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for communally-
and exchange-oriented customers. In fact, we have argued that
communally-oriented customers may experience difficulty in establishing the friend-
ship-like (affect-based) relationships they value. In fact, although E-banking
technology may provide customers with a service environment that is highly reliable
and high in functional quality, these environments are largely devoid of human
interaction. Without the communication richness and social presence intrinsic to
traditional retail banking settings, it may be difficult for banks to effectively attract
and hold onto communally-oriented customers who may be less satisfied in an E-
banking environments. Because alternatives become increasingly available and
switching costs are reduced, customer volatility is likely to increase.
Although we have suggested that E-banking environments should lead to
greater satisfaction and the ability to establish trust for exchange-oriented custom-
ers, the lack of richness or social presence in such environments may potentially also
have negative consequences. The lack of richness/social presence may become
salient to exchange-oriented customers if service failure occurs. Primarily, this is
because richer communication channels (i.e., face-to-face) may be more effective
in responding to customer queries and in dealing with service failures. Smith et al.
(1999)
suggest that, because service failure induces a negative emotional response,
customers get more emotionally involved and watchful of the actions taken by the
organization to remedy the failure. Failure to remedy may actually bring about more
dissatisfaction than the failure itself. Lovelock (1994) has suggested that this effort
to gain back disgruntled customers may actually win their loyalty because it
represents a demonstration of service excellence. The availability of rich (as
opposed to lean) communication channels may enable the bank to better under-
stand the problem at hand and guide its recovery efforts more effectively and in a
more timely manner. However, without such a trigger (i.e., failure), the ability to
generate trust in exchange-oriented customers should remain unabated. Conse-
quently, when dealing with exchange-oriented customers, it is possible for banks to
build customer loyalty in E-banking environments. However, our analysis also
suggests that the type of loyalty that emerges in these technology-supported
environments (which may be termed as ‘E-loyalty’) may be particularly sensitive to
negative deviations in service performance because of the predominance of
technological rather than emotional / interpersonal bonds. Particularly, for banks
operating in pure E-banking environments, increased attention will be needed to