Rethinking Self-Service As A Customer Experience

6
423

Share on LinkedIn

In our recently released Customer Experience Consumer Study of 1,994 consumers established that customer experience matters to them even in this economic environment. The consumer verdict was very clear, exceptional customer experiences are rewarded with premium price, longer relationship and larger purchases even during a recession. When asked to identify the drivers to exceptional customer experiences, consumer pointed to human interactions with their favorite vendors. Self-service channels such as web and IVR did not show strong correlation to loyalty and future purchases.

This result was validated in multiple customer experience diagnostics we conducted at clients in the last several years. Although self-service channels are required to be easy to use and intuitive, consumers do not attribute loyalty to interactions through these channels. I would go a step further to state that by shifting customers to self-service channels, companies are trading cost with loyalty. That is that companies manage to reduce cost of service by using self-service channels but they do so at the expense of future loyalty. In a nutshell, the self-service channels are not perceived by customers as differentiators but rather as a one size fits all provided similarly by all vendors.

When investigating this phenomenon we interviewed customers to understand the source of the issue. The common perception of self-service channels was that they are a way for companies to shift the work to customers. “Companies are asking me to serve myself while charging me the same price” was one of the comments we encountered in our research. “When I need to service myself that means that the company is not doing anything for me” was another popular response. In all response one thing was clear, although convenient, self-service channels are perceived by customers as a way for companies to reduce costs not service customers better. There is no added value perceived by using self-service options. The primary focus of those channels is company profitability not customer centricity. From the customer perspective, it was a simple exercise in outsourcing. Companies outsourced tier one service to their customers without paying them for the efforts. (some companies took it a step further by actually establishing penalties if you call the call center as a form of deterrent.)

On the other hand, traditional human interactions such as retail and call centers were ranked at the top with high correlation to customer loyalty and future purchases. The reason was quite simple. These channels represent experiences in which customers feel that the company served them, added value and delivered a unique value to the customer.

Can self-service be a differentiator? The answer is yes. But it dependents on your intentions and willingness to design it around the customer and not around your processes. Two examples come to mind.

1. The check in self-service option provided virtually by all airlines today is a great example of a successful self-service channel. Customers who selected this option benefited from greater freedom. They were now able to see the complete seating arrangement on the plane and selected their preferred seat. This option was not available through airport check in or the call center. The airlines were willing to trade off more power to customers in exchange for cost reduction.

2. NikeID.com is another great example that was later followed by other shoe brands. The company allows customers to design their own shoe from scratch and customize it to his or her personal taste. Such individually designed shoes now cost on average 50% more than the Nikes you can purchase at Foot Locker. In this case Nike traded design control for higher margin revenue. They allowed customers the freedom of design and managed to command a premium price.

At the heart of these two examples is the concept of co-creation. Self-service channels that became differentiators were the ones when a company allowed the customer a creation role in the process. When companies did not try to dictate the whole process but opened their self-service to become a platform for customers to express themselves and bring their individuality into the final product or service. Technologically speaking co creation is feasible. It is often corporate culture and rigidity that prevent companies from achieving it. Often companies feel that by allowing customers to express themselves some sacred brand rules will be broken or compromised. But if the brand is here to engage the customer, then lets engage him or her the way they want to be engaged.

Would all self-service channels be candidates for co creation? Probably not. In the same way that not all self-service channels are differentiators. Many of these channels can be and should be differentiators if we rethink them from the perspective of customers and co-creation.

We do need to rethink our self-service strategy. Following the cost reduction path comes with a hefty price most companies are not aware of. Consider the following statement “We can reduce calls into our call center by 10,000 customers a month. This will result with $30,000 savings a month. However it will also reduce the likelihood of these customers from buying from us again by 45%” How many CEOs would approve such proposal? Yet this is exactly what we do when we do not measure the impact on customer loyalty and view the cost reduction in the complete customer relationship context.

It is time to rethink self-service with a target of not jus easy and intuitive experience, but as a delightful, differentiating experience. That will require placing the customer at the center of the design. Allowing customers to contribute to the design and individualize the outcome. The way we measure and determine the success of the self-service channel must be in context of creating future loyalty and not just in reduction of complaints. And in some cases, we may have to accept the fact that self-service might not be the answer. In some cases we may discover that human interaction is the right way to go to create differentiation and future loyalty.

If saving costs through self-service costing you future customer loyalty, it is time to rethink your self-service strategy. And if the answer to the above question is ” I don’t know” then you are definitely overdue for your self-service strategy assessment.

Lior Arussy
One of the world’s authorities on customer experience, customer centricity, and transformation, Lior Arussy delivers results. His strategic framework converts organizations from product- to customer-centricity. It is drawn from his work with some of the world’s leading brands: Mercedes-Benz, Royal Caribbean, Delta Air Lines, MasterCard, Novo Nordisk, Walmart and more.Arussy is also the author of seven books, including Next Is Now (May 2018)

6 COMMENTS

  1. Lior, THANK YOU! Your article is one of the few, it may be the only one, that I’ve read on this forum or another I participate in that is related to retail customers’ experiences that addresses the common thought(?) that self-service is tantamount to good service. The only relationship these two terms have is that they both contain the same number of letters.

    There is a place, however, where self-service is an improvement over the service one would like to find with the stores or business they want to do business with. That is when the sales help is so uninformed that no one can rely on what they say. Hence, customers are required to do the job the salespeople are not capable of doing. This means that customers do not, as you stated in your articles, want to pay full price when they have to do what they expect the business to do. . . or, to look at it from the other other side, if the business does not lower the price, customers will not buy it.

    There is, as my mentors taught me, the “added-value” factor – that people want more that they are paying for and if they do not believe they are getting it, they will offer to pay less . . . the ultimate of less is ZERO!

    There are several things customers can do . . . and we are customers too . . . one is when we are required to serve ourselves and we don’t buy, and that is to write to the president of the company starting off with, “I almost bought something from your store today . . . . ” Maybe then they will understand who pays the bills that helps keeps their doors open.

    Another thing that might change the picture is to ask every CEO, CFO, board members and stockholders to shop in one of their stores but not letting the salesperson know who they are. . . or try to buy something via the self service method they ask their real customers to do.

    Many years ago a friend of mine was asked to speak to the board of directors of a major retailer. He started off, he told me, by asking how many of the board members bought something from one of their stores? The answer, stunned silence that was deafening. He told me he said, “Thank you, its been nice to meet you,” and made a move toward the door but sad down at their insistance. Funny, he got paid his full fee. I asked him about 2 years later if he thought the company had made any changes or if the did as he asked and he told me he didn’t think they had. The company was sold and is not even the shadow of what it was.

    Third, every CEO and CFO should be required to be a salesperson for a week in every department of their store. If, in some departments they balk because they do not know anything about the merchandise. . . . well, welcome to customer reality . . . but don’t let them off the hook.

    Will any of these “cures” happen? I believe it will only happen when business schools make that a prime requirement for every student and graduate to do.

    Thank you for saying it like it should be said.

    Alan
    Alan J. Zell, Ambassador of Selling, Attitudes for Selling
    http://www.sellingselling.com [email protected]

  2. I agree with your central point, that few self-serve experiences raise to the level of adding to a company’s brand and driving customer loyalty.

    On the other hand, I think you may be selling the importance of basic self-service short. While the basics can save companies money, mor importantly self-service provides customers with access and efficiency that they demand.

    Pay at the pump or walk in the gas station? Wait behind that cart of groceries or check your one item out yourself? Write checks out at my lunch hour or pay bills at night on my computer?

    As you state, it should not about dollars and cents. It’s about customer needs. And self-service is a basic, core requirement for an increasingly larger customer segment.

    I agree with the inspirational call to innovate and differentiate. But for many, getting self-serve basics right is an important first step.

  3. Kevin,

    Thank you for your comment. There is some basic value in self service which if you examine the self check in service availbale on line or at the airport, you can recognize the advantage over waiting in lines. We need to distinguish however between touch points that add value and differentiate and those that do not.

    Sending accurate invoice does not add value or differentiate. In that regard neither is self service. They are both necessary but not the reason to be loyal.

    Lior Arussy
    http://www.Strativity.com

  4. Alan,

    Thank you so much for the generous post. IIt seems sometimes that in our thrill to adapt the latest trend we forget the basics.

    Something strange happne to normal people when they swipe their id card and enter their corporate building. a sort of amnensia that makes them forget what it is to be a customer.
    then when they leave the building at night they go back to being custoemrs with all the missed expectations, rage and anger.

    If we could only bring our intrinsic customer into our workplace, life would be different and so would our customer experience.
    Lior Arussy
    http://www.Strativity.com

  5. In general I agree that self-service is not a great strategy to differentiate, especially if it provides a basic capability (think bank ATM) that is commonly available.

    You don’t get any “credit” for providing it, but can hurt your position by not providing, if that’s what customers want. Staying cost competitive is still critical, of course.

    But let’s take the airlines for example. Many airlines have an automated check in process now. And most work much the same, which is to say they just get the job done. Boring is the norm, confusing interface not uncommon.

    But I recently flew on Virgin America in the US and Japan Air Line to Tokyo, and both gave a better than average automated (kiosk) check-in experience. Very clear, easy, and fast. I almost want to say, “fun.”

    Anyway, because the self-service experience was better designed, it caught my attention and contributed to my positive experience on both airlines. Enough so that I’m mentioning it now.

    Self-service doesn’t have to be devoid of personality. Virgin Atlantic does a nice job bringing their brand image into their online booking site (http://www.virgin-atlantic.com/en/us/index.jsp) with “Hello Gorgeous!” at the top of the page. The Zappos web site is fun and interesting, very much in synch with their brand.

    All that said, our research finds that people are a stronger point of differentiation in customer experiences. Customers value employees that are friendly, competent and empowered to help them. Zappos sells 95% over the web, but invests in call center staff to ‘wow’ customers when they do call.

    Still, if designed right, self-service can not only cut costs but also deliver a brand-building experience. Just ask Amazon.com.

    And we’re already seeing brands like JetBlue, Comcast and Zappos use social media (Twitter) as part of their service experience. Social media, including use of company-run online communities, can help companies increase efficiency while also improving customer engagement. See Building the Social Customer Service Experience.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  6. Bob,

    I agree that there can be some self service options that are designed to delight. I have seen some developments from Genesys that are geared toward a smart IVR that provides a proactive, customized service.

    The first issue however is were these desigend to minimize costs or delight customers. what was the primary goal. based on the answer you will realize the quality and potential delight.

    The second issue is the simple fact that self service requires customers to service themselevs and doing so does not come across as added value and diferentiation.

    Tweeter is neat but I doubt it is a differentiating factor. We ought to distinguish between cool and loyalty creating.

    This second issue will force companies to seriously consider their differentiating touch points and how to redesign them. It requires a rethinking of what is cbasic in the relationship with customers and what is differentiating. see my recent eBook Exceptional Service which is availbale free on our web site http://www.Strativity.com

    Lior Arussy
    http://www.Strativity.com

ADD YOUR COMMENT

Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here