The shifting self-service paradigm

Feb. 26, 2013

By John Rossman

Self-service — the capability for a customer, vendor, or partner to be able to do what they want, when they want, in real time — is a competitive battlefield not only driving more sophisticated customer experiences, but giving companies the opportunity to reduce costs, eliminate errors, and decrease cycle times by forcing them to rethink everything about their processes and customer interaction. In addition to improving performance, self-service technologies are enabling savvy retailers to strengthen relationships with a growing number of do-it-yourselfer consumers who view self-service as the preferred method of service. Rather than viewing electronic service as cold and impersonal, consumers appreciate having more control over their service experience.

As evidence, recent surveys conducted by Nuance Communications and Corporate Board Executive revealed that two-thirds of consumers prefer self-service over speaking to a person for customer service inquiries, and 60 percent prefer to make a company's website the first stop when attempting to solve an issue.

In fact, consumers are not looking for service at all, at least not in the traditional form. They simply want to get something done or resolve an issue – track a package, change a flight or fix a problem – and they want to do so quickly and efficiently. As a result, the self-service paradigm is shifting to accommodate an evolving class of active consumers. Ecommerce capabilities that were once considered to be innovative – "where's my stuff," "return an item," "dispute a payment" – are now viewed as entry level applications.

Jeff Bezos wrote in his 2011 Letter to Shareholders: "I am emphasizing the self-service nature of these platforms because it is important for a reason I think is somewhat non-obvious. Even well-meaning gatekeepers slow innovation. When a platform is self-service, even the improbable ideas can get tried, because there's no expert gatekeeper ready to say, 'That will never work!' Guess what? Many of those improbable ideas do work."

Understanding the customer's end objective is vital, and it can be more difficult than many companies realize. But the payoff is substantial. Retailers that approach the self-service model with the customer in mind will be differentiated by the level of immediacy, empowerment, personalization and customization their self-service capabilities offer.

Five key concepts retailers should consider when developing a self-service architecture include:

Design everything from the customer's perspective. This means involving customers/partners/vendors in the design of self-service capabilities. Understand their requirements, true goals and get their ideas on how to improve.

Rethink policies and the need for manual intervention. For example, manage service matters by exception. This will allow the vast majority of customers to make real-time decisions and complete their objectives. With the right analytics and algorithms, an automated system can make the repeatable decisions in tandem with a separate exception process for the minority that requires intervention and review.

Create a balanced set of metrics for the self-service experience. The purpose is to measure the financial, operational, cost and quality facets of the customer's self-service experience. Break and cascade metrics into detailed sub-processes assigned to specific internal owners. Use routine meetings to review the metrics and encourage peers to challenge each other to improve performance that hurts any phase of the process.

Invest in user interface design to improve interactions. Insist on user experience excellence in all interactions, including vendors, partners and employees. The goal is to increase the number who use self-service, requiring far less support from your organization. Requiring this level of consistency develops the habits and culture of "design excellence."

Analyze data to create new customer insights. This means collecting as much data about customer self-service interaction as possible. Use this data to understand how the customer interacts with the system one way or another, and provide the feedback to both the customer and internal teams.

Amazon's third-party selling business, for example, offers a successful example of self-service implementation. The objective was to create an environment where a new seller was able to register, list and sell products in the middle of the night, with no one at Amazon knowing or assisting. The primary keys to success included building out capabilities such as test environments to help sellers practice on the system before they started selling to real customers; feedback and account management where a seller could manage his/her relationship with Amazon, such as key settings/notifications; and real-time data whereby sellers had access to customer feedback and other operational information to help them improve and make more money.

As a result of the process, went from not having any third-party sellers to hosting tens of thousands in more than 12 different categories over the course of 18 months. Today, this side of the business accounts for 40 percent of all units sold.

While retailers can use self-service to become more efficient and performance-oriented, the real power is in using it as a strategic mission to respond to shifting consumer behavior. True self-service proves that a retailer's thought process is structured to resolve customer pain points, which goes a long way with an audience that demands more autonomy in the consumer experience. The future of retail will not be dictated by the retailer — it will be driven by the consumer, which brings a whole new meaning to the "at your service" model.

John Rossman is a managing director with Alvarez & Marsal, an independent global professional services firm.

Read more about customer experience.

Topics: Customer Experience , Retail

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