The Declining Need for and Escalating Value of Human Service
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Prophet Consulting blog.
Technology has been steadily reducing the number of human service interactions we require in an average day. For at least the last decade, the list of what we as consumers can do for ourselves is growing rapidly. Between kiosks, web based solutions and mobile apps, most routine customer service functions (product knowledge, price checks, inventory inquiries etc.) are now completely do-it-yourself.
With this "self-serve revolution" in place, it’s easy to regard human, person-to-person service as a somewhat archaic commodity for which the market value must be dropping. I’ve actually heard retail executives say as much, inferring that customer service people have become merely low value cogs in the machine. I completely disagree.
What technology has done is to automate the most routine and repetitive customer service tasks; the real mind numbing stuff that deserved to be mechanized. What it hasn’t done (at least not yet) is automate advanced problem solving skills, empathy and likability. Hence, customer service as we know it is evolving to become less about functional skills and more about cognitive reasoning and emotional intelligence — the really hard stuff!
Technology hasn’t lowered the value of personal service; it’s raised it. As the need for personal, human service declines, its value in circumstances where it is required becomes exponentially higher. It’s precisely because we can do so much ourselves that when we encounter something we can’t, it’s literally jarring. Consequently, the stakes are immediately higher. These are situations where the customer has already reviewed your frequently asked questions board, called your automated help line and read your user’s manual. The only remaining option is to call an expert who can help. The human being they call or visit at your business is the last and most vital stopping block between your customer and your competitor’s doorstep.
A great example of a company that gets this concept is Zappos. Seventy-five percent of Zappos’ sales are transacted without any interference from a human being –– all totally systematized. Most businesses would invest proportionately in the side of the business that generates the majority of sales –– the automated 75 percent. And yet, Zappos puts incredible emphasis on the hiring, training and compensation of the people who respond to the 25 percent of sales that do require personal service. The rationale is simple; the 25 percent of personal sales are regarded as do-or-die moments of truth when the system won’t cut it and when the customer needs the brand to truly perform. To skimp on talent at these most pivotal circumstances discredits the entire brand.
The best analogy I’ve heard is that the role of the customer service person today is much like that of an airline pilot. The pilot is not paid to fly the plane – that’s almost completely done by the autopilot system. Rather, the pilot is paid to be there in the critical moment when the system fails.
Discussion Questions
Discussion Questions: How do you see the role of customer service evolving with the increase of technology-enabled self-service options? Where is human interaction in the shopping experience still needed now as well as likely in the future?
I like that Doug is talking about the need for humanity in retail. Yet it comes from the place that the customer has indeed all the answers. Just because Vivian has researched a Blu-ray player online and read all the reviews, when she comes into your store and can’t find that — the critical skill isn’t how to get it from another store — but how to upsell and move something in the store.
The conceit of cold technology is that everything is an if/then decision which it isn’t. That’s why humans should be involved all the way, from mind-numbing “where is this” to “how can I connect everything in my house?”
And can we stop glorifying and comparing Zappos? They are a call center with a culture built in an office. Surprise and delight by shipping express or staying on a phone for 30 minutes is only marginally comparable to what bricks and mortar retailers do day and night.
I agree that technology can remove the need for a customer service person to handle the mundane tasks customers can do for themselves. Frankly, I like the self service options rather than looking for a sales associate. However, that means that the customer service person has to be better trained to handle those things that do require the human touch. Unfortunately, many are still trained on task completion rather than people skills.
One thing to keep in mind is that in our youth oriented culture many companies assume that everyone has a smart phone, knows how to use a kiosk, etc. There is a significant portion of the population where that may not be true. These “older” customers still have purchasing power and grew up in an environment where the store staff provided a level of assistance that many do not today. Customer service people should be made aware of this in their training.
The need for human interaction will always be a core component to retailing. Not everyone can absorb technology as quickly as we’d like to. A few years back when self-serve scanner registers became popular, I wrote a short article about how retailers are essentially giving up their last line for sales. A well trained cashier can increase sales per transaction by simply up selling smaller impulse items at the register. You don’t get the love with a self serve machine. While technology definitely enhances the shopping experience, I also believe that it is a huge distraction as well. There are fewer opportunities to lose a sale and make mistakes when a human is control.
Doug’s article hits the nail on the head! The soon to be archaic retailers will adopt the view that staff are no more, and probably less, important than before. The truth is exactly as Doug states in his article.
Look, if traffic counts are down, and customers are more knowledgeable and demanding than ever before, doesn’t it just make sense that front-line staff and managers need to up their game considerably? Anyone that trumpets that “IT drives retail” is probably making their money selling software or hardware. It’s important for sure, but let’s never forget that retail is, and has always been, a people business.
The role of customer service in the long run to me will be in how value added is incorporated by the company. Someone like Dell or Best Buy, where you can do everything online to buy a computer or peripheral is great, but the customer service aspect to want to always buy a computer from them would be in the after sale service. If I have a problem will they respond, if I need someone at my home for my small business, will I need to wait three days? Can I get a part overnighted? Geek Squad is great, but if I was a premium member could I get someone to my home within 4 hours any day the store is open?
All aspects of customer service that could be income added for the companies, could be perceived as a reason for loyalty by the customer and becomes value added after the actual automated sale.
I will keep saying this till I get out of this business. Customer service matters, but with the economy as bad as it is, it is the first thing to go with many companies. All of us in business are being squeezed by increased competition, and expenses rising way faster than sales. Unfortunately, the consumers wants rock bottom pricing, and for the most part expects first class service, which creates the huge problem of balancing price vs. service.
Training your help to be really good at service is critical, and at the same time we expect them to multi-task more than ever before. I am committed to keeping a good level of service, hoping to keep the folks coming back, BUT it is getting really tough to do every week, as the flow of business drops after the first of the month. Lip service means nothing to me, and my help understands the importance of great service, because in the end, the customer pays all of our checks. Squeezing out a decent profit is the Houdini trick today, and every business I talk to is in the same boat. Fun time to be in the game, isn’t it???
I agree with Doug and the article as it is outlined here. My concern is what do we do with the labor force that technology forces to obsolescence? We still need to be fed, clothed and housed. We have to have a way to afford that. With more of the customer service functions being automated, and we become a self help world; there will need to be an upgrade in training to function in this new world. And let’s not forget, it is the older generation that retains a majority of the purchasing power. That generation does not possess the technology skills of many of the younger generation.
Technology has given us the ability to do more things for ourselves; to deal with today’s realities in all of their accelerated advancements as well as the resulting human voids. That’s how today’s pattern has been emerging. So more self-service will be generated in the future at lower cost than personal service.
I am happy that I can do more and more things for myself than before, but I miss the interplay with other human beings that once was an enchantment in my daily life. Self service, for me, is not sufficient involvement without human beings. Thus, through my window, as dusty as it may be, I can foresee a happier shopping experience when the magic of human service came back into balance with King Technology.
The consumer is going to seek “help,” when they need “help.” That support will be sought in varying degrees depending upon the category, channel, or customer base that might be entering the store.
I’m reminded of an instance a number of years ago that occurred in a McDonald’s on Chicago’s Michigan Avenue. An older woman, dressed in a fur entered the restaurant and sat down, waiting for service. She had never been in a McDonald’s. Eventually, a store manager approached her, and asked if he could help. The woman explained that she was waiting for service. The manager efficiently helped her, and took care of the customer’s needs.
As Doug Stephens points out, technology is not going to solve all issues. Retailers have position their operations team to “see the floor from the customers perspective”. Great customer service is an element that has to be provided one customer at a time.
Easy? No. Important? It’s essential.
I’m not sure there’s anything more ‘mind numbing’ than grocery checkout and yet according to an article in the Washington Post today, “Market studies cited by the Arlington, Va.-based Food Marketing Institute found only 16 percent of supermarket transactions in 2010 were done at self-checkout lanes in stores that provided the option. That’s down from a high of 22 percent three years ago.” Supermarkets around the country are phasing out self-serve checkout, once touted as the wave of the future, in favor of old school checkout.
I’m not against technology in retail; my company manufactures a technology solution for retail. What I am against is technology that confuses the customer and makes them work, or mimics an internet experience. Brick and mortar retail technology should simply enhance the customers’ ability to connect with the sales associate when they want something. That means anything from providing a service button to call an associate when service is needed to arming the associates with an iPad to be able to find the information and/or the product the customer wants.
People that make the trip to a brick and mortar retail do so to interact with brands face to face. If they’re greeted with a technology experience that makes them work, or provides the same experience they would have gotten online at home, why should they bother to make the trip? The answer is; they won’t.
The role of customer service, as illustrated by Doug’s excellent piece and the Zappos example, is selling. Customers derive value from customer service, whether it’s of the automated, self-service kind or the traditional human, high-touch variety. Smart companies recognize this and short-sighted ones, as evidenced by Tony’s comment, find this a great source of expense reduction.
They key is to bring enough customer insight and focus that customer service is tailored to the right customer opportunities. This means companies need to focus not just the right customers (that’s fundamental) but the situations where customer relationships and sales from those relationships are at risk or viable for growth.
The problem with customer service is that it’s not evolving, it’s devolving. Instead of plowing the savings provided by technology back into the customer service function to further enhance the experience, most service providers are trying to reduce their customer service expense further. Try calling customer service; if a question is asked about a product, they’ll likely pull up the web page you are already looking at and read it to you!
Tune the interaction to the type of person, the type of store, type of merchandise being sold, and at the appropriate time in the shopping/buying cycle to achieve the store goals. While some leading retailers may offer on a limited basis the ability to do price checks, inventory lookup, and product locator assistance in the store, the vast majority don’t. There are plenty of opportunities to utilize technology in the store and to free up the staff to offer the services of added-value that make shopping more pleasurable and more profitable for the retailer.
As both Albertsons and Big Y have decided, consumer interaction is important. There are many segments where technology may not be the answer. We have the digital divide that separates consumers into those with web and/or mobile capabilities and those without. We have price points where a $20,000 designer dress is unlikely to be bought online. We have the age element where older consumers grew up with customer service and don’t want to change for everything. We buy most airplane tickets online today, but making travel reservations now takes longer than calling your friendly travel agent. Somewhere down the line, there could be a backfiring on consumer to technology communication. Back to nature could upset this cart.
This is a very insightful article with which I completely agree. However, the real ideal is to NOT need the airline pilot, which is the direction in which we are moving, at least at retail. I’ve transacted a great deal of business with Amazon over many years and have NEVER had a personal interaction related to buying from the site.
The real improvements in customer service, in the SELF-SERVICE world, is better recognition of what the customer wants, or may buy, based on signals the customer is emanating. Such as, where IS the customer, what are they looking at, and how have they and others behaved in this same situation in the past?
The reason that Amazon is the premier SELLING organization in the world is that they are more advanced in having algorithms that recognize the shopper, and respond in this intelligible way. However, if you use Google mail, you may notice how their algorithms attempt to intelligently assist you by, for example, suggesting people who you might like to copy on THIS email, based on who you have copied in similar situations in the past. And they try to organize your email for you in related threads, etc.
I don’t find Google that good with their email assistance, but they are clearly on the right track. Studying detailed past human behavior, and using that to predict/assist human behavior in the future is the essential element of learning and habituation. 80% of routine shopping is habituated, and most marketers are rather brain dead in trying to relate to it as a decision process, cognitive in nature, rather than the reality of a habitual process, instinctive in nature.
Self-service retailers, as merchant warehousemen, may have the poorest understanding of shoppers of anyone aspiring to be “shopper marketers.” Their brand suppliers are not far advanced in this, primarily because of their obsession with their own brands and categories. This is why I speak of the “Amazonification” of “Walmart.” Simply because, conceptually, these two organizations represent the epitome of SELLING (Amazon) and LOGISTICS (Walmart), the twin giants of retail. This expertise is coming from the technology/business world, not from traditional retailers.
But here I have mentioned Google, because Google is in reality the premier cataloger of human behavior (and knowledge.) And their expertise will increasingly be relevant inside the world of shopping. They are VERY farsighted in incorporating PLACE and location as a crucial part of the knowledge of behavior. Google Store View could massively improve the shopping experience by marrying the intellectual capital of Amazon, Google and Walmart. How that could happen commercially is not at all clear.
Do note that paying customers to buy, the current state of mindless retailing, WILL become a the losing retailer’s last refuge. Discounting, couponing, etc., the FIRST instinct of the merchant warehouseman (aka self-service retailer) will become a minor spice, rather than the entree.
Great thought starter. This is yet another area where retailing is getting more complicated. The right mix of staff versus technology is evolving, and the role of staffing does have the potential to become higher “value add.” But that creates challenges, sector by sector: what exactly should my staff do? How many do I need? Do I need to source them differently? Should different stores actually have a different answer, depending on the characteristics of shoppers at that store? This is another area where early and aggressive testing will help some retailers get it right.
There has to be an integration of technological solutions that enhance the customer experience. It says a lot that employees are there to remedy the errors and confusion caused by technologies, instead of working with customers to meet expectations.
As Frank Dell reported, Big Y and Albertsons are going back to customer interaction and ditching self-serve checkout — too many problems with pricing, coupons, etc., creating more frustration. The investment for these SS kiosks has to be absorbed to stay competitive — something to think about in difficult economic times.
Big Y, a regional supermarket chain in New England, is phasing out self-serve POS stations to increase the “human touch.” While this is a tad extreme, Big Y does have the right idea that too much automation negatively impacts customer service/experience. I don’t foresee a future, short of some science fiction scenario, where people would not at least want the option of receiving human service. Human interaction (performed correctly) will always be a key competitive differentiator in retail.
The act of “commerce”, that is, the buying and selling of goods and services, need not require human interaction. People are completing a task: shopping. The key is to offer a shopper both the choice and control of their shopping experience. If they want or need human interaction, then make it available. If not, then make the automated process as painless as possible.
Simple; the less personal interaction you have with your customers the better the interaction needs to be when it happens.
I offer a different perspective, which is that of someone who worked as an associate at an upscale mall for 27 months from 2007 to 2009, the subject of my new book about retail, “Malled.”
Retailers who undervalue their associates, and many do, are making a grave mistake. By the time a shopper has made the choice to enter your store, they have already chosen to invest the resources of their time, money, energy, costly gas or public transportation, parking, perhaps a meal and maybe even paid a babysitter. They want service!
Unless they have chosen a Walmart or other retailer at that level, (i.e. they’ve traded service for lower prices), their expectations are in fact higher because of this investment and because — except for the wealthy — many are wary, if not highly anxious, about spending money in this terrible economy. I saw it firsthand.
As a retailer at the recent RCE conference (where Bob Phibbs, Doug and I were speakers) told the group, shoppers are even more demanding (and angry with poor service) than ever before. Disappointing them in a recession with lousy or non-existent associates who are poorly trained and have crummy people skills seems imprudent to me.