Technology and Consumers – Reality vs. Promise
Editorial by Al McClain
Here’s the deal…
Transactions that were once full service are now self-service: banking, airline check in, retail check out, customer service on the phone, etc. But are consumers looking for
tech solutions? I believe they want things that make their lives easier and couldn’t care less how the technology works, just that it does work.
On the promise side of the ledger are cool offerings such as these we saw at the NRF convention earlier in the year:
NCR – offers all kinds of kiosks that are smaller and faster, and enable consumers to check in, check out, pay bills, and serve themselves. When you think of the “old model”
of checking into a hotel which inevitably involved a wait in line, it seems inevitable that consumers will gravitate more and more to self service, and be able to customize their
rewards more easily this way, among other benefits. (www.ncr.com)
Mobilelime – is a free service that allows consumers to charge purchases via their cell phones, and get rewards as well. It enables retailers to sign shoppers up to interactive,
cardless loyalty marketing programs. There is no doubt consumer technology is going mobile – the trick is to deal with consumers in what they perceive is a helpful way.
(www.mobilelime.com)
Newgistics – provides intelligent management returns solutions. The process expedites returns for consumers by providing a “SmartLabel®” that includes a template for the
return, along with prepaid postage. This process also enables retailers to better plan for returns and improve fulfillment. Anyone who’s ever had to return an item knows
the process can be frustrating – and consumers remember retailers that give them a hassle returning items. (www.newgistics.com)
On the reality side of the ledger, here are three incidents that highlight what the average consumer goes through on a regular basis.
- Magazine subscription: Business magazine is ordered, and paid for, but never arrives. No customer service phone number on invoice; just website listing. E-mail sent to customer
service generates reply two weeks later saying to call an 800 number. Call to 800 number requires entering account number, which is non-existent because subscription never started.
Company finally fills subscription after telling consumer there is no “proof” that they paid (cancelled checks evidently don’t count). Subscription finally arrives – meanwhile
new offer arrives to same address for half the price of what’s already been paid. - City parking eliminates “old fashioned” parking meters in favor of centralized kiosks. With the old way, you paid the meter and left. With the new way, you walk across the
lot, stand in line for one of two kiosks that actually works, make note of your space, deposit money, and keep your receipt in case there is a screw up and you get a ticket.
Oh, and remember the kiosk takes nickels and quarters, but not dimes. And, there is no cover while you wait in the snow or rain. And, the process is so complicated that several
people gave up and took their chance on a ticket.
Example #3 involves making hotel reservations and getting tangled up in a maze of a special hotel offer, several customer service numbers, and a convention travel agency, but
you get the idea. Bottom line is a two-night stay in Chicago for a convention at two different hotels, because various systems don’t talk to one another.
So, promise often meets a less than ideal reality. So many things are possible technologically these days, but often the end result isn’t satisfying to the consumer, because
people and systems at the top of the process don’t talk to one another. The magazine company doesn’t ensure its subscription department has phone numbers, websites, mailings,
and customer service reps that form an integrated system. The parking kiosk company and the local government don’t think the whole process through in terms of what it means to
the consumer. The hotel operator doesn’t manage its various offerings and systems to drive customer satisfaction.
Moderator’s comment: Technology can do so many great things, and improving communications is one of them. How do we in the retailing industry do a better
job of integrating our myriad of systems and offerings so that they don’t operate as individual products, but actually improve the end result for the consumer? –
Al McClain – Moderator
I’ve read a lot of salient points today, and waited to comment to have that insight. My contribution is around the objectives, culture and mindset of the organization implementing the technology. As has been pointed out in the comment on competing variable management, a single variable manager makes easy (and often wrong) decisions. In this case, a cost reduction oriented set of objectives will generate observable (albeit often short term) cost reductions. Another case in which the objective is to reduce customer waiting time will undoubtedly do just that.
Retailers must be aware of what their objectives are, and test if those objectives, when removed from the vacuum in which they were created, support and enhance the overall business strategy. The only objective I like to focus clients on is “does it drive, sustain or enhance your competitive advantage”. If being the most efficient operator is very high on that scale and providing strong customer service is not, then implement technology accordingly.
Having said all that, there are very few cases where I would place some interpretation of customer service out of the top 5 core competencies supporting a business strategy.
Technology boom or bust? There is a fine line between adding value using technology and creating customer frustration. In Al’s editorial there are examples of frustrations that are felt by the customer. My personal pet peeve is calling for customer service and spending 10 minutes going through voice prompts in order to speak to a live person. Those create, for me, a frustration level to such a degree that if I didn’t absolutely need that service, I would NEVER do business with that company again.
Reality vs. promise? How do we do a better job? We need to test technology AND THEN LISTEN TO THE CUSTOMERS! Just because everyone is doing something or everyone is using a technology, doesn’t mean it is best for a business. Unfortunately, in our Wall Street driven world, sometimes the monetary savings that occur outweigh the negatives that occur when using the new technology.
The positive example that comes to mind is the self-service check-in programs that the airlines have implemented in the last few years, with both the kiosks at the airport and the ability to print out boarding passes at home. Programs such as Hertz Gold fall into the same category. What a convenience!
On the negative side, I have recently seen these types of kiosks in hotels as well. My first thought was “it’s about time!” However, I have never been able to complete the check-in transaction on one of these machines and end up getting at the end of what has become a longer line. Then I proceed to watch other hotel guests go through the same process. I’m sure the hotels will fix the kinks in the system soon and that this will soon be standard operating procedure.
For better or worse, consumers are being trained through multiple good and not-so-good experiences to serve themselves. Human service costs more and is less “controlled” than machine interfaces. Many firms are seduced by the promise of cost savings without understanding the impact that an automated experience may have on a customer relationship.
This leads to the creation of IVR hell and Kiosk kraziness – two new kinds of service failure that never existed in the days when a human being was the only service option. Now, when the service interaction fails, the customer knows with absolute certainty that the firm is at fault, not just the individual being dealt with.
Worse yet, only problem interactions are escalated to human service personnel. That means your people deal mainly with unhappy customers, which has a disheartening effect on employees, leading to lower employee satisfaction, leading to poorer customer experience, leading to…well, you get the picture.
On the other hand, some perfected self-service systems work rather well: airline check-in kiosks, bank ATMs, the sandwich ordering systems at WaWa convenience stores, for example. Cell-phone payment systems like MobileLime and the just-announced PayPal service hold promise as an alternative for motivated customers. Firms who offer these options to customers should make the effort to carefully study their impact on the customer experience and demand intuitive, dependable technology that puts the customer interest front and center.
I agree 100% with Bernie Slome that it’s important to test the technology to make sure it’s doing what you expect. What happens too often is that executives buy into the technology and then leave it alone assuming it is doing its job.
My suggestion is to stress test your own systems and see if you are satisfied with the experience. Call your own company’s customer service and complain about a product you purchased (if you can get to a real person!). Use your own online shopping service or try to create a shopping list for your family using your online ad. It can be an eye-opening experience. Suddenly, the feature that you thought was so great turns into an irritation because it either doesn’t work right or only gets in the way of what you’re trying to do.
By using the technology as a customer, you will understand first hand the flaws in the system and the frustration that it causes for customers. More importantly, you can identify what changes are needed to make it more customer-friendly because you’ll know yourself where the problems are.
The key is to keep the focus on your customers and make sure that the systems effectively serve their needs. The best technology in the world is useless if customers can’t or won’t use it.
Hi-Tech or not, my team’s mantra is that we must be easier to work with than our competition, or we’ll lose our customers to the competition. If the technology actually makes the experience simpler and more delightful for the customer, great! But if it doesn’t – even if it saves money – don’t do it!
A related issue is customer service. When something doesn’t work the way it’s supposed to, have true customer service. Give the customer service rep the authority to solve the problem immediately on the first call. Unfortunately, most companies fail miserably at this.
Executives who care primarily about managing costs will continue to use technology to do that. It’s easy to be a “single variable manager.” To be a REAL manager, you need to manage “competing variables” such as how to increase quality while simultaneously reducing costs. Customers get justice (better quality with less cost) eventually if true competition occurs, since the firms who deliver poor quality eventually get beaten. The airlines with decent self-check-in will have greater customer appreciation (loyalty) than the airlines that don’t. The auto manufacturer who delivers outstanding quality along with a great price will beat the brands who deliver one without the other.
As a side observation: often we write about “consumers” as if the word is a synonym for “customers.” But there’s a difference. A mom who shops in Kroger for her family is a customer and a consumer. Her children are the consumers of what she buys in Kroger. The article about technology uses the word “consumer” several times, but it’s mostly about the “customer.”
Poor customer service was with us before the high tech implementations mentioned in the article – just think State DMV operations, the long waits, and the attitude.
In most cases, technology almost forces improved options for the consumer, so I love my ATM option – and can get to a teller quicker when I need one. On line reservations (allowing price and schedule information from all airlines/hotels at my fingertips) is great – and for complicated matters the live operator is still available (estimated wait time now six minutes – but I’ve got the phone on speaker while I prepare a snack). And give me “Easy-Pass” toll collection every time.
My point – management – not the technology – deserves the blame for poor service and the praise for great service, and this was the case when cash registers replaced brown paper bag additions and will be the case when body implanted chips allow us to be billed for everything as we move through life unencumbered by credit cards, cash, or identification cards.
When I managed grocery stores, the most exciting new technology was a machine that actually extracted juice from oranges while you waited. We spent more time and money cleaning up the mess around the machine, than the revenue we created selling the juice.
Last night, I went to the same grocery retailer, bought a gallon of milk and a dispenser at the shelf spit out a coupon (that I used), got a few other items; I utilized the self checkout, no cash or credit…I used my thumb (print) in a scanner to pay for the items. Upon completion I got coupons that were specific to my buying history. In and out in 5 minutes.
We’ve come a long way. Talking to a grocery retail manager recently, he alluded to the fact that he felt it was no longer acceptable for store managers to be only great merchandiser/managers, but also a need (with all this new technology at the store level – much that needs daily monitoring, servicing, maintenance, etc.) to be technologically advanced.
Technology must be customer centric to pay out. I have no problem using a kiosk or a web site as long as it works.
I agree that every single executive should “road test” every “feature” the IT team claims will be “revolutionary.” Try to set up a registry, try buying something online and change your mind about one item before you hit the final payment key. How many times does that make you restart from square one?
Technology has to work intuitively for real people, not just for techno-geeks (like me). If my wife can’t make it work without problems she will quit shopping there (self checkouts, EFT check redemption she is “uncomfortable” about, incomplete descriptions of products with too little detail online, privacy issues and security of personal data, etc.).
If your efficiency makes my life easier then you got it right, if it doesn’t, you alienated me as a customer. It’s really all about the golden rule – treat me the way you’d want to be treated.