Academic journal article Academy of Entrepreneurship Journal

Consumers and Technology in Small Businesses: Are We Creating Relationships or Distance?

Academic journal article Academy of Entrepreneurship Journal

Consumers and Technology in Small Businesses: Are We Creating Relationships or Distance?

Article excerpt

ABSTRACT

The rapid speed with which technology is allowing consumers to communicate with and contract for services from small companies is having a tremendous effect on the relationship that these organizations have with consumers. However, the area applying interactive communication technology to customers and services is lacking (Sheth & Parvatiyar, 1995). This paper investigates consumer perceptions of technology as it affects the relationship between the consumer and a small business. An exploratory qualitative approach was used to gather pertinent data from a small business. Based on the data collected, technology appears to assist in satisfying consumer needs, but technology may not enrich relationships with customers. The more value enhancing consumer-organization relationships are generally formed through favorable human interface between the consumer and the organization. Our findings suggest that the use of technology by small businesses, while potentially helpful, may create drawbacks with regard to developing steadfast customer relationships. In fact, there is some evidence to suggest that technology may tend to create greater distance between the two parties.

INTRODUCTION

Relationship marketing has been a captivating topic since Dwyer, Schurr, and Oh (1987) published their work on buyer-seller partnerships stating, "both business marketing and consumer marketing benefit from attention to conditions that foster relational bonds leading to reliable repeat business" (p. 12). Other studies followed with each applying relationship marketing to different circumstances such as channel relationships, business alliances, and services marketing. Sheth and Parvatiyar (1995) suggest, "particularly lacking are studies on relationship marketing in the consumer markets" (p. 255). Peterson (1995) echoed this sentiment by stating "research that explicitly focuses on relationship marketing, regardless of whether or not conceptual, empirical, or both, has focused on business-to-business relationships" (p. 278) and not in other areas such as business to customer marketing relationships.

Recently, some important inroads in the use of technology in service encounters were offered by Bitner, Brown, and Meuter (2000). They explored the changing nature of service encounters and offered methods on how these incidents could be improved with the use of technology. Meuter, Ostrom, and Bitner (2000) studied self-service technologies and found that it: (1) increased customer satisfaction, (2) solved urgent needs, and (3) customers liked its convenience. The dissatisfaction with technology included: (1) technology failure, (2) poor service design, and (3) customer driven failure. Thus, the rapid speed with which technology is allowing consumers to communicate with, and make purchases from, small and large organizations is having a tremendous effect on the relationships with customers. While many studies on customer relationships exist, few have investigated the possibility that technology may actually increase the perceived distance between consumer and the small business owner.

Investing in consumer relationships via technology empowerment of the customer may be a promising avenue to increasing customer loyalty (Coviello, Brodie, Danaher & Johnston, 2002). With interactive communication technology available to many, relationship marketing can move from concept to reality for the first time. The notion of one-to-one marketing sounds attractive, but does this actually breed a unique marketing relationship for a small business compared to their larger rivals? The purpose of this paper is to explore consumer perceptions of technology as it affects the relationship between the consumer and a small business. Does technology truly help us come closer to that one-to-one concept? Understanding how technology affects the consumer-organization relationship is of great importance to companies that are striving to be relationship-oriented. …

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