review

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Conceptualizing Customer Experience Quality in Taxi Aggregation context

Cristina Mary Alexander Research Scholar, Pondicherry University

D.H. Malani Srinivasarao Assistant Professor, Pondicherry University

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Abstract

Purpose: This study attempts to conceptualize the holistic view of customer experience in taxi aggregator context. The relationship of the antecedence on customer experience quality and the outcomes are depicted in the model.

Design/Methodology/Approach: A detailed literature review help in developing a model in measuring the customer experience quality in the context of taxi aggregators.

Findings: Customer experience is the gaining momentum in consumer industries as it is the key differentiator and creates competitive advantage to the firms. Customer experience in a holistic perspective includes all the direct and indirect interaction a customer has with all the service touch points. Customer experience quality encompasses service quality but also include indirect encounters of the customer. Thus, in totality the study identifies the pre-service experiences, direct experience encounters and post service experience outcomes.

Research Limitations/Implications: A better understanding of customer experience quality has implication on the decision makers as; it gives insights to customer behavior and helps build a blueprint for providing superior customer experience.

Originality /value: This is the attempt to develop a model to quantitatively measure the customer.

Keywords: Customer Experience Quality, Taxi aggregator, Antecedencs, Outcomes.

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Introduction: Customer experience has become the buzzword in today’s business. It has become an important tool for the business to create a competitive advantage. A study conducted by Forester consultancy, to find whether experience driven business have better performance found that good customer experience has enhanced the performance of business. Pine and Gilmore (1999) stated that a distinctive customer experience can improve the economic value of the firm. The case of United Airlines brand crisis is one of the best examples for the consequences of a bad customer experience in a technological era. This example show that customer experience is an emotional connection; positive and negative emotions are created based on how the customer is treated during their journey .It is thus evident that a creative blend of technology, process and people are needed to create a superior customer experience. Customer experience is defined by (Meyer and Schwager, 2007 p.118) as “the internal and subjective response customers have to any direct or indirect contact with a company”. The definition according to (Gentile, Spiller and Noci 2007, p.397) states that “customer experience originates from a set of interactions between a customer and a product, a company, or part of its organization, which provoke a reaction. This experience is strictly personal and implies the customer’s involvement at rational, emotional, physical and spiritual levels”.

Some of the initial studies on customer experience are by practitioners (Pine and Gilmore 1998; Berry, Carbone and Haeckel 2002; Meyer and Schwager 2007; Shaw and Ivens 2005). The empirical investigation on customer experiential features was done

by Gentile, Spiller ,and Noci (2007) further a holistic view of customer experience was studied and a conceptual model was developed by Verhoef et al (2009). They have identified determinants of customer experience as social environment, service interface, retail atmosphere, assortment and price; these experience component creates a cognitive, affective, social and physical responses to the services. According to the model an experience is created not only by the elements that the company can control but also the factors that cannot be controlled like customers social interaction. However, there is no empirical investigation to test the model. Today, customer experience has become a part of all services, this study focus on taxi aggregators. Few empirical investigation was found in the area of travel experience, studies done by (Dell’Olio et.al., 2011; Herrmann et.al., 2000) focused on service quality of transit services. The holistic investigation of travel experience of public transport services was done by Carreira et.al., 2013, the result revealed that travel experience is created during the customers contact points with the service provider, hence a holistic perspective beyond transit quality factors should be considered for any study. The definition of travel experience was given by Carreira et.al., (2014) as” the total individual responses originating from all passenger interactions originating from all passenger interactions with transportation service and across all moments of transportation provision.” With this backdrop there is a need to understand the customers experience with taxi aggregators from a holistic perspective. The following objectives contribute to the comprehensive understanding of the travel experience:

i. What factors influence the taxi aggregators

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customer experience through customers journey with the transport service provider

ii. What are the likely consequences of a holistic experience with a service provider.

iii. Develop a conceptual model for taxi aggregators service experience.

An Overview Taxi Aggregators in India: Indian taxi industry has undergone a phenomenal change since the emergence of new taxi aggregator business model. It has become a panacea for the inability of the government to address the mounting requirement of public transportation and dearth of well maintained vehicles, tampered meters and unruly behavior of drivers were a nightmare for passengers in India. The rapid increase in the number of internet and smart phone users have paved way for the growth of app based cab service providers in India. Started in 2011, with two major players Uber and OLA the number of aggregators have grown exponentially. The increasing number of aggregators has driven competitiveness, pressurizing the aggregators to focus more on proving a superior experience to the customers.

Paradigm shift from service quality to customer experience: Erstwhile research (Parasuram et.al., 1998) focused on Service quality. The difference between service quality and customer experience lies in the premise that, service quality are measured when the customer encounter the service at the place of service provider whereas experience is the one which customer encounter at every touch point throughout the customers overall journey with the company (Berry & Carbone, 2006). Zeithml’s (1998) definition on service quality is challenged by Voss et.al., (2008) who argued that service quality is transaction specific and does not consider sequence of touch points.

Customer Experience Quality: Measurement of customer experience was attempted by several researchers (Chang & Horng, 2010., Maklan & Klaus, 2011.,

Lemke et.al., 2011) who contributed models of experience quality. The definition of Customer Experience Quality is given by Chang and Horng (2010, P.2401) as “the customer’s emotional judgment about an entire experience with an elaborately designed service setting”. Experience quality measures not only covers the cognitive aspect of service quality (Parasuraman, Zeithmal & Berry,1998) but also covers affective ,social and physical aspects .(Dziewanowska, 2015., Verchoef et.al., 2009). Customer Experience quality is defines by (Lemke, Clark & Wilson; 2011),” as a perceived judgment about the excellence or superiority of the customer experience.” A holistic definition of customer experience was given by (Verheof et.al., 2009) in a retail context “as holistic in nature and involves the customer’s responses to the retailer. This experience is created not only by those elements that are outside of the retailers control like; service interface, retail atmosphere, assortment, price; but also by elements outside of the retailers control like; influence of others, purpose of shopping; additionally customer experience encompasses the total experience, including the search, purchase, consumption, and after-sales phases of the experience, and may involve multiple retail channels”. This study is an attempt to holistically view taxi aggregator services taking into consideration the model developed by (Verhoef et.al., 2009).

Measures of Customer Experience was developed by (Lemke, Clark & Wilson; 2011). They developed Repertory grid method in order to explore the tacit perception of the customers. Klaus & Maklan (2012) developed a scale with four dimensions product experience, outcome focus, moments-of-truth and peace-of-mind that reflect the service experience perceptions and the impact of customer experience quality on the important marketing outcomes. Study on public transport study conducted by (Cascetta & Carten, 2014) states the factors that attributes to service quality as qualitative (like riding comfort, information and personal security) and quantitative factors like reliability, transit

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waiting time, monetary cost). This paper adopted the model of Verhoef et.al., (20) identified the dimensions of taxi experience quality perception that is divided into pre- service encounter, service encounter and post service behavior. Pre-service encounter consist of customers interaction with other customers, encounter with company communication. Service encounter includes technology interaction, accessibility of cab, reliability, interaction with driver and perception of price. These pre-service encounter experience and service encounter experience create a customer quality perception, further the outcomes of experience quality are perceived quality, satisfaction, word of mouth, purchase intention and loyalty.

Pre-service encounters: Pre-service encounter takes place when the customer gains knowledge about the firm through their marketing communication or interact with the other customers to understand their experience with the service. Voorhes et.al., (2017) in their study has divided the service encounters into three phases pre- core service encounter, core service encounter and post-service encounter. The pre-core service encounter was defined as “the time interval preceding the core service encounter that focuses on leading customers to engage with the firm in the core–service encounter”. This stage may include the encounter with the communication with the company, information search initial contact and on boarding activities Voorhes et.al., (2017).

Customer-to-customer interaction: Customer-to customer interaction plays an important role in creating a brand salience and identity (Muniz & Schau, 225) which is followed by perception about the quality of service and satisfaction. The interaction of customers need not be in the service context alone, this may be with friends and peers, may shape our thinking about a brand. A failure to deliver excellence at the pre service stage can decrease the customers overall perception of the service experience. Voorhes

et.al., (2017). However, less attention was given to customer-to customer interaction in a pre-service stage (Karpen, Reid & Yuksel (2014). According to them CCI can take place outside the service setting between an acquainted or an unacquainted customer. It is thus, important to understand customer-to customer interaction which plays a vital role in forming a positive experience perception in the minds of the customers.

H1:Pre service customer-to-customer interaction is considered to be a determinant of customer experience quality in taxi aggregator service context.

Company communication: Interaction of the customers with the marketing communication activities are sources for forming positive or negative experience perception. These are the sources through which customer gains information and knowledge about the product, their brand equity and brand choice is thus based on it (Beales et al., 1981; Wright and Lynch, 1995). This includes the encounter of the customer with the advertisement, reviews on online sites and encounter with print materials. According to (Lavidge and Steiner, 1961) the major functions of the advertisement are to create awareness and knowledge, create an emotion that leads to preference and liking which finally creates a motive that leads to purchase and conviction. The effective way to convey messages on search attributes and experience attributes are the contents in the advertisements Wright and Lynch (1995). (Edvardson et.al., 2014) found that intangible artifacts that include films, music, pictures assist in creating customer image about the company in turn creating a realistic pre- purchase experience .Customers perception about the experience of the brand can be created after reading a customer review. (Lackermair, Kailer & Kanmaz, 2013).

H2:Marketing communication by the company is considered to be a determinant of customer experience quality in taxi aggregator context.

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Service encounters: The definition of service encounter is given by Voorhes et.al., (2017) “as any discrete interaction between the customer and the service provider relevant to a core service offering including the interaction involving provision of the core service offering itself”. According to (Gronroos, 1983., Neil & Palmer 2003) Technical and functional quality are two important aspects on which customer experience is dependent upon. In the taxi aggregator context service encounter includes the interaction of the customer with the technology, with the driver and other service related aspects like reliability, accessibility (Parasuramam et.al., 1985). These are the service quality determinants in taxi aggregator context. In a study conducted by Gang & Dong () using SERVPREF found that driver plays an important role in creating a memorable experience with the passengers and should be provided adequate training.

Technology: The major difference between a traditional taxi service and taxi aggregators are that; taxi aggregators operate on app-based technology platform. The customers first core service encounter with the company is thus, the mobile technology that helps them to book the cab. All the transactions like payment, information about the arrival, drivers name are done through the mobile application of the aggregators (Kim, Lin & Sung, 2013). Thus, technological interaction plays a vital role (Edvardsson et.al., 2000) in creating ease and convenience or detrimental in creating customer experience Stein & Rameswshan (2016) and if a mobile app fail to provide value customers will disengage with it Viswanathan et.al., (2017).

Employee –Customer Interaction: Driver Behavior: The quality of Driver–customer interaction in a core service setting is a major factor in determining the repeated use of brand by the customer. The perceptions of the behavior of taxi drivers are different in different cultures.

For instance, In India there are many cases where drivers of cab aggregators have turned abusive, these incidence may create a negative image about the company as well as their perception of the experience they get from the taxi aggregator. Stein & Rameswshan (2016) found employee-customer interaction can have negative influence on the customers.

Safety: Safety here indicate the safety of customers boarding into the taxi, there are several incidences where the passengers are abused by the taxi drivers .In the light of these incidence this variable is considered as important for forming a positive or negative impression about the company.

Reliability: Parasuraman et.al.,1985 defines reliability as “consistency of performance and dependability, accuracy in billing, keeping records correctly, performing the service right at the designated time”. In taxi aggregator context reliability is the availability of the cab at the right time. Cab services are experience– based services hence, reliability plays an important role in creating positive experience to customer and hence judge the service based on the heuristic information such as waiting time, information about service encounter, contact with driver (Galetzka, Vehoeven, Pruyn, 2006), their study found that service reliability has an impact on the satisfaction of the customer.

Atmospheric: The term atmospheric was coined by Kotler (1974) the environment in which consumer has to avail the service. The design of the physical characteristics that customers notice Stein & Rameswshan (2016) in the service environment arose emotional effects on the buyers, thereby increasing their chances to avail the services repeatedly thus, having direct impact on customer experience. (Edvardson et.al., 2014). Most of the study (Ballantine, Andrew & parsons, 2010., Baker et.al., 2002., Turley and Milliman, 2000) focused on retail setting. However, taxi aggregators should make sure

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that the vehicles are in good condition and comfortable for the passengers.

H3:Employee –customer interaction (driver behavior, safety perception), Reliability of the service provider and atmospheric are considered to be determinants of experience quality drivers in taxi aggregator context.

Price: Price and incentives are factors that contribute to quality perceptions about a brand. According to (Martin, Molina & Esteban, 2007., Marshall, 1980) customers are willing to pay excess or accept the price if they derive satisfaction from the service. In case of cab services, customers choose a cab service with a comparatively less price and more incentives. Taxi aggregators are known for charging surge prices in India, these moves by the company can impact the loyalty of the customers, it is hence, important for the company not only to communicate the price but also justify the reason behind it (Martin, Molina & Esteban, 2007). The price perception of the service has thus impact on the purchase intention of the customer (Munnukka, 2008).

P4:Price is a determinant of experience quality

Post –Service Experience: Customer Grievance Handling: This is the last stage of customers journey with the company, it is important for the company to understand and deal with the complaining customers with much care as they can give a positive word of mouth about the company (Gurber, Szmigin & Voss, 2009., Stauss, 2002) which is powerful communication tool. Complaint handling is an opportunity by companies to create a competitive edge (Infosys, 2018). However, customer complaints have to be dealt with utmost caution by the companies as it’s a powerful weapon to create as well as destroy the goodwill of any company.

P4:customer grievance handling is a determinant of experience quality.

Conclusion and Research Implications: The study adopted the model developed (Verhoef et.al., 2009) in the retail context modified to taxi aggregator context. An attempt to develop a comprehensive approach to understand the customer experience quality of the private taxi service providers, taxi aggregators in specific. The conceptual model divides factors that contributes to experience as pre-service encounter, core service encounter and post-service encounter and concludes the factors under these service encounters are drivers for forming perception about customer experience quality.

An empirical evaluation of the study gives idea on achieving a predefined service quality, performance of the service provider and the opinion of customers on their experience at different touch points. In a similar study by (Carreira et.al., 2014) on public transport bus facility; they have taken seven factors ;Individual space, information provision, staff’s skills. Social environment, vehicle maintenance, off-board facilities and ticket line service found that all these seven factors have significant impact on cognitive, emotional and behavioral response of the customer.

Pre-Service Encounter Experience

Core service encounter experience

Post service exprience

•Customer - Customer Interactions (Word of Mouth) •Company Communication (Advertisments other promotions of the company) •Past experience with the company

•Technology •Service aspectus (atmostpheric, driver behaviour, safety, Reliability) •Price

•Complaint handling •Feedback from customers

Customer Experience Quality (cognitive, affective, social, physical)

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However, this study pertains to private taxi providers insights to taxi aggregators to design their services to provide a superior service to customers and policymakers to frame sustainable policies.

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