Study: Self-Service Trumps ‘Live’ Service

Discussion
Nov 08, 2010

By Tom Ryan

A recent study by Harvard Business Review and Corporate
Executive Board concludes that companies are significantly over-emphasizing
the value of “live” or
personalized service. In fact, delivering top-notch self-service is the key
to building customer loyalty, it contends.

In the study, researchers found that
based on hundreds of interviews with “customer
service leaders,” companies on average believe consumers consider “live
service” more than twice as important as self-service.

At the same time,
the study wondered why people are increasingly heading to self-service kiosks
at airports when there’s no one in line at check-out counters as well as why
ATMs are often used when a teller is free. Testing the apparent contradiction,
an accompanying survey of 75,000 consumers explored their use of call centers
for help. The survey found customers viewed self-service choices such as web,
voice prompts, chat, and e-mail as basically equal to calls to call-center
reps. Of those that called the call centers, for instance, 57 percent had attempted
to resolve the issue through the company’s website first.

In their blog, two
of the researchers, Matthew Dixon, managing director of the Corporate Executive
Board’s Sales and Service Practice, and Lara Ponomareff, a research consultant
at Corporate Executive Board, said consumers are shifting to self-service options
partly because more self-service options are available and they tend to be
quicker. But when both are equally speedy options, they concluded that consumers
are more frequently preferring self-service options for three reasons:


  1. Self-service’s “unique element of control.”
  2. The public’s “infatuation with gadgetry and electronic communication.”
  3. Customers “don’t want a relationship with companies.”

The relationship part, the researchers acknowledge, is by far the most controversial
explanation. They wrote, “While this secular trend could be explained
away as just a change in consumers’ channel preferences, skeptics might argue
that customers never wanted the kind of relationship that companies have always
hoped for, and that self service now allows customers the ‘out’ they’ve been
looking for all along.”

As such, companies may be over-valuing “dazzling” customer
service over resolving simpler self-service solutions. This is particularly
true as consumers are proving to be much more likely to punish companies for
a bad shopping experience rather than reward them for an extraordinary shopping
experience.

The study concluded, “First, delighting customers doesn’t
build loyalty; reducing their effort — the work they must do to get their
problem solved — does.
Second, acting deliberately on this insight can help improve customer service,
reduce customer service costs, and decrease customer churn.”

Discussion Questions: Are retailers underestimating consumers’ desires
for more self-service options? Do you agree that large numbers of consumers “don’t
want a relationship” with companies?

Please practice The RetailWire Golden Rule when submitting your comments.

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21 Comments on "Study: Self-Service Trumps ‘Live’ Service"


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Bob Phibbs
Guest
8 years 6 months ago

The conclusions drawn seem incredible but I for one don’t buy it as truth. Sounds like a study to boost CES attendance.

Dick Seesel
Guest
8 years 6 months ago

This phenomenon depends largely on the type of retailer being discussed, and the definition of “good customer service” for that segment of the business. A store like Nordstrom has built a successful model on availability of knowledgeable salespeople, and other luxury or near-luxury retailers would be advised to pay attention. But a mass retailer like Target is not dependent on “high touch” customer service; rather, the most important things it can do to satisfy its shoppers are to ensure that goods are on the shelf and the checkout process is efficient.

As more consumers migrate to “mission shopping” (walking into a store looking for a specific item), the self-service model becomes more important. Consumers are also becoming accustomed to more control through online and mobile shopping. But there is still a place for good CRM, even in the most hands-off models of “customer service.”

Max Goldberg
Guest
8 years 6 months ago

Let’s not equate live service with good customer service. Many times self-service is faster and more efficient. It takes quality customer service to build loyalty and repeat business.

Doug Stephens
Guest
Doug Stephens
8 years 6 months ago

The problem is that much of the live service we get isn’t very good. It doesn’t add any value. In some cases, it’s flat out worse.

As technology improves and becomes increasingly easy to use, consumers will become more demanding of live service interactions. They will have to be outstanding in order to make any sense.

If you can’t give me a human who provides a remarkable experience, let me do it myself.

Dr. Stephen Needel
Guest
8 years 6 months ago

Everyone is underestimating how bad most customer service is. I don’t think it’s that consumers want more self-service options, it’s that self-service options are often more pleasant and equally productive as an in-person experience. Anyone who has talked with “John” or “Mary” in India, who are reading from a help script that you can find online, can point to the need for better service. We’ve trained consumers to expect bad customer service and we shouldn’t be surprised when they prefer the path of least resistance. And kudos to those companies who have figured this out and provide great service.

Mel Kleiman
Guest
8 years 6 months ago

This is my opinion, just from my own personal experience. The reasons I try to resolve my problem without dealing with real live customer customer service.

1. To get to a real live person you need to go through 10 different prompts and hurdles and listen to ten different options.

2. Once you get to the person most companies have not empowered the person to solve anything but the standard problem with standard remedy.

3. The quality of the person you end up talking to is no better than the automated system, so why waste your time?

Those companies that truly believe in great customer service will win the war one customer at a time.

The customer is not always right but the customer is always the customer and they do determine whether you stay in business or not. They may not have an option today but at the speed at which business is changing, who knows what options they will have next year.

David Biernbaum
Guest
8 years 6 months ago

The study by Harvard Business Review concluding that companies are significantly over-emphasizing the value of “live” or personalized service is exactly right in that what consumers actually desire right now are self-service options. Many consumers will not even shop a retail store anymore that doesn’t offer self service checkouts. The irony of self-service is that many times it’s actually more customer friendly and a lot more efficient and more respectful of a consumer’s time than “live” people.

Al McClain
Guest
Al McClain
8 years 6 months ago

My thinking is that consumers want good self service options for anything that they view as a commodity transaction. In other words, if even great customer service adds little value to the experience, then consumers would rather handle it themselves.

So, consumers may prefer self service check out at the supermarket or Home Depot when they are in a hurry or stressed, but sure want “live” service when they are looking for advice on a home improvement project or where to find that gourmet item for the holidays. They’d rather pump their own gas but not fix their own car; use self serve kiosks at the post office to mail a package but need help mailing an odd-sized package.

I still believe that luxury retailers catering to upper income shoppers need to provide great, personalized service, and would be going down a dead end path to tilt towards self service.

Ian Percy
Guest
8 years 6 months ago

Anyone else find this whole thing rather sad? Or is it just Monday?

I flash back to graduate psychology days and reading about the research where baby monkeys were given a chicken wire ‘mother’ wrapped in terry cloth instead of the real thing. I’m still haunted by the image of that tiny frightened baby monkey face clinging to that self-service mommy because it was all it could find.

The devastating reality is we don’t know how to make human relationships work. It’s just easier to create mechanistic ones. And so we cling to whatever gives us even the most meager response. The ATM, the check-in kiosk, email, Facebook, a video game.

When we go out of our way to take love out of the equation, we’re doomed.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
8 years 6 months ago

Amazon offers a more “personalized” experience than any “live” store employee I interact with. Live agents via call center (chat or phone) don’t seem much better than the store associates when it comes to offering anything remotely approaching a personalized experience.

In general, with a few notable exceptions, retailers view labor primarily as an expense and continue to push to expand customer self service to limit this expense. Technology is helping consumers and retailers fill the resulting gaps and ironically it is resulting in more personalized experiences.

Bill Emerson
Guest
Bill Emerson
8 years 6 months ago

There’s a certain circular logic here. I let my human service levels get worse and/or more complex than bare-bones information on the web, poll customers say that they prefer online help (since the live help is so bad), and then conclude that human service is unimportant. How tidy.

As always, it’s about implied expectations in the operating model. If low prices on commodities are the core of the value equation, the customer doesn’t expect great personalized service. If you’re offering new/complex technology or fashion apparel, the customer expects knowledgeable help in making an informed decision and, when they don’t get it, they go elsewhere. Even a good web site will not win back a customer who has had a bad experience on a sales floor.

Just as–if not more–importantly, having exceptional human service can provide a strong and positive differentator. Ask the folks at Zappos.

Gene Hoffman
Guest
Gene Hoffman
8 years 6 months ago

It is sometimes hard to relate to live customer service when the server doesn’t understand the customer and vice versa.

On the other hand, self-service can dehumanize the process. Is this why retailers offer both options–to some extent?

Steve Montgomery
Guest
8 years 6 months ago
I agree with Mr. Seesel–whether live service or self-service is better depends on the occasion. Like many of us, I travel a lot. At O’Hare airport, United has far more self-service kiosks to get my ticket than customer service representatives. It is faster and easier to get my ticket from the kiosks. However, should I have a problem then I definitely prefer live service than to try to determine the issue and resolve at the kiosks. My overall impression of United’s service has far more to do with what happens in the air than in the ticket issuing process. Similarly were I to go to Home Depot, I prefer to use a self-service checkout than wait in a line where all it takes is for the person in front of me to have one item that has no bar code to slow things down to a crawl. However, if I am looking for something, I definitely value the help of a knowledgeable clerk. Like many things, what makes good customer service is in the eye… Read more »
Rick Moss
Guest
8 years 6 months ago

I like Bill’s circular logic analogy, but managed strategically, it’s not necessarily bad. For example, sometimes in expanding the options on an online store, a retailer hits a point of over-complication, so for a time it’s easier for customers to call and get a walk-through from live help. Once the web development team catches up, the interface becomes more intuitive and self-help becomes the preferred option, so the cycle takes another half turn.

There’s a yin/yang to this self/live help thing, no?

Gene Detroyer
Guest
8 years 6 months ago
We are largely talking about transactions here. It is about purpose, not psychology. Don’t look at the migration from a staffed checkout (or bank teller or airline check in) to self-service. Measure the activity of the consumer, then ask the question: what does a real person add to the transaction? It most cases, the flesh and blood human adds nothing. In fact, the real customer service person adds activity to the transaction rather than makes it easier. I have observed several times at the local Home Depot checkers standing around doing nothing while 6 or 8 of the 12 self-service checkouts were being used. Why would those shoppers choose to use a human checker rather than the self-serve? Want to make a bank deposit or withdrawal? Go to the ATM and stick your card in or go to the teller, manually fill out a slip, swipe your ATM card, put in your pin and watch the teller count the money twice. Why would you go to a teller? When do you go to the teller?… Read more »
Dave Wendland
Guest
8 years 6 months ago

Whether self-service or “live” service, the common denominator is SERVICE. If a retailer delivers top-notch customer service and delights shoppers with the experience they will be viewed favorably. Although I agree that self-service has become much more prevalent, I do not personally believe that exemplary and meaningful “live” service will be replaced. Leading retailers will figure out the right balance and offer a combination of both which will lead to a fast, efficient and satisfying shopping experience.

Herb Sorensen
Guest
8 years 6 months ago

One hundred years ago, self-service displaced whatever personal service that had existed, and retailers lost selling skills, since self-service literally means, “customer, sell yourself.” Retailers became merchants who acquired merchandise, stocked their mini-warehouses, and collected money at the door. It is an overwhelming error and conceit to think that retailers have much understanding of shoppers and the SELLING PROCESS to them. Ditto for the commentariat.

This HBR study is a no-brainer, and selling is slowly returning to the sales floor, led by Amazonian skills learned online. When widely deployed through smart phones–or proprietary devices–those with true Amazonian skills will move to the fore as we see a true Convergence of Online, Mobile and Bricks-and-mortar (COMB) retailing.

Meanwhile, there is no reason to not obtain massive improvements in sales and profits by executing in current stores, without the technology, using Amazonian sales principles. See "The Amazonian Ghost."

Lee Peterson
Guest
8 years 6 months ago

That’s sort of a funny result as I would have to say that yeah, most customers don’t want good ‘live’ service because they simply can’t imagine it! What the study says is that customers don’t trust most retail brands with providing good service, which speaks volumes for the service they are being provided with, no? Customer: “hmmm, sure, I’ll take a machine over that guy any day.”

My guess is you would get VERY different results if you asked customers about the best service providers, like Nordstrom’s, J Crew or Apple.

The goal should be to study those emulators like Apple and find out why they’re so much better. Giving in to a machine, to me, is just plain lazy operations and H.R.–it’s giving up on the art of being able to hire and train good ‘live’ customer service. Don’t become the airlines, become Nordstrom’s.

Odonna Mathews
Guest
Odonna Mathews
8 years 6 months ago

Self-service options work best when they are set up in a consumer friendly manner, where consumers can easily figure out the choices offered and make quick decisions. Any self-service option also needs to provide a way for consumers to “opt out” and speak with a REAL person. This is true at checkout, online, or on the phone. If you don’t provide that, then the retailer really doesn’t understand service.

Doug Garnett
Guest
Doug Garnett
8 years 6 months ago

I don’t think that most consumers want to be friends with companies. I don’t. Even when I’m highly loyal to a product I don’t want closeness with that company.

Sadly, marketer’s don’t seem to “get” this. So, we are bombarding consumers with offers of clubs and so-called special relationships. In the end, I wonder if all this intense “love” of our consumers had decreased the value of brand.

Now, those are general comments. In specific exceptions, consumers want closer relationships. But we would all do well to sit back and remember that WE want consumers to friend us much more than THEY want to be our friends.

Scott Gurley
Guest
Scott Gurley
8 years 6 months ago

If the survey was limited to Call Center experiences, we can not assume that the responses hold true for other retail environments. Of course people will prefer a self-service option over the complex, barrier-laden process of actually reaching a live person at a call center. Especially when that person may not even speak their language or be able to resolve the issue.

Just because a frustrated caller doesn’t want to spend an hour on the phone with a customer service rep does not necessarily mean they don’t want a relationship with that company.

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