations strive to retain satisfied customers. Relationship Marketing is particularly important in a B2B or interfirm context, where there are fewer customers, but transactions are generally of higher value (Kotler, Adam, Denize and Armstrong 2009). Within banking, Relationship Marketing practices are essential a way to enhance customer retention (Colgate et al. 1998; Colgate and Stewart 1998), foster trust, resulting in relationship commitment and satisfaction (Morgan and Hunt 1994). While many marketing activities focus on reaching out to a specific target market, Relationship Marketing focuses on the individual (i.e. looking at the single customer), rather than the ‘average’ customer (Wolfe 1998). Relationship Marketing orientation is viewed as more important than a transactional orientation within a B2B context (Anderson 1995), due to the cost of attracting a new customer rather than maintaining a relationship with an existing customer (Gummesson 2008). Without trust, loyalty and satisfaction it is impossible to build and maintain a relationship between organisations (Morgan and Hunt 1994); which is the main objective of B2B marketing. As a consequence, many researchers have explored trust (Young, 2006) and commitment (Cater and Zabkar, 2009). Relationship Marketing is particularly important in a service setting due to the direct contact between customer and marketer and the interactive nature and process of service delivery. The intangible nature of services makes them difficult to evaluate prior to service because customers cannot feel or see service quality (Berry 2002) and must purchase their service prior to experiencing it (Berry and Parasuraman 1991). If a customer trusts a service provider, they are likely to return to that service provider (Berry 2002), increasing loyalty to the relationship and reducing perceived risk to the customer. With an understanding that relationships are particularly important in a service B2B context, the first research proposition is therefore: Proposition 1: Business customers want relationships with their service providers Australasian Journal of Information Systems Volume 18 Number 3 2014 7 Benefits of SSTs It is evident that IT has altered the way business is conducted over the past fifteen years (Meuter et al., 2005). With the introduction of SSTs, consumers are required to carry out the transaction themselves; they are responsible for their own satisfaction (Meuter and Bitner, 1997; Bendapudi and Leone, 2003) and as a result organisations have had to effectively train customers to be co-producers. Turning the customer into a co-producer of a service has become evident where the customer participates in value creation (Vargo and Lusch, 2004) such as checking out a library book, booking a hotel room online, undertaking online investment trading and Internet banking. Perhaps the most dramatic change is the increase in the use of the Internet, allowing organisations the opportunity to introduce SSTs. Most new SSTs are Internet enabled and in many industry sectors, such as travel, corporate banking and professional services, proprietary self-service technology systems are developed (Pujari, 2004) to most effectively meet the needs of customers and the organisation. It has already been shown in the literature that SSTs can be used to enhance customer service (despite limited staff involvement), pay bills, track delivery times (Bitner et al. 2002) and undertake other services which do not require staff involvement. Organisations are introducing SSTs rapidly for three major reasons: to reduce costs, increase customer satisfaction and loyalty and to reach new customer segments (Bitner et al. 2002). SSTs are increasingly being utilised in business (Meuter, Bitner, Ostrom and Brown 2005) due to people being time poor and as a drive towards cost savings for the organisation. While increasing customer loyalty is aligned with the objectives of Relationship Marketing, reducing costs is simply an organisational driven initiative and may not serve the interests of the customer. Furthermore, although time savings lead to cost savings for organisations, this is only apparent if the SSTs are adopted by the customer (Meuter, Bitner, Ostrom and Brown 2005). This means organisations must give customers no choice (potentially decreasing satisfaction) or encourage use of the technology by ensuring customers use the technology efficiently and having them feel there is support if anything goes wrong or presenting them with a compelling reason as to why they should use such a service. Preference for humans Although there are benefits to using SSTs, customers often prefer to deal with humans for some services (Marr and Prendergast 1993). Johns (2012) indicates that some business customers are more relationship oriented than others, supporting Lovelock’s (1991) belief that the target market and industry should influence the choice of delivery system. As Lovelock’s study was conducted prior to Internet banking usage, it is important to consider the use of Internet-enabled SSTs. Furthermore, the producer and consumer are often viewed as separate in marketing, however, when considering SSTs, “…the consumer is always involved in the production of value” (Vargo and Lusch 2004: 11). This means the customer must use and repair the service themselves, based on their requirements (Vargo and Lusch 2004) and this impacts on perceptions of service quality (Bitner et al. 2002). This is particularly an issue because most SSTs do not have service recovery systems in place (Bitner et al. 2002) increasing dissatisfaction with the technology and potentially the brand. Face-to-face face contact has been widely regarded as necessary for the establishment and strengthening of relationships (Jayawardhena, Souchon, Farrell and Glanville, 2007; Crosby, Evans and Cowles, 1990, Winstead, 2000), however more recently it has been suggested that customers can be satisfied with an increased transaction focus, providing this is a choice for the customer (Johns, 2012). This is particularly important in a B2B context. With the understanding that SSTs provide benefits to customers, but that face-to-face contact is important in establishing and strengthening relationships, the second research proposition is: Proposition 2: Increased use of SSTs reduces relationship closeness Australasian Journal of Information Systems Volume 18 Number 3 2014 8 Co-creation and customer satisfaction With the introduction of SSTs, consumers are required to carry out the transaction themselves; they are responsible for their own satisfaction (Meuter and Bitner 1997; Bendapudi and Leone 2003) and as a result, organisations have had to effectively train customers to be co-producers. In order to effectively engage in self-service, therefore, customers must have sufficient skills and core competencies (Vargo and Lusch 2004) or have undertaken training on service use to make this self-service possible. Training, however, is often not available as most organisations implement SSTs as a cost and staff cutting measure and cannot justify training customers. The most likely obstacle to getting customers to utilise SSTs is getting them to change their existing behaviours (Meuter et al. 2005) and from a B2B perspective there is limited understanding of SSTs and how the use of these technologies impact on relationships between the marketer and customer (Johns et al. 2009). In addition to potential issues with the use of SSTs, criticisms regarding using the Internet in B2B relationships indicate that the separation of buyers and sellers can be problematic (Ratnasingam and Pavlou 2003). This potentially impacts on trust and, ultimately, loyalty to the relationship, but there is little evidence of this in the literature. A theoretical overview: B2B marketing A broad perspective on B2B Marketing is provided in the literature, drawing on theory from economics, psychology, anthropology, sociology and management (Peters, Pressey, Vanharanta and Johnston, 2013). Cooperation is considered vital in establishing and strengthening any business relationship (Wilkinson and Young, 2002) and trust is a priority area of the B2B literature. Despite a lot of research into trust, however, more conceptualization is needed in a B2B context (Young, 2006). Some researchers have explored the end of an interfirm (B2B) relationship (Young and Denize, 1995 and Bogomolova and Romaniuk, 2009) and others have focused on improving problematic interfirm relationships (Pervan, Bove and Johnson, 2009). B2B marketing has a number of key themes: sales management, buyer behaviour, innovation, marketing management, distribution and finally buyer-seller relationships (LaPlaca and Katrichi, 2009). This current study explores buyer-seller relationships and how management of these fragile and important relationships impact on marketing strategy. Since the debate and discussion of Service-Dominant Logic commenced (Vargo and Lusch, 2004), the concept of value has increased in the B2B literature, with researchers exploring co-production (Chen, Tsou and Ching, 2011). With the understanding that trust is essential in B2B relationships and commitment is developed through trust, but cocreation is undertaken in a self-service context, the final research proposition suggests that: Proposition 3: An increase in SSTs decreases trust and ultimately commitment Summary of the literature review This brief review of the literature has indicated the nature of interfirm relationships and the importance of these relationships. Furthermore, current understanding regarding the impact of IT on business relationships was discussed as this is the purpose of this research. The nature of trust in relationships and the requirement of trust to build loyalty is increasingly understood by marketers (Morgan and Hunt 1994) yet there is limited examination of how IT impacts on important B2B relationships. Table 1, below, provides an overview of the literature discussed. Australasian Journal of Information Systems Volume 18 Number 3 2014 9 Dimension Author Method Relevant findings Commitment Morgan and Hunt, 1994 Quantitative Trust is necessary to build relationship commitment in an interfirm context Trust Young and Wilkinson, (The role of trust and cooperation Conceptual Firms need a strong relationship with their interfirm partners in order to develop efficiency Face-to-face contact Jayawardhena, Souchon, Farrell and Glanville, 2007 Quantitative Face-to-face contact is necessary to establish trust The impact of technology on relationships Johns, 2012 Qualitative Although the literature states that relationships require face-to-face contact, there is a consideration that some customers prefer to transact at a distance Separation of buyer and seller Ratnasingam and Pavlou 2003 Quantitative The Internet can be problematic to relationships due to the separation of buyers and sellers Technology Trust and Trading Partner trust Ratnasingam and Pavlou 2003 Quantitative In business relationships facilitated by technology, there are two different kinds of trust, both important: trust of the trading partner and trust of the technology Table 1: Summary of the broad relationship literature While the literature suggests that complementary IT services can add value to a relationship (Stone and Woodcock 1997; Grimm 1999) there seems to be a requirement for face-to face contact to ensure trust and, subsequently, relationship commitment (Rocco 1998). The major research question this study answers is “what impact does the use of SSTs have on interfirm relationships?” Although Relationship Marketing theory assists in providing a theoretical background to the study, the extant literature does not address the impact of self-service use on relationships in a B2B context. As the use of SSTs has increased in B2B contexts, this paper explores this gap by working toward answering three research propositions: Proposition 1: Business customers want relationships with their service providers Proposition 2: Increased use of SSTs reduces relationship closeness Proposition 3: An increase in SSTs decreases trust and ultimately commitment Australasian Journal of Information Systems Volume 18 Number 3 2014 10 METHODOLOGY The industry context As a sample frame, this study used the banking industry; the reasons were two fold (a) this industry has been fundamentally changed by self-service technology, and (b) the issues of trust and loyalty being important to maintaining existing customers have been recognised in the banking industry. Previous research in bank marketing has primarily focused on personal customer banking (Pujari, 2004) however over recent years businesses have increasingly utilised technology in managing relationships (Gummesson, 1996 and Johns and Perrot, 2008). It is therefore important to understand how the use of technology impacts on relationships between banks and commercial customers. A focus on banking is particularly important due to the importance of customer relationships in banking (Barnes, 1997; Colgate, Auckland and Alexander, 1998) and within a B2B context (Kandampully, 2003; Gummesson, 2008b). The banking industry is renowned for its innovation in service delivery and distribution and this has been a method of differentiation in the industry for decades. In order to ensure that banks remain competitive, alternative means of distributing banking products have been considered for many years (Pikkarainen, Pikkarainen, Karjaluoto and Pahnila, 2004). In recent years, banks have been promoting online banking as a convenience for customers and for cost savings for the banks. Consequently, the research presented in this study is essential to understand the impact of SSTs on business banking relationships. Qualitative research methods are appropriate in this study due to the exploratory nature of the work. Qualitative methods can contribute to understanding the way managers interact with other players in the market (O'Donnell and Cummins, 1999) and are appropriate for exploring relationships. With a gap in the existing research, it is necessary to consider the area from an exploratory perspective, calling for the use of qualitative research methods. Semi-structured interviews were utilised to collect data because they give an insight into an individual’s behaviour and attitudes (Tull and Hawkins, 1990) and are effective for collecting data from business customers (Curran and Blackburn, 2001). Table 2 indicates which methods have been utilised in the past in previous studies in similar areas: Australasian Journal of Information Systems Volume 18 Number 3 2014 11 Authors Focus of study Method/s utilised Pujari, 2004 Self-service encounters, B2B Satisfaction and dissatisfaction Critical incident method Joseph, McClure and Joseph, 1999 Service quality in the banking sector Focus Groups Lang and Colgate, 1993 Banking – Personal bankers Quantitative only – survey Mulligan and Gordon, 2002 The role IT plays in supporting relationships between customers and marketers in the financial services industry Personal bankers Personal interviews of banks Chan and Lee, 2002 E-Procurement adoption by SMEs Case study - interviews with small businesses; observation; document review Walker, Craig-Lees, Hecker and Francis, 2002 Adoption of technology enabled service delivery- B2C Focus Groups Durvasula, Lysonski and Mehta, 2000 B2B Relationship Marketing – Ocean Shipping Quantitative only - survey Meuter, Bitner, Ostrom and Brown, 2005 Focus on trial of SSTs Innovation Adoption Focus Quantitative- survey of groups who have used the technology vs. Those who have not Table 2: Review of previous studies’ methods As indicated in the table above, researchers have previously use a variety of methods for collecting data in similar studies. While there are advantages to various methods, it was deemed most appropriate to use semi-structured interviews, because of privacy and security concerns and to obtain a more indepth response. Table 3 indicates a summary of the respondents. Australasian Journal of Information Systems Volume 18 Number 3 2014 12 Respondent profile n= Banks interviewed n = 6 Business customers interviewed n = 25 Decision makers n = 13 Users n = 12 Transaction-oriented customers n = 13 Relationship-oriented customers n = 12 Small organisations n = 13 Medium organisations n = 7 Large organisations n = 5 Table 3: respondents for the study During the analysis process, the twenty-five business customer respondents were categorised by the business customers’ role with the banking institution into the role of ‘decision maker’ or ‘user’. This was particularly important due to the differences in the two categories of users (Zaltman, Duncan and Holbeck 1973; Leonard-Barton and Deschamps 1988; Gallivan 2001). While a decision maker invariably utilised banking services, they were also the person in the organisation who selected the bank the business banked with and, in many cases, had more control over the tools used in banking. Data was analysed both manually through thematic analysis and by the computer programs NVivo and Leximancer. NVivo requires the researcher to conduct coding in the initial stages, while Leximancer develops codes and maps based on these codes through its thesaurus of terms. Both computer programs were used due to the advantages of both and also to allow for a comparison of data analysis and more thorough analysis of the data. (A table comparing the software is provided in Appendix One). FINDINGS AND IMPLICATIONS For some respondents, loyalty to a company’s bank was established through the bank developing a thorough understanding of their business. This built up over time through negotiations with the bank. It was evident that the relationship exists between the business customer and the business banker. If either party changed, the loyalty may no longer exist. In general, decision makers were more favourable toward the relationship with the bank, compared with users. (An overview of representative quotations and summary is provided in Appendix Two.) The interpersonal relationship between banks and businesses was identified as being between two people and therefore relationship dynamics would differ if another person came into the role in the customer organisation, or another relationship manager took over. In addition to personality and authority, respondents stated that a good relationship manager had a good understanding of the customer’s business requirements. During the interviews it was discovered that two types of customers existed – those who were transaction-oriented and those who were relationship-oriented and size was found to not be an indicator of orientation toward SSTs. It was found that both transaction and relationship-orientated customers behaved differently and had different issues. Australasian Journal of Information Systems Volume 18 Number 3 2014 13 Relationships in B2B banking services Proposition 1: Business customers want relationships with their service providers The research uncovered a new contribution to the literature – while the literature states that business customers want relationships with their service providers, this proposition was deemed to be untrue in the context of SSTs, for some customers. It was clear through the research that for relationship-oriented customers, transactions can be facilitated through self-service transactions, but relationships were essential for building loyalty. For transaction-oriented customers, however, interpersonal contact was seen as unnecessary as almost all transactions could be conducted at a distance and required no discussions with the bank staff unless a problem arose. Many customers had to go to the branch, regardless of whether they were transaction or relationship-oriented, because they need to deposit cash. Several customers explained that in the branch they were generally not known by the bank staff. According to the data, a relationship banker, willing to spend time to understand a unique business structure, could have considerable influence on how much an organisation was able to borrow and therefore had a huge impact on business growth. Some respondents claimed their business structure allowed them to avoid any real relationship with the bank and focus purely on transactions. For example, one young business owner, in his twenties, stated that he fell into a customer category that was not catered for, as the business was not of a significant size. He explained that this was not completely based on his generation, but rather about the way certain people embrace IT. The banks felt that relationships were shifting, and this was generational. Younger people tend to be online more and, as a consequence, want to do all transactions online. This lowered loyalty to the bank brand because there was no real relationship. While there were divergent views relating to whether business customers had a preference for relationships with their service providers or not, the service providers (banks) had a different perception. The banks did not understand that transaction-oriented business customers existed. Instead the representatives interviewed believed that relationships were essential for business customers. For example, one quote stated: Oh (relationships are) critical. Particularly for small business, you need to be there and available to them. It’s not like doing a home loan where you’ll only hear from your customer once or twice a year. With a business client you’re probably talking to them once or twice a week (Bank 2, Manager) There are some business customers still seeking and requiring a relationship. Through this analysis, two distinct segments in the business banking market have been identified – those primarily seeking a transaction and maintain a relationship at a distance, and those requiring a relationship where they choose to work closely with their business banker. Research proposition 1, therefore, is deemed to be only partially correct – not all business customers seek relationships with their service providers. Proposition 2: Increased use of SSTs reduces relationship closeness The research indicated that the increased use of SSTs does alter relationships and relationship closeness for transaction-oriented customers but not for relationship-oriented customers. The change in the nature of the relationship is simply a business evolution but it was something that was acknowledged by both the banks and the business customers interviewed. IT has changed the nature of relationships, according to the banks interviewed, creating increased bank switching. Aside from not physically seeing customers as regularly as they had previously, there was a perception that there was a reduced loyalty to the relationship due to the technology. A decision maker, boasting a thirty year relationship with their bank, stated that he was still aware of who the bank manager was, however he stated “I haven’t really spoken to them much and I’m probably Australasian Journal of Information Systems Volume 18 Number 3 2014 14 having less to do with them now than I used to” (R1, Decision maker). He reported that this was not problematic, nor did it affect his loyalty provided the technology worked. He did comment, however, that it was essential to establish a relationship in the initial business set up stage. Technology results in business customers having more control over their regular daily transactions; however, this can reduce the level of loyalty. The findings indicate that loyalty can be generational, or can be related to cash flow requirements for the business, however bank customers are less loyal than they were in the past. Furthermore, with the use of technology in business banking, relationships are less valued than they were in the past. As the younger generation become decision makers in business there is the potential that they will prefer to transact at a distance, rather than through having a strong, interpersonal relationship. This research proposition is not completely accepted: increased use of SSTs shifts some relational aspects for transaction-oriented customers, but for relationship-oriented customers, there is very little impact. Loyalty and Trust Proposition 3: An increase in SSTs decreases trust and ultimately commitment The research indicated that an increase in SSTs decrease trust and commitment for transaction-oriented customers, but not for relationship-oriented customers. Commitment was explored primarily due to its importance in the relationship marketing literature. There was no real pattern in terms of commitment, with a fairly even mix between ‘low’ and ‘strong’ levels of commitment. However, as indicated in Table 4, there were differences with relationship-oriented customers: Level of Commitment Transaction based customers Relationship based customers Low R5, R8, R13, R15, R16 R2 Medium R20, R21, R23 R3 Strong R9, R10 , R14, R17, R19 R1, R4, R6, R7, R11, R12, R18, R22, R24, R25 Table 4 – Commitment to bank as rated by interviewees Although Table 4 above indicates both relationship based customers and transaction-oriented customers can have a strong degree of commitment, there is more diversity in commitment for transaction-oriented customers while the relationship based customers were mainly found to have a high level of commitment to their banks. The results illustrated in the table show that it could be expected that relationship-oriented customers are loyal to the relationship. Although not all relationship-oriented customers have a strong commitment to their bank, this was only apparent when there have been disruptions to the relationship and they would like to move but feel they cannot (in the case of R2) or when a user feels their boss is loyal, but has no particular reason to be loyal themselves (in the case of R3). In contrast, it is very difficult to predict how loyal a transaction-oriented customer is likely to be, due to the diversity of responses. The data indicated that commitment and trust was built on long term interactions, rather than through self-service delivery of technology. Commitment and trust are outcomes of interactive relationships, while self-service delivery was perceived as merely fulfilling a transaction. Therefore relationship- oriented customers were more likely to trust their business partner than transaction-oriented customers. However trust comes in several forms, and trust in the technology was present for the majority of Australasian Journal of Information Systems Volume 18 Number 3 2014 15 customers regardless of whether there was a relationship or transactional exchange. Table 5 indicates factors leading to commitment for each segment. Factors leading to Loyalty Transaction based customer Relationship based customer Trust of the bank Trust of the banking industry Switching cost perceptions Organisation’s value offering Carefully targeted promotion Personality of individual people/ individual interactions Table 5: Factors leading to commitment for the customer segments Both segments reported that carefully targeted promotion fostered commitment. This can be seen in the table above. Switching cost perceptions, however, were the main reason to stay for the transaction segment while trust and interactions with their relationship banker and bank staff fostered loyalty for the relationship-oriented segment. The differences in the segments are illustrated in Table 6: Transaction customer: Relationship customer: Embraces IT Accepts IT Gets value from technology working Tends to be a ‘user’ Tends to be younger Tends to be technologically savvy In banking – tends not to require funding Tends to have a complex business structure Tends to prefer relationships with other organisations Views technology as separate from the interpersonal relationship In banking – tends to require funding Table 6 Customer segment profile characteristics While commitment and trust existed in varying degrees for all customers, there were different types of commitment evident. Calculative commitment is a more complex form of relationship loyalty where the customer perceives it is difficult to replace their trading partner so stays in the relationship (Kumar, Hibbard and Stern 1994). This was evident with some transaction-oriented customers where the switching cost perception saw them maintain a relationship that they were not particularly satisfied with. Other respondents stated that they would switch if a cheaper partner was possible. In contrast, affective commitment is associated with positivity toward the relationship (Kumar et al. 1994). For the relationship-oriented customers who felt a strong level of relationship loyalty, affective commitment was present. Therefore, proposition three, that an increase in SSTs decrease trust and ultimately commitment, is correct for the transaction-oriented customers, but not for relationship-oriented customers. Australasian Journal of Information Systems Volume 18 Number 3 2014 16 FINDINGS LINKED BACK TO THE LITERATURE I don’t know what the future is for Internet banking. At the moment, it ticks a lot of boxes, but if any one of those boxes weren’t ticked, you’d have a problem with it. It doesn’t really exceed expectations, though, does it? (R19, Decision maker). Two customer segments were identified in the research – those primarily seeking to transact and those primarily seeking an interpersonal relationship with the bank. The findings in this study indicate that the use of IT does not impact on relationships for relationship- oriented customers, due to their perception that the technology and relationship is separate. For transaction-oriented customers, both trust and relationship loyalty were altered, however, these customers still prefer the use of technology. Technology is continually improved and utilised in organisations, this study has examined how technology, and its use as a transaction medium between two businesses, can impact relationships. Relationship Marketing requires building and maintaining long term relationships (Gummesson 2008). Previous literature acknowledges that not all customers require relationships and that ‘Transaction Marketing’ is the opposite of Relationship Marketing. Despite the existence of Transaction Marketing in the literature, the findings in this study differ from those in the literature on Relationship Marketing and Transaction Marketing. Transaction Marketing in the literature is focused on what the customer is purchasing, generally taking a short term, discrete transaction perspective (Grönroos 1995; Brodie, Coviello, Brookes and Little 1997; Ivang and Sørensen 2005). This means that some industries want relationships while other industries are prone to transactions. For example, purchasers of fast moving consumer goods (FMCG) will generally not seek a relationship with the marketer, while professional service customers will. It has also been argued that in a service context, relationships are essential (Grönroos 1995) and that Transaction Marketing applies in a goods context (Baker, Buttery and Richter-Buttery 1998). The literature relating to Transaction Marketing is about personal customers rather than business customers (Baker et al. 1998) and it is suggested that Relationship Marketing is more applicable for business customers. While this study does not contradict the extant literature, it contributes by finding that when SSTs are introduced, some business customers will move to a transaction-based approach to their relationships. The study found that, on the basis of their relationship preference, business customers should be segmented. The belief in the literature that ‘commercial bank customers want an interactive relationship with their bank’ is no longer appropriate and an understanding of different customer relationships is necessary by banks. While this research found that these two distinct groups of relationship preferences exist, it also found that some business customers could not be completely categorised into these two relationship groups. This is because some customers will require relational elements but seek transactions that work, and other customers will prefer transactions because a relationship has been established in the past. The findings indicate, however, that customers with a pure transaction orientation will not develop the depth of trust and loyalty to the relationship that relationship-oriented customers will develop. While trust and loyalty still exists for transaction-oriented customers, the trust of the banking industry and the loyalty to their bank is usually caused through a perception of switching costs, rather than a real loyalty to work in an ongoing relationship with their business partner. Another major contribution relates to the use of SSTs. Much of the literature on SSTs indicates that technology forms the main basis of the relationship and has an impact on brand image. This was found to be true for the transaction-oriented respondents, however, for relationship-oriented respondents, technology was perceived merely as a means to conduct a transaction and was viewed as separate from the relationship. If the technology continually fails, the relationship would be reconsidered. On the other Australasian Journal of Information Systems Volume 18 Number 3 2014 17 hand, for most relationship-oriented customers, technology was perceived as just one component of transaction and relationships were based on interpersonal contact. Value-adding through technology A perception of being forced to utilise technology in a relationship can drive a customer to resist the technology (Godson 2009). Egan (2004) believes that marketers should not attempt to replace human relationships with technology, particularly if technology is used for business efficiency rather than for value-adding. According to the findings in this study, all respondents saw the use of technology as value adding through improvement in their business efficiency. For some respondents (the transaction- oriented segment), value is derived through the use of technology. This segment does not wish to have a regular, interpersonal contact with the marketer. In contrast, the ‘relationship’ segment perceives the relationship as adding value and the technology as merely a means of transactions. This finding deviates from Egan (2004)’s recommendation that relationships should not be replaced with technology; and suggests that banks should provide both as a choice to ensure they are targeting both segments identified. This research indicates that when trust of the bank was established prior to the use of technology, this had an impact on the perception of technology. This was unexpected and significant. These results showed that businesses who perceive their relationship is unsatisfactory will also have an unsatisfactory opinion of the technology provided by their bank. Furthermore, businesses that have a positive relationship with the bank will also have a positive impression of the technology provided. The research therefore shows that customers also seemed to perceive a separation between the technology and the relationship, viewing technology issues as separate from the bank particularly when there was a positive relationship with the bank and problems with the technology. This requires further exploration. The necessity of customer segmentation: Transaction and relationship customers This discussion has highlighted the necessity of customer segmentation, because some business customers seek a interpersonal relationship with the bank while others do not. While the literature considers ‘transaction marketing’ to be making a sale (Godson 2009), the description of the transaction- oriented segment is a group of customers not seeking a traditional B2B relationship. The relationship- oriented segment of business customers identified in this research, in contrast, tends to mirror the behaviour described in the existing Relationship Marketing literature of business customers. The literature divides marketing into two types – Relationship Marketing and transactional marketing - but in this literature the key distinction is in what the marketer offers rather than what the customer seeks (Gummesson 1987). In banking, relationships are crucial to differentiate the offering (Godson 2009) but the findings in this study indicated that some customers just wanted to be ‘left alone’. Little empirical research exists to indicate what triggers a shift from transactional to Relationship Marketing (Grönroos 2004). The findings from this study indicate that customers seeking a transactional relationship, rather than an interpersonal relationship, do so because they see no value to themselves or their business in having an interpersonal relationship with the marketer (or bank). Our research shows that the likelihood of shifting toward a relationship is limited for these customers and therefore we suggest that research should not focus on what triggers a shift from a transaction- orientation to a relationship-orientation but, rather, should consider what makes some customers value relationships and whether there are segmentation variables to consider. This study has explored both aspects and results indicate that customers with a complex business structure require face-to-face relationships. Further research is needed to explore this is more detail. Marketers must design their service offerings so that customers have the opportunity to establish the relationship they want with the marketer – at a distance, or with proximity - but marketers should be Australasian Journal of Information Systems Volume 18 Number 3 2014 18 aware that customers with a more distant relationship tend to have lower loyalty and decision making develops into being more based on price of the offering than anything else. Marketers must also be aware that the technology side of the relationship is transactional. This research found that only interpersonal contact establishes and builds interpersonal relationships. Customers relying completely on technology do not build a relationship with the marketer – instead, they focus on the transaction elements and separate this from the interpersonal relationship. This has the possibility of reducing loyalty. For transaction-oriented customers, value is in technology that works and other factors such as lower prices (fees in a banking context). Loyalty exists with transaction customers but if a superior offer becomes available they are more likely to consider switching than are relationship customers. Relationship based customers, in contrast, seek a deeper relationship. Their loyalty is focused on people and the organisation, rather than switching costs, and are therefore less likely to switch even if there is a better offer available. While they utilise the technology and find it essential for business efficiency (and therefore get value from the use of this technology) they place more value on their relationship with their business banker. This is due to a high level of trust and relationship loyalty and a long term focus of the relationship. Technology assists all customers, regardless of which segment they belong to, in undertaking daily transactions but too much emphasis on technology can be detrimental to the relationship and ultimately reduce loyalty. Wagner and Boutellier (2002) argue that transaction marketing applies to a discrete transaction where there are limited, if any, future exchanges. The literature even identifies that in discrete transactions, relationships can occur (Cousins 2002). There is, however, an absence of literature relating to a segment of business customers that appear in a typical relationship context, such as banking, but are transaction focused. This may be due to the introduction of SSTs and this research suggests that this segment of customers will continue to increase. The findings of this research are consistent with this growth. Figure 1 provides a graphical representation of the data. Figure 1: Relationships in a self-service context Figure 1, above, indicates the differences between relationship-oriented and transaction-oriented customers. While relationship-oriented customers interact with the organisation through both technology and face to face interactions, commitment is built through trust and as a result of this, interpersonal relationships are preferred. For transaction-oriented customers, however, commitment is Australasian Journal of Information Systems Volume 18 Number 3 2014 19 a result of switching cost perceptions, rather than trust. These customers trust technology and therefore interact with their business partner through technology. IMPLICATIONS FOR MANAGERS, THEORY AND FURTHER RESEARCH Customer segmentation is a key requirement of B2B relationships. It is no longer sufficient to state that ‘business relationships require interpersonal relationships’. Managers must therefore work toward an understanding of customer needs and utilise customer segmentation in implementing Relationship Marketing principles. From a theoretical perspective, a new theory of Relationship Marketing within a self-service technology context is called for. Marketers must have a good understanding of the two customer segments this research has discovered. Building trust and relationship loyalty is essential for the relationship segment; switching costs for the transaction segment. The existing theory on trust and relationship loyalty is still relevant in a self-service context for a group that wish to continue a relationship orientation however this does not apply to other customers such as the transaction-oriented group. The existing literature discussed indicates the relationship-orientation of business banking. The findings in this study, however, suggest that transaction-oriented customers also exist and utilise SSTs. The findings of this research have shown that this segment of transaction-oriented customers is likely to grow. Relationship-oriented customers, in the past, have primarily been the focus of customer interaction by the banking industry in a B2B context. This paper has highlighted that there is a growing transaction-oriented segment. Due to changes in banking as well as the further advancement of SSTs, it is expected that in the future the transaction segment will grow. The future direction of the transaction-oriented customers remains unknown. Evidence suggests that even the most loyal, relationship-oriented customers are increasingly becoming transaction-oriented because of the pervasive nature of the self-service technology; however the implications from this arise when a distance arises between the customer and the marketer which impacts negatively on loyalty to the relationship. While some customers still seek proximity to the marketer, this is generally related to specific business process requirements. It is therefore feasible to accept that in the future the transaction-oriented customer base will grow considerably through expectations, time constraints, and satisfaction with the technology. The relationship-oriented customer base will shrink through the perception that the bank prefers them to engage at a distance and through a lack of requirement to engage in interpersonal relationships. Loyalty is threatened through this however, as switching cost perception remains high, loyalty to the relationship will still remain. The three research propositions have been explored in the research. Table 7 provides an overview of whether the propositions were supported or not: Australasian Journal of Information Systems Volume 18 Number 3 2014 20 Proposition Correct for relationship- oriented customers? Correct for transaction-oriented customers? Proposition 1: Business customers want relationships with their service providers x Proposition 2: Increased use of SSTs reduces relationship closeness x Proposition 3: An increase in SSTs decreases trust and ultimately commitment x Table 7: Support for the research propositions The existing literature shows no consensus on the impact of technology on business relationships (Lang and Colgate 2003; Stone and Woodcock 1997; Joseph 1998). Some authors believe too much technology in relationships can be problematic (Lang and Colgate 2003), while others believe technology is of benefit to the relationship (Stone and Woodcock 1997; Joseph 1998). This research has argued that both schools of thought are partially correct. Two distinct segments of business- customers have emerged through the research. One is a very technologically savvy segment, who would prefer to do most, if not all, of their business activity at a distance. They do not require a relationship with a human being, but do require someone they can call on if technology fails. The other segment is more traditional and prefers to maintain an interactive interpersonal relationship with the bank providing its facilities. This is demonstrated in Figure 2. Figure 2 outcomes of relationship orientation, versus the outcomes of a transaction orientation The diagram above indicates the traditional Relationship Marketing outcomes of trust and relationship loyalty (Morgan and Hunt 1994) for the relationship-oriented customer. In contrast, transaction- oriented customers demonstrate trust for the banking industry. Satisfaction may be an outcome of the relationship; however, it is not apparent in all cases. Australasian Journal of Information Systems Volume 18 Number 3 2014 21 All interviewees had an established relationship with their bank prior to their use of Internet banking. The potential changes to how bank client relationships are established when new business owners are establishing businesses are yet to be determined. Business relationships with banks might be set up completely online in the future which will have an impact on how trust and loyalty are established. Further research could be conducted with new business owners, perhaps focusing specifically on Generation Y business people. Two key segments have been identified, there is much uncertainty as to who will embrace technology as a basis of the relationship and who will prefer a relationship based on interpersonal interaction. Organisational demographics are not an indicator, although some capital constraints of the new businesses may be. Further research is needed to explore these aspects in detail. Novelty of the research This research makes a contribution to an area of literature that has been neglected in the literature – that is, an understanding of how the use of SSTs impact on fragile and highly valuable interfirm relationships. Research in services marketing is emerging with greater importance, the market is expanding, and at the same time, the use of technology is increasing. As a consequence, it is essential that there is a greater understanding of the impact of technology on relationships. This paper has provided some surprising findings: that technology is more likely to impact on relationships, trust and commitment for transaction-oriented customers. This is likely due to the lack of commitment in the relationship, and the fact that technology is perceived to be the primary relationship facilitator for this customer segment. 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Australasian Journal of Information Systems Volume 18 Number 3 2014 24 APPENDIX ONE: COMPARISON OF USE OF THEMATIC ANALYSIS; NVIVO AND LEXIMANCER Method Features Comments Thematic Analysis Judgement by the researcher involved in all aspects Researcher gets very familiar with the data Qualitative research requires an interpretative stance by the researcher, making this an appropriate tool of analysis. Researcher comes to a conclusion about the meaning NVivo Storage of documents into project sets Ranking of search-drive words Coding of works, Phrases, Sentences as Nodes Coding across several documents Mapping of coded nodes Researcher judgement required for coding and map development Developed out of Nud*ist Powerful analytical after coding completed Leximancer Storage of documents into project sets Integrated package with word rankings, summarisation of documents, Thesaurus features to enhance theme/ concept sources. Automatically draws maps with links of association between theme and concepts Can be set to purely automatic Based on sets of Bayesian Conditional algorithms with capability to factor in wider searches based using Thesaurus options Powerful range of mapping capabilities Very good pre-processer for Net- map Source: From Flick‘s (2002) discussion on thematic analysis and Pattinson’s comparison of Leximancer and NVivo (2005) Australasian Journal of Information Systems Volume 18 Number 3 2014 25 APPENDIX TWO: SAMPLE OF QUOTATIONS FROM THE INTERVIEWS Respondent Quote Comment Decision maker vs user R19, Decision maker if I had of walked into the organisation and (MY BANK) were the bankers, I’d have no specific loyalty to them, but my loyalty comes from a point where we were at a real growth stage and a pivotal point for the business... that’s built a fair bit of loyalty.... At least while I’m here. I think it’d change if I left, someone else came in, because they’d just be like “oh it’s a functional relationship, just like any other business relationship”. So although you’re satisfied, you’re not necessarily loyal and that would happen if I were to walk into another business as well. There is a difference is trust for the organisation, based on the role within the customer organisation. For instance, decision makers were more likely to express a higher degree of trust and satisfaction than users were. This quote was representative of the views of all respondents. Role of the relation- ship banker R 18, Decision maker It’s 100% the little things. You don’t call on them for support for Internet banking or something like that.... You only ever use it for the important stuff. You don’t use it to save $8 on a bank cheque This respondent reported demonstrated a belief that there was an advantage to a full relationship and acknowledged differences between transactions requiring interpersonal contact and transactions that did not. This was representative of the views of all relationship-oriented customers Switch- ing service provid- ers R19, Decision maker If you go through BANK 5, although the relationship manager’s a good guy, he just had no authority. Every time we’d have a meeting, he’d just go “oh, look, I’ll have to come back to you”.... (now) I could ring our relationship manager and say “we’ve got a proposal to spend $500 000... I’ll send through a business plan on it and she’ll come back within 24 hours with any questions and an approval. With BANK 5, that’d have to go to Sydney, they’d do all the ratio testing.... it shows a lack of understanding for a business like ours. This respondent explains why they switched banks. Part of their reason for this switch was the limited approval authority of the bank manager and requirement for a greater understanding of their business It is evident through this statement that the respondent wanted to be clear that the relationship manager at the first bank was a ‘good guy’ and he stressed this several times throughout the interview. He stated that the understanding at the second bank was essential to their business banking The import- ance of Face-to- Face contact R19, Decision maker I think an understanding of the business (is essential) and that’s where it differs from someone on the end of the phone. There are certain elements of our business which are very different from others For some customers, it was important to have face to face contact, as indicated in the quote included. Australasian Journal of Information Systems Volume 18 Number 3 2014 26 Relat- ionships with the relation- ship banker R11, Decision maker The human being is very important, but the bankers have got to the point that they change them every year. The customer is always the same and I think what happens is they change them purely because of promotions... BANK 5, probably about five years ago... as soon as they felt your relationship banker was getting too close to you, they moved them because it concerned them... conflict of interest kind of thing, so it was like an oxymoron to the relationship banker. That policy is long changed at the B5. But that’s how they were, probably only about five years ago. B8, now... you get a new relationship banker, it’s mainly due to promotions. The training aspect of their next one is well and truly aligned with “well now this is the customer... you have to treat them really, really well”. So when they do move on, the next one is well and truly trained in terms of the importance of... customers I suppose This quote indicates a former relationship manager policy help by a bank. This was counterintuitive to the establishment and strengthening of the relationship The lack of face to face contact R2, Decision maker They have business banking centres, but they’re not really set up for transactional banking from a business. You still have to go into a branch and stand in queue with everyone else who could be there for God knows what reason. The quote demonstrates that business customers are not given any priority over personal customers in a branch, despite the promises of ‘business banking centres’ which are meant to offer customers value added services. This impacted on customer satisfaction. The import- ance of face to face contact R19, Decision maker In the early days, (our relationship banker) would just come out here. She’d come out here 5 o’clock, 6 o’clock at night, sit down here, have a chat, work through what we’re doing, that kind of thing. That built a lot of loyalty between the company and the bank.... Just that at the time when the business needed the bank, they were there for us A unique business structure increased the need for organisations to have face- to-face contact with their business partner. This was a common perception, with a number of relationship-oriented customers indicating a need to explain their business structure carefully to their bank, as it impacted on their use of bank servies. Australasian Journal of Information Systems Volume 18 Number 3 2014 27 Servic- ing a customer segment R8, Decision maker Customers like me at present are so insignificant (in numbers) that catering for us .... they’re not going to bother, but as soon as that shifts toward people like me, the demand is going to be huge. ... they’re paying people... they could pay less staff, make more money and therefore serve us better.... that’s a win win, for both the customer and the bank. They make more money and I get better service. How does anyone lose? And there’s a first mover advantage for anyone who picks up this field This customer explains the importance of banks fulfilling the needs of a “niche” customer segment. He explains that ‘customers like me’ were not completely based on his generation, but rather about the way certain people embrace IT. This was a common perception among business customers with a transaction- focus Custom- ers embrac- ing tech- nology R8, Decision maker It’s willingness to accept the technology... embrace it, really. It’s being comfortable with (the technology)... and not being scared of it. I don’t think you need to be savvy to actually get to that level. I think people can be comfortable and go “yes I trust it” without necessarily understanding it. Now I understand it as well but I don’t think that’s a ... component necessarily of trusting and accepting it This respondent discusses a category of customer that prefers to transact- only, through technology Import- ance of the inter- personal relation- ship R19, Decision maker The business is in a very strong position now, but that’s only because of the support of this group of people back when we were in the building phase. That’s where this real loyalty has come from, I’d be very hesitant to change accountants, hesitant to change lawyers, bankers. These are people we’ve worked with and formed a relationship with One relationship-oriented customer stated that their relationship was due to an individual within the bank. This was a common perception between relationship-oriented customers