This year marks the 50th birthday of the ATM, the device that forever altered the dynamic between customers and service providers--and paved the way for customers to expect immediate gratification at any time, day or night. Removing a human face from one side of the transaction changed not only banking but also expectations about the customer's role in creating, owning, and managing his or her experience in all kinds of situations.
The irony: Companies' ability to cater to customers' very human desires to have personalized, up-to-the-minute, anytime experiences depends largely on machine learning, algorithms, and technology, the customers themselves, and outside partners.
Here are three questions companies need to ask as they seek the optimal balance between meeting customers' needs and their own:
1. Does more work for the customer make sense?
Businesses of all kinds are asking customers to do jobs that employees once performed, whether it's using self-service checkout at the supermarket, skipping the box office to print movie tickets from home, or scheduling everything from salon visits to doctor's appointment via an app. It's not just B2C customers asking more of (or giving more power to) their customers: Logistics companies increasingly encourage corporate clients to enter and track their own shipments.
When designed well, putting customers to work can save labor costs, reduce human error, and even save the customer time and money. But when self-service is simply fobbing work onto customers, it imposes a burden on customers that amounts to a hidden price increase--and imposes costs on sellers, too. The retail industry owns up to a 20 percent increase in shoplifting from self-service checkout; an academic study found six times more. Apparently, irksome technology makes stealing seem easier to do and to justify.
More to the point, reducing face-time with customers can cut the connection between the two of you and reduce your ability to differentiate your offering. Supermarket chain Albertsons is ditching self-checkout at 96 of its Southern California stores--but keeping it at places with high foot traffic, such as near college campuses. Mobile Mini, America's biggest provider of mobile storage units, backed away from a centralized customer service center because customers wanted the human touch. At the same time Mobile Mini set up a self-service portal for big customers who wanted to manage hundreds of storage units at a time.
It's all a matter of design--with the customers' interest in mind.
2. How much speed do you need?
In some 5,000 U.S. cities and towns Amazon Prime offers same day delivery--and delivery in as little as two hours in some areas. Main Street retailers can match that with UberRush, which will send a driver to deliver packages to customers. In December, an Amazon drone delivered a bag of popcorn and a media player to a customer in Cambridgeshire, England--13 minutes after the order was placed.
These are the latest battles in the Wars of Instant Gratification. (The company recently did a test "with the assistance of the FAA"; commercializing the service could take years because of FAA regulations.)
Given the pressure to speed up, companies face a critical choice, but it's not the obvious one (get fast or get lost). The real choice is how to design the time customers spend with them.
Clock time is not the same as social time. Fast food or casual dining restaurants may win business and increase profits by eliminating clock time, but high-end eateries should maximize the value of customers' social time. Customers want their ATM to given them cash instantly, but they want their banker to take time to listen.
3. Are you joining hands along the value chain?
The recognition that the customer's journey involves multiple touchpoints--not all of them in a service provider's control--means greater reliance on third parties to deliver part of the customer experience or to enhance it.
For example, numerous retailers rely on a partnership with third-party delivery service ShopRunner for two-day delivery--and a shot at competing with Amazon Prime; Starbucks sticks cafes in Barnes & Noble; convention bureaus in places like Vegas and Orlando try to conduct a symphony of airlines, airport authorities, hotels, restaurants, and local transport providers. Waze shows loyal Dunkin' Donuts customers the fastest route to the nearest store and helps Lyft drivers navigate an unfamiliar part of town.
The app economy will only increase the number of these mashups, which, in theory, are good for everyone: They allow individual companies to focus on what they do best, while coordinating almost seamlessly with other specialists.
But handing a customer over to another company carries risks. Is this an alliance, or just reliance? A company shouldn't hand off a critical customer interaction without rock-solid, brand-appropriate performance guarantees. Today's ecosystem partner might be tomorrow's predator.
Service needs to be designed--and then delivered. Too many companies throw together a collection of service offerings that lacks coherence, style, and common sense. Digitally equipped customers have more options than ever. Savvy sellers respond not by diffusing their offerings but by curating them so that everything they do is designed to express their identity and enhance the customer's experience.