A Tale of Two Banks: Customer Services on Facebook

Purpose: Service encounters have attracted a great deal of interest in the marketing literature. The conventional approach to service encounters limits its scope to human interactions between organisations and their customers. A broader view of the service encounter takes into account all aspects of the service encounter, including human interactions between a service provider and its customers, remote interactions, the service environment and other visible elements of a service, which is labelled as “the total customer experience”.

We argue that, with the emergence of social media (SM hereafter) platforms as another service delivery and customer services channel, social media service encounters (SMSE hereafter) are likely to make an impact on the total customer experience. However, research into service encounters is largely dominated by traditional service encounter communications. Hence, by focusing on Facebook as a newly emerging SM customer services channel, our research aims to provide an insight into SMSE and present empirical evidence on the following issues:

RQ1: Why do people post a customer services query on Facebook?
RQ2: What is the quality of the interaction between firms and their customers on Facebook?
RQ3: What are customers’ expectations of service encounters on Facebook?

Methodology: The context of this study is the banking industry. The focus is on two leading British banks. The research data consist of customers’ initial banking queries posted on banks’ Facebook pages, banks relies to these initial posts, and further follow ups by customers and banks. The data collection took place in summer 2013 which resulted in 451 and 492 posts on BankA and BankB Facebook pages respectively. Consequently, 943 posts were analysed by using qualitative content analysis, which was facilitated by NVivo 10 data analysis software.

Findings: Evidence is presented on the discrepancy between what customers expected of SM and what banks were prepared to offer, which resulted in customer frustration. Customers viewed their bank’s Facebook page simply as another banking channel and expected their queries to be addressed to their satisfaction. However, the banks were prepared to deal with basic banking queries only and directed a considerable number of queries to traditional channels. This seemed to cause further tension between the parties since a large number of customer posts were service failure related queries that had already been raised via traditional channels. In the course of investigating whether such banking policy could be explained due to the regulatory restrictions on the industry, we have identified substantial differences between the two banks, which were working under the same regulation, as well as differences within the banks.

Managerial Implications: The findings demonstrate that, apart from banking regulation, a bank’s own SM policies, and the training and empowerment of its staff are likely to impact on the quality of firm-customer interactions on SM. It is challenging for financial institutions to develop strategies to address customer queries satisfactorily on their SM pages and at the same time work within the rules of compliance regulations.
Moreover, many customers who put up a complaint on SM are observed to have developed rather negative feelings to their banks and lost their trust, suggesting a lack of clarity about the limited role of banks’ Facebook channel among the sample of customers. Service providers need to be very clear about the role of their Facebook channel and communicate this to their customers well; otherwise their customers’ level of satisfaction is likely to be threatened.