A recent online HBR essay by Matt Dixon and Lara Ponomareff is a worrisome read for any marketing executive who’s focused on helping their company develop deeper, more meaningful relationships with customers. It exposes the challenges facing organizations that want to gain more insight from their clients in order to better serve their needs.
Have you ever walked into an airport, seen that there is nobody in line at the check-in counter, but still made a bee-line for the self-service kiosk? Better yet, have you ever waited in line for an ATM machine even though there is nobody in line for the teller inside the bank?
If you answered “yes” to either of these questions, you’re not alone. Most customers these days demonstrate a huge — and increasing — appetite for self-service, yet most companies run their operations as if customers prefer to interact with them live.
In our research on this topic, we’ve found that corporate leaders dramatically overestimate the extent to which their customers actually want to talk to them. In fact, on average, companies tend to think their customers value live service more than twice as much as they value self service. But our data show that customers today are statistically indifferent about this — they value self-service just as much as using the phone. And guess what? By and large, this indifference holds regardless of their age, demographic, issue type, or urgency.
This attitude toward self-service has been a long time coming. Two-thirds of the customers we surveyed told us that three to five years ago, they primarily used the phone for service interactions. Today, less than a third do, and the number is shrinking fast.
What is it that makes self service so appealing? Maybe it’s the efficiency of the interaction — the airport kiosk is probably faster than interacting with a check-in agent — but that wouldn’t explain why we go out of our way to take care of our service needs ourselves. On a psychological level, it might have more to do with the unique element of control that self service affords. Or, maybe this self-service love affair is a product of our infatuation with gadgetry and electronic communication. All fairly benign explanations, to be sure.
But here’s a hypothesis that would be concerning if it’s right: maybe customers are shifting toward self service because they don’t want a relationship with companies. 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. For managers hell-bent on deepening relationships with their customers, that’s a sobering thought.
Consider this: Running your company as if customers want to talk to you isn’t just expensive, it’s potentially undermining your efforts to build longer-term loyalty. Our research shows that customers who attempt to self serve, fail, and are forced to pick up the phone are 10% more likely to be disloyal than those customers who were able to fully resolve their issues in their channel of choice. As one CFO remarked to us recently, “When you think about the relative cost of live service and the disloyalty effect of channel switching…it’s like paying your customers to be disloyal to you.”
How often does channel switching happen? All the time.
We found that a staggering 57% of inbound calls come from customers who first attempted to resolve their issue on the company’s website. And over 30% of callers are on the company’s website at the same time that they are talking to a rep on the phone. That’s a lot of frustrated customers.
For information on how M Squared consultants can fine-tune your customer strategies, please call 1-888-818-2505 or visit www.msquared.com