Conflicting views exist on the desirability of "service separation" for customers, say the authors of a new research report. Service separation occurs when a customer is "absent" from the "production" of a service, they explain. (Think: getting money at an ATM rather than having a live teller hand it to you; shopping online instead of with a salesperson helping you in a store.)

To isolate the benefits and downsides of service separation to customers, the researchers conducted interviews with consumers and conducted experiments. Among their findings:

• When a company offers both separated and unseparated service modes, customers will make tradeoffs between the benefits (e.g., convenience of online shopping) and the shortcomings (e.g., perceived security risk of online shopping) of service separation.
• Customers are more likely to purchase separated services from providers with whom they have established long-term relationships.
• "Firms can reduce the perceived risk attributable to separation by instituting customer relationship management," the researchers conclude.

The researchers also suggest that firms offering both separated and unseparated services may want to target them to different customer segments.

"To attract new customers, for example, the firm may offer the unseparated mode to prospective customers to diminish their perceived risk and thus increase purchase probability," they explain. "For long-standing customers, however, the firm can encourage them to use the separated mode by emphasizing its greater convenience."

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