Written By: Susan Smithfield – International Director
In the past, self-service used to be confined to customers fetching their meal from the restaurant’s counter and cleaning up their tables after they have finished. Today, customers do many more tasks that fall in the self-service category, such as checking out their products by themselves at many purchasing points, filling their cars with gas without assistance, solving their problems by chatting with automated bots and even assembling the products themselves in some cases. For companies, the benefits are unambiguous. Costs are reduced in terms of staffing, customer care and other related expenses. And operations are improved. But for customers, the benefits are less straightforward.
When self-service adds value to the customer experience.
Self-service can be positive in that customers often prefer to do things their own way. Famous companies such as Build-a-Bearunderstood this inclination and allowed kids to design and make their stuffed animals according to their own wishes. As a result, customers spent more time at the workshop and were generally more fulfilled. It was a superior experience handsomely paid for by customers, and it enabled the brand to thrive.
IKEA’s success
When customers take part in the building of products, they give them their own touches, and thus assign more value to the products and the brand altogether. Such an approach enabled companies such as IKEA to maintain a large customer base and turn a net profit even in times of economic turmoil. Customer satisfaction has translated into financial health as IKEA’s growth has remained positive throughout the years; its gross profit reached 15.431 million euros from its global operations in 2016.
Figure 1:IKEA’s gross profit; Source: Statista (https://www.statista.com/statistics/241801/gross-profit-of-ikea-worldwide/)
The appeal of products that customers assemble by themselves has been called the IKEA effect in a research paper entitled “The ‘IKEA Effect’: When Labor Leads to Love”. Customers are joyous and feel that they are doing something meaningful when they have a role in making products. But this element in IKEA’s mix is not the only factor behind its success. The costs of assembling furniture are high, and IKEA’s approach has effectively slashed them. Then the company has passed on part of the surplus to customers by offering them inexpensive products. It has been a win-win situation, and customers have loved it.
But even less demanding self-service tasks are meeting with approval from customers. This is for a variety of reasons. Customers would almost always prefer to check out their products themselves if it takes two minutes instead of waiting in line for 10 minutes for a cashier. In many cases, self-service comes with less hassle and more flexibility. A survey of customers by Zendesk showed that 75 percent of respondents found self-service more convenient. Around 91 percent of respondents said they would use a company’s knowledge base if it answers their questions, rather than call the company representative directly. And around 40 percent of respondents said they would contact a call center only after they found no satisfactory answer.
With increased technological knowledge, customers are better able to serve themselves when it comes to searching for products, and they actually prefer to do so. This warrants an adequate response from companies, which can include optimizing the results of their website pages for frequent customer searches, tuning the knowledge base and staying up-to-date with customer searches.
Self-service alone is not always the best option.
IKEA and Build-a-Bear are two examples that show the success of self-service. However, they fall short of the bigger picture, and they might lead to false conclusions about this method. The timing of introduction of self-services can be critical, according to a study by researchers from ETH Zürich University in Switzerland and University of Paderborn in Germany. During the initial interactions between a customer and a company, the study says, it is important to offer customers both technological self-service channels and personal-service channels to allow them to choose the channel that is most suitable to their needs. If companies present customers with only one channel in the beginning of their relationship, they risk losing them to their rivals.
Further, whether self-service will influence customer experience positively or negatively relies on the characteristics of such a service (among other factors). In particular, the service should be clear and easy to use, and not complex or new. Moreover, customers should have the needed skills and motivation to perform the service, and enjoy doing it by themselves. If those conditions are not met, then personal service is the better option.
The merits of personal service should not be overlooked.
Given that self-service is not always the best choice, it is important to remember that personal service has its own advantages as well. Personal service is a more interactive experience that addresses the individual needs of every customer, offered with language variety. It can strengthen the relationship between the company and its clients via more personalized feedback to customers and proper customer attention and care.
Conclusion
While the data clearly shows a preference by customers to do things themselves, customers still demand self-service to be performed with the least effort and ambiguity. Whether a company should let its customers do things themselves or not depends on three main factors: the type of task they will be doing; the skill and motivation of customers; and the context. Using self-service in the wrong context or with customers who do not have the necessary skills can backfire and offset any gains from cost cuts associated with introducing such services. When used right, personal-service channels can also offer customers good experiences, particularly when they prefer direct communication and want to build meaningful relationships with the company, and prefer dealing with people rather than machines.