Part 1: Redefining the Self Service Experience – The Utilitarian Customer

Self service interactions have been a hot topic on the corporate customer relationship agenda for the last few years. Serving a role as cost buster, self service was eventually embraced with gusto by corporate executives. The first generation of self service efforts focused on simplifying the web experience of customers. With the promise of shifting interactions from a costly call center to an affordable web platform, companies were willing to make the proper investment to build self service sites. First generation self service sites made several achievements in the pursuit of customer experience simplification:

1. Data source consolidation – Prior to self service, corporations designed their web presence with a "brochure" mind set. They posted their products and services on their web sites for customers to see and review. With self service, they started to make critical information available to enable customers to conduct transactions. Banks made account information available and other organisations provided access to inventory status and allowed direct ordering from their own mission critical systems. The access to information sources required consolidation of the multitude of data sources that existed internally in order to reduce the total transaction time required from a customer.

2. Usability and user interface – The shift from web presence to self service required better design of forms and transactions. Usability and reducing the hassle to conduct transactions were the primary concerns. Resolving these challenges resulted in efficiency and had customers spend less time on the site.

3. Availability of insightful information – Self service also stimulated a greater sharing of information. For example, airlines were willing to publicise their seating plans and allow customers to make their own choices. This information was originally unavailable through a call center or at an airport counter. Customers enjoyed a greater diversity of information which allowed them to customise and personalise their selection and ultimately shift their transactions to self service.

4. Around the clock service – The ability to conduct transactions 24/ 7 was an additional benefit for busy customers or traveling customers who conducted business at odd hours. The 24/ 7 availability created additional benefits that lured customers to self service.

5. Basic memorability – Another important dimension of the first generation self service was memorability. The sites allowed customers to build a profile of preferences once and then remembered the customer each time he returned. Such memorability saved time for customers and also reduced the time to transaction completion.

The benefits of the first generation of self service were significant and they did bring customers to shift their behavior from more expensive channels, such as retail stores and call centers, to web based transactions. The efforts allowed companies to optimise the processes and transactions and reduce wasted time. But the first generation self service created some major challenges as well; challenges that were by and large ignored.

First generation self service sites were designed for the utilitarian, time starved, price sensitive customers. These designs created a strong perception of commodity selling. Self service sites defined all customers as similar in needs and provided a homogeneous process to conduct business. The utilitarian customer was provided with a "one size fits all" efficient transaction. The customers were left to determine their own individual differences and find any element of uniqueness in the vast printed catalogues presented to them by vendors.

The utilitarian customer was treated by self service sites as someone who sought to conduct transactions as quickly as possible and then wanted to move on to other activities. If we applied this type of thinking to, let’s say retail stores, they would consist of automated kiosks to place orders and there would be no room for any other type of activity in the stores. But the utilitarian customer was merely a figment of the imagination of managers who sought to design a process and not the attitude of organisations who wanted to truly serve customers. They subjected the customer to an efficient process which drives traffic rather than loyalty. First generation self service sites were the results of well designed and efficient processes. There was no attempt to create experiences which would drive preference and loyalty.

As a result of the focus on the processes, self service sites have created the biggest challenge of all ─ commoditisation. The design of self service for the utilitarian customer accelerated the commoditisation of the products and services they offered. Self service sites have, at best, reached parity and differentiation.

On the web you are as big as your smallest competitor. Visually speaking, you are as big as the computer screen of your customer. This is exactly the same size as your competitors, no matter what their corporate assets, history of being in business, quality of products, etc. are. Self service sites made all vendors look the same. All products are perceived as equal in quality and benefits. Web sites stripped companies of their competitive differentiation. Self service sites are not a competitive differentiator. By now, they have merely evolved into a defensive move to eliminate competitive inferiority.

Reaching parity by creating efficient experiences drives customers to focus on price (albeit a lower price). In the absence of rich, emotionally engaging experiences, self service sites drive customers to define preferences primarily based on the lowest price.

The commoditisation factor is exacerbated by the ability to switch to the competition. The barriers to switch are so low, merely a mouse click away, that companies hardly get a chance to make their pitch. Customers are in full control as they shift from one site to the other at speeds never previously experienced. This commoditisation gave rise to the tough price competition the self service sites brought with them. In the one generation of the self service movement, with competitive parity being the best you can do, price rules. Companies struggle to promise, deliver and guarantee the lowest price for their products. This result only validates the fact that generation one of web self service did not create differentiation, but rather accelerated commoditisation.

The challenge for all self service-based organisations is to redefine themselves as competitive differentiators and move away from being a price driven interaction channel. Does your site generate passion? Although the term customer experience was heavily used (and often abused) in the context of self service, in that context it merely meant utilitarian design. The web experiences were primarily efficient and not emotionally engaging. Although the web is a channel full of personal discovery, emotions and interactions in social networks and peer to peer interactions, self service sites managed to produce the opposite experience. Despite the fact that the web is truly a place where customer uniqueness is accentuated and magnified, the possibility of one-to-one relationships with customers was not realised in self service sites.

Self service sites were not designed or actually develop in line with the full meaning of customer experience. Experiences are, by their nature, emotionally engaging. Customer experiences are interactions that drive emotional engagement and therefore loyalty and repeat business. Efficiency and speed of transaction completion are important, but only as a mean to an end. They are not emotionally engaging and hence do not command premium prices and build strong preferences. They are utilitarian and therefore priced accordingly. To make the transition from defense to offense, self service needs to redefine itself. The current approach of efficiency and cost reduction has a price. The price is perpetually reducing prices to please customers who see no other value in the commodity products.

Part 2: Redefining Self Service – The Tribal Customer

Lior Arussy is the President of Strativity Group and the author of several books. His latest book is Passionate & Profitable: Why Customers Strategies Fail and 10 Steps to Do Them Right! (John Wiley & Sons, 2005). Read an excerpt of this book.

To learn more about customer strategies, sign up for Lior’s newsletter at www.StrativityGroup.com.

Related articles by Lior Arussy

• Part 2: Redefining the Self Service Experience – The Tribal Customer
  
• How Captive Customers – Reality or Fiction?
  
• How To Create A Great Customer Experience
  
• Delighting customers - Where do you start?
• Delighting Customers One Clip At A Time
  
• Products as a Personal Expression
  
• A Question Of Execution


• Why aren’t they selling more?


• Passionate employees - The fast track to revenue growth


• Passionate & Profitable: Why Customer Strategies Fail and 10 Steps to do them Right


• Decisions at The Moment of Truth