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Self-service

When is self service going to get personal?

Grenville Main February 2010

The new appetite for self-service

It started out as an interview, but ended as Grenville Main and Hayden Vink having a conversation about trends in self service, and all sorts of other things along the way.

Gren

It seems to me that customers are innately cynical, and have a distinct view on value, both in cost terms and of their time  – so what challenge does that set for businesses in coming to terms with using different channels, picking which channels to focus on and in adding to personalisation and self service in their offer?

Hayden

Well the best way of seeing this for me is to draw the gold rush analogy – everyone is in a frenzy to get in first and stake a claim, without knowing what the stakes are or what the cost is. I think self service is on the rise, definitely, but not enough people understand the consumer mindsets to pull this off well..

Gren

The gold rush analogy is actually really interesting, in the sense that there is a sense of rush on, because people want to get ahead and get the gains with customers that they think are there. However as opposed to a gold rush - where it's really clear what you are after, it's been proven to be there and you've just got to go and start digging and you know you're bound to find it sooner or later - the thing with multi-channel is actually, what's the gold? I don't think people have actually figured out what it is, what's nirvana, what's the ideal outcome/destination/benefit? The problem here is you might turn up to the goldrush and find you're a bit late, and you might not get the best part of the river.

Hayden

Yes, we've got more technology, more channel options coming in to play, lots of whizzy toys you can build better experiences with - and just think, if you could integrate all your channels, well, wouldn't that be good. The trouble is, no-one’s really clear on the 'science' of how to actually make all of that work for the customer. 

Gren

How many examples do you actually see of this working?

Hayden

Powershop is a great one, you can actually get some unique benefit that many, many customers are quite intrigued by, but it doesn’t seem to bother them that they have to do a bit of work to be in control and save some money. Also at New World supermarkets they have recently launched the notion of the express checkout: self service.  In my experience - if it's less than ten items then it’s great, but it's early days and not clear yet in consumers’ minds that anything over ten items is a pain, and you need to choose the right solution at the right time.

Gren

And I know we have discussed before the Air New Zealand self-serve analogy - I like the notion of being in control, choosing when I fly, where I sit and all of that. I can save myself a whole bunch of time and see what deals are there. But sometimes it can take you a few minutes to do the whole booking, and actually I've just done a whole bunch of work. Sure, I’m in now in control of my experience a lot more, but by the same token I have to do a whole lot of work from end to end, and at the airport as well. Now that's something we've actually all adopted and adapted to quite rapidly, because somehow the airlines have sold it to us that we have little or no choice, that it’s something we have to do because they've had to save money in order to save themselves… Or maybe it’s just as simple as - sometimes to get what you want, you actually have to take control and do a bit of the work yourself.

Hayden

It's probably the latter, isn't it?

Gren

Yeah, it's probably the latter. And maybe that’s the thing – when you’re looking at multiple channels, I think businesses are concerned with trying to make things easier and simpler for the customer so they can save money for themselves and so more customers will spend money with them - but they’re too hesitant to actually confront the reality - that actually, if consumers want control, if people want to be able to do it themselves, then they’re going to actually have to do a bit of the work. It’s another example of us being in a cotton wool society. If self service is to be the ‘gold’ in all of this - that consumers get a personalised, tailored experience - businesses maybe just need to be a bit more frank and open and say yes you can do it, but that it is actually down to you to do it, or we may even charge you for the ability to do it.

Hayden

OK, so the key ingredients for good self service from business point of view are obviously cost savings; and certainly with online channels and the web, businesses can save money by serving people at a lower cost. But people realise that it’s cheaper for Air New Zealand for example to have online ticketing, or that it suits the bank if you use internet banking, so the success factor needs to be that it actually offers the customer something that they couldn’t get in the traditional channels. It either saves them time or money and ultimately giving them ultra-personal customer experience that acknowledges who they are and how much business they’ve done. So back to Air New Zealand customers - they’re prepared to put up with buying their own seats because they’ll save time, money and have a degree of transparency and perceived choice.

Gren

The Bank/Airline analogy is interesting - we seem to be in a transition zone. We’re not quite in the future state of total self-service that’s completely smooth, personalised and integrated yet. The intriguing thing around the airline self-service notion is that the benefits of self service are not just that it’s tailored , but that it’s actually starting to give customers the ability to make better judgements about what they really need and it’s putting them in control of deciding what they do and don’t value.  How much is that the real driver of the change we have seen, and do businesses understand that?

Hayden

I think that level of understanding probably isn’t so widespread at the moment. But it is changing...

Gren

It seems to be more the way many businesses are starting to pitch it to customers now – ‘you decide’, but if you go back a few years self-service was really all only about cost-saving.

Hayden

Like buying movie tickets online. That used to be purely a transactional experience, another way to buy your tickets, so merely a different channel option. There was no cost saving there. But recently - and you can see this at present with Avatar: 3D coming out - you realise that if you want to go and see it at a time you want to go and see it, you actually have to book online, because if you don’t then by the time you get there it’s sold out and you’ve missed out.

Gren

So it comes back, not just to value, but also to access. What you value, what you are prepared to pay, when you want to go to the movie, the premium for ‘reserving your place’ is about early access and being organised. So now when you book online it is surely more than just that you don’t want to miss out...it’s that you want to tailor your experience and consumers know that just cause the theatre is open you can’t always get what you want.

Hayden

Yes, and additionally it suddenly opens a lot of options for the theatre, they can offer you preferential seating at a price or reward you with that for loyalty and all of that.

Gren

Ah, loyalty. I often wonder, as a consumer, do I really need all of that? Is it just because everyone else is offering that so I’ve come to expect it? I think a more interesting question is whether you think consumer loyalty is affected by the ability to self serve and to personalise transactions.

Hayden

In terms of brand or the personal relationship a consumer has with a business - then yes, it is affected.  Because the offer of self-service should be something you’re doing for the consumer, you’re giving them a benefit and they like you more because you’re giving them control and making things easier and/or cheaper for them; you’re adding value.

Gren:

Ironically though, the more you allow customers to self-serve, the less opportunity you have to deliver value through the physical, people-based customer service side - in the case of a bank or airline. Do you think that because the customer is actually more independent that they are therefore likely to be less loyal to you?

Hayden

I think that’s the other side of the equation. The more you invest in self-service and let customers do more of the work, the more you need to invest in the customer service too. Because when they do need to make contact, you need to offer them mind-blowing service to earn and retain that loyalty.

Gren

Why have we not seen more tiered service offerings being introduced then, from express to standard to premium? Technology is a cost-saver – but you suggest that after the initial investment, you actually need to spend more on your people and training. Surely the question then becomes: through technology in the longer term - rather than cost-saving, you’re adding cost?

Hayden

Yes – and you may be. But it’s required for a lot of things. For example, eighty percent of the time if you book your movie tickets and your flights online it’s all fine, but in some cases things will change at the last minute, and that’s where you need personal service – and you expect it to be good. You need a level of human input because it’s still a few years before a computer can deliver those really complex transactions in assuredly human ways when you as a customer may be a bit stressed out.

Gren

So is the customer’s mindset currently where it needs to be - are they educated about what they can expect in terms of service? Or have customers just got lazy, knowing that so many businesses ‘love them’ and want them? Do they now have to re-set what they value, and what they’re prepared to pay and do?

Hayden

I think the starting point would have to be to really know and understand the customer. There are a few people talking about it, but if you really scratch the surface, it’s hard to find companies who actually do understand their customers at the level that’s required to understand the ‘service ecosystem’.

Gren

I think that’s a valid point - we do currently inhabit an ecosystem when we choose a company, a product or service, but there are lots of parts of the ecosystem that customers have been allowed to disregard. The classic Wal-Mart criticism is that they have patterned their customers to consider cost at the expense of understanding value. So, maybe self service is like this – it may be huge for some customers, but not for all of them. Maybe there’ll never be the ability to serve all of your customers in that way, all the time.

Hayden

A business needs to step back and see what exists currently, then through understanding customer goals and needs, seeing what parts actually make the best sense for the business (like where to differentiate or save money) but also at what will offer the customer things you couldn’t offer in the past or thorough traditional channels.

Gren

So we’re back to talking about degrees of service: standard, conventional, enhanced, etc.

Hayden

Yes. It’s that continuum – on one end purely transactional, and on the other end premium/complex.  And those customers at that end are prepared to pay more and obviously they expect more. But there will always be customers who fit on both ends.

Gren

Let’s go to other examples; say in an FMCG context, how do you validate the virtues of self service?

Hayden

Well at a basic level, you can serve more people, potentially in a way that suits them better, but only some of the time. If you have over 10 items in the supermarket, then self-serve starts to be a bad option. All I get to save is time, which is not bad, but...

Gren

Is time not a big enough lure in itself? In this case perhaps the challenge here is that it’s about the transaction rather than the product you are actually seeking. Even an airline in a way is a fairly transactional thing for most people – getting from A to B. Or with banking, you just want your money to go from one account to another account. But the self-service component is not fully replacing the whole service – you still need to take the flight, you still need a bank account. You still need the end product.

Hayden

Regardless of whether it’s self-service or not, you can still have systems in place to recognise your customers personally. In the old days you had the local mechanic who serviced all the customers in the local area, he knew them all personally, but he could only have so many customers. Now you can have more customers, but it’s more of a challenge to actually get to know them all personally.

Gren

As a customer, when I do get my car serviced, nowadays I expect you to have all the required information about me and my motor. To what extent does personalisation of information play a role then as opposed to the conventional idea of personalisation?

Hayden

As long as you have systems in place to manage the data you have, you can get that information and turn it back into something that will help to improve the service you provide. And all businesses should do that.

Gren

So all this information a business has about customers now, what does this lead the majority of customers to think? Will they look for fewer businesses that will do more for them - and consequently expect better, more personal service - or will they just start lapping up and loving the raft of choices, and maybe deciding that true control for them is about keeping a degree of distance and keeping a smaller footprint with many businesses?

Hayden

That’s the paradox. Because when it comes down to it, we’re creatures of habit. People are still onto their fourth or fifth Toyota because that’s what they’re used to – whether this model is better, whether that service experience was good or bad. We don’t make brand decisions that lightly, and it’s amazing how much goodwill some customers will extend.

Gren

As a business then, you probably just need to work on some sort of criteria for value or choice that makes sense in customer terms.

Hayden

It’s not that simple - probably it’s looking at what more you can do for customers that will bring the most return for both sides. The novelty of self-service can wear off. When you’re at the supermarket you may think at first, hey great, I can bypass the traditional checkout and do this myself, but then you realise that it’s actually pretty tedious and you may go back to the regular one anyway just because it’s not actually saving you any money, and maybe it’s too much effort. For many businesses, consumers are cynical about their motivations.

Gren

Therefore any business has to ask itself, “Are we introducing this because it’s good for us, or good for our customers too?”

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