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Virtual Customer Service Agents: Using Social Presence and Personalization to Shape Online Service Encounters

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Course
Master Thesis

Institution
Vrije Universiteit Amsterdam (VU)

Master's thesis on the role of Virtual Customer Service Agents on the online service experience

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Uploaded on February 3, 2017
Number of pages 45
Written in 2009/2010
Type Class notes
Professor(s) Unknown
Contains All classes

vcsa
social presence
personalization
service provider
communication style
anthropomorphism
virtual customer service agents

Institution
Vrije Universiteit Amsterdam (VU)
Education
Bedrijfskunde
Course
Master Thesis

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Virtual Customer Service Agents
Using Social Presence and Personalization
to Shape Online Service Encounters

Jaap van Nes (1471090)
November 25, 2010

Master Thesis ‘Business Administration’
at VU University Amsterdam

Supervised & co-authored by
dr. Tibert Verhagen & dr. Frans Feldberg

Acknowledgements: The Selfservice Company & dr. Alexander Schouten

1

,1. Introduction
In the digital age, online service encounters are critical to a customer’s image of service

providers and central to determining the success of the firm (Grönroos 2000). These moments

of dyadic interaction between customer and service provider are key since the service

encounter often is the service from the customer’s point of view (Bitner 1990; Czepiel,

Solomon, & Suprenant 1985). Service providers have shaped these online service encounters

to the advantages of the Internet by providing permanent availability of information and

allowing for real-time interaction between customer and company. Through tools like

frequently asked questions (Meuter et al. 2000), live chats (Andrews & Haworth 2002), and

customer communities (Armstrong & Hagel 2000) service providers effectively and

efficiently supply customers with sought-for information. Despite their successful usage the

vast majority of these applications still fail to incorporate two characteristics that are assumed

to be key in delivering an optimal service encounter: feelings of social presence and a sense

of personalization (Bitner et al. 1990; Suprenant & Solomon 1987).

Social presence compasses the feeling of personal, sociable, and sensitive human contact

conveyed through and within a medium (Short et al. 1986; Yoo & Alavi 2001), while sense

of personalization is the extent to which a customer feels the content offered is appropriate,

based on personal information and tailor-made to their needs (Bonett 2001; Lee & Park

2009). Both elements are strongly associated with a customer’s feeling of social and personal

support (Bearden, Malhotra & Uscátegui 1998). More importantly, they represent two

fundamental building blocks of the service encounter as encounters rely heavily on

interpersonal contact (Shostack 1985), are by and large of social nature (Bitner 1990), and

theorized as low tech, high touch moments of truth (Bitner et al. 2000; Drennan & McColl

2

,2003). Due to the distant and computer-mediated nature of the Internet, both elements have

been quite difficult to incorporate in online service encounters.

However, empowered by recent developments in technology a new tool to provide online

service encounters has arisen: virtual agents. Virtual agents, computer-generated characters

able to interact with customers and simulate behavior of human company representatives

through artificial intelligence (Cassell 2000), have been introduced as an alternative way to

provide online service encounters compassing the ability to integrate social and personalized

components. Building on social response theory (Moon & Nass 1995), scholars have put

forward that virtual agents can fulfill the role of service representatives and substitute tasks

historically performed by human service personnel (Meuter et al. 2000). Therefore, virtual

agents prove an exemplary tool to address the lack of interpersonal interaction (Dabholkar

1996; Dabholkar & Bagozzi 2002) found online and to elicit feelings of social presence and

senses of personalization, thereby responding to the call for integration between technology

and personal aspects of online service delivery (Berry 1999).

Despite the suggestion that virtual agents are able to represent elements previously unfeasible

in online service encounters, research has not yet empirically investigated how virtual agents

can be employed to shape and improve online service encounters. Moreover, although it has

been noted that virtual agent impressions affect consumer processing (e.g. Keeling et al.

2010; Nass & Moon 2000), research on virtual agents thus far disregarded the question

whether elements historically shown to be at the heart of service conception, i.e. social and

personalized contact between the customer and service provider, are also central elements in

online service settings. In this study we aim to answer these intriguing research questions.

3

, In an attempt to adapt elements from traditional customer service literature to shape online

customer service encounters by virtue of virtual agents we focus our inquiry on three

classical service agent characteristics: friendliness, expertise, and smiling, and the moderating

roles of anthropomorphism and communication style on service encounter evaluation. The

impact of these agent characteristics is explicated through the use of several streams of

research, such as implicit personality theory (Anderson 1995), the theory of primitive

emotional contagion (Hatfield et al. 1994), social response theory (Moon & Nass 1995), and

social interaction theory (Ben-Sira 1980).

Our decision to select friendliness, expertise, smiling, anthropomorphism, and

communication style was backed up both theoretically and rooted in practice. Being polite,

responsive, helpful and understanding is claimed a paramount property of service delivery

(Price et al. 1994), as is possessing the required skills and being knowledgeable about the

service (Parasuraman et al. 1985). Yet, despite, or perhaps due to, their general and widely

applicable nature friendliness and expertise are only occasionally employed as predictive

variables and research on their role in online service encounters is limited (Witkowski &

Thibodeau 1999). Moreover, literature on the importance of serving customers with ‘an

American smile’ is redundant (e.g. Hennig-Thurau et al. 2006; Pugh 2001), but little research

is conducted on whether smiling service representatives elicit the same responses when the

interaction is mediated by technology and with a computer-generated character. From a

practical perspective the interaction between the three agent perceptions allows consumers to

get a complete impression, both verbally and non-verbally, of the agent by appraising what

(expertise), how (friendliness) and with what emotion the agent delivers the service.

4

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