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Self Service – Of Cents & Sensibility Part 1

Self Service – Of Cents & Sensibility Part 1

By: Colin Taylor
A 1% improvement in customer satisfaction in utilities is worth 4.6% in market value growth so says Claes Fornell of the University of Michigan, producers of the American Customer Satisfaction Index. So if good service pays such high dividends: why is there so much poor service around?

Most customers encounter loyalty-eroding problems and situations when they engage with customer service, according to the Harvard Business Review;
56% report having to re-explain an issue
57% report having to switch from the web to the phone
59% report expending moderate-to-high effort to resolve an issue
59% report being transferred
62% report having to repeatedly contact the company to resolve an issue
After 2-3 self service attempt failures customers will not try it again

Service failures not only drive existing customers to defect—they also can repel prospective customers. Research shows:
25% of customers are likely to say something positive about their customer service experience
65% are likely to speak negatively
23% of customers who had a positive service interaction told 10 or more people about it
48% of customers who had negative experiences told 10 or more others

If this is the experience with live agents who have been hired and specifically trained to assist customers, why would any organization want to offer self service? So why do organizations want to employ self service? Traditional service with live agents or personnel is labour intensive. It costs a lot to deploy staff in a call center, in retail or even in a full service gas station. If we ever remembered the nostalgic service from multiple attendants we could find ourselves in a state of shock (as was the case in Back to the Future) or fear, as was the case in a recent CarMax television ad.
View the ad here. CarMax TV Ad

Costs Savings, Productivity & Technology
Having said that, fear is not a primary driver of self service. Self service is pursued for other reasons. It is cheaper to have customers serve themselves than to pay someone else to do this. The multiple attendants we saw in the CarMax video have been replaced by an intercom button to press if we have a problem pumping our own gas.

If we offer web based FAQ’s and customers can find what they want by themselves, it eliminates a call and or a live retail transaction, along with the associated labor costs. In this situation agents can and should then deal with more important, complex or urgent issues improving overall productivity.

Of course we can all be guilty of wanting the latest, greatest technology, technology envy perhaps. I recently upgraded my BlackBerry. It wasn’t that there was anything wrong with my old Blackberry, but the new one did have a faster internet connection and an upgraded keyboard. It was the also quite cool in my estimation. So I upgraded. In truth the main reason I did so was that it was cool. When asked why, I pointed to the internet speed and keyboard. In doing so I proved that old chestnut that people act upon emotion and rationalize with intellect. So if there is technology out there and we have read how it helped a similar organization, then we may want to try it in our shop.

So Self service can be less expensive, more productive and leverage cutting edge technologies. Cheaper, faster and sexier…what can go wrong?

Self Service almost 100 years Old
Before we go any further let’s take a look back — Self service as a concept is almost 95 years old.
In 1917, the US Patent Office awarded Clarence Saunders a patent for a “self-serving store.” Saunders invited his customers to collect the goods they wanted to buy from the store and present them to a cashier, rather than having the store employee consult a list presented by the customer, and collect the goods. Saunders licensed the business method to independent grocery stores, these operated under the memorable name “Piggly Wiggly.”

In 1961, Bell System developed a new tone dialling methodology (touch tone or DTMF- Dual Tone Multiple Frequency). In doing so Bell created the technological basis for the IVR or Interactive Voice Response system. It would take until the mid 80’s for the IVR to become commercially viable for call center applications. One of the first commercial uses in Canada was the Moosehead joke line that was created to support the launch of Moosehead beer in Ontario.

Invented by IBM, the first ATM was introduced in December 1972 at Lloyds Bank in the UK. Again it wouldn’t become a daily event for a decade.

1979: Michael Aldrich invented online shopping by allowing people to purchase product from his computer store, via his Usenet site. This was many years before the worldwide web became a reality.

The term “Web 2.0” was coined in January 1999 by Darcy DiNucci- denoting inter-operability. This is user centricity, and information sharing that gave birth to web self service. It took another 6 or 7 seven years to reach the masses.

More Volume and Less Success

So with self service existing for years and years what percentage of self service interactions are successful today? According TSIA only 39% of self service transactions were successful in 2010. But this is only half the story. The level of successful transactions has declined from 48% in 2003!

So we have a dichotomy here… people are more eager to deal with virtual agents according to Harvard Business Review, we are certainly more accustomed to interacting with technology than we were in 2003. Yet the success of self serve technology is declining. So why is this happening?

In part this is caused by attempts to implement more complex self service interaction opportunities and a frequent failure to properly plan and understand what the customer is willing and able to do.

In the past few decades we have seen a huge increase in self service transaction volumes even though fewer being deemed successful than we had in 2003, there are many, many more transactions today.

Airport Kiosk Check in introduced in 1995 and now represents 95% of all passenger check ins at Continental Airlines. It costs the airline less than 5% of the cost of a live ticket agent to process a passenger at a kiosk . Forresters reports the costs at $3.02 per live agent processing and $0.14 to $0.32 per kiosk processed check in.

Mobile airline check in, introduced in 2009 and ticket purchase are the new self service options on the horizon, with most airlines supporting this self service channel. 25% of airlines offer online check in today, rising to 81% within 3 years .

There are a number of Utilities employing self serve kiosks to deliver services to unbanked (those without bank accounts) and under banked (those that do not have access to online banking and therefore cannot employ other self service channels) customers. Some of these utilities include: Pacific Gas & Electric, Southern California Gas, San Antonio Water Systems, Arizona Power Service and Memphis Light, Gas, and Water.

The first self service gas station in North America was in Winnipeg MB in 1949 . Pay at Pump or prepay required by Law in BC. NJ and Oregon prohibit customers operating gas pumps…thereby making full service mandatory. Today there are 135,000 gas stations in North America, only 9% of these in Canada and more than 80% are self service.

Self service in the grocery industry was introduced almost a century ago. Yet true self service was much slower to evolve. Only 16% of supermarket transactions were completed via self-checkout in 2010 (down from 22% a year ago). Supermarket self-checkout being phased out by a number of US companies such as Albertsons and Big Y.

So why are adoption and utilization rates are declining for grocery self check out? As with most failures in self service, the problem isn’t the self service itself. In the case of grocery self service, the problem isn’t really self check out. It is coupons and bags. The systems are not well configured to support various sizes and shapes of coupons. Plus the location and method for placing the bags causes frequent problems. It is not the technology. It’s the process! We need to focus on the “Why” before the ‘How’

Customers accessing Web based content increased from 2.5 million in 2008 to more than 10 million in 2010. Interaction Volumes are growing annually by 20% or more according to TSIA. More than 60% of your customers who phone have tried to find the information on your website FIRST. More than a third will be on your website when they call!

According to Forrester Research, the cost of the average Web self-service session is just $1 USD, compared to $10 USD for an e-mail response and $33 USD for a telephone call. Many utilities have expanded their Web-based menus to customers and include more services such as bill payment, bill presentment, eBill signup, view payment history, view energy usage and bank drafting signup. These six services are available on Web sites at least 70 percent of utility organizations across North America.
For some utilities (PPL Electric- a Pennsylvania utility with 1.4 million customers) process more Web and IVR Self Service transactions than they do live calls – 630,000 Web self service, 400,000 IVR self service and 975,000 live calls over the same 5 month period of 2010.

Starbucks now has 3 million customers using mobile prepaid to pay for their coffee. Apple and Facebook are able to charge 30% commission vs. the 2-3% credit card players charge. ‘Mobile money’ is the second highest priority for Google.

Why can Apple and Facebook charge these exorbitant commissions and why is Mobile money # 2 on the Google ‘To Do’ List? – The combined market for all types of mobile payments is expected to reach more than $600B globally by 2013.

Mobile operators worldwide have achieved an average customer e-billing adoption rate of 56.8 percent while traditional telcos lag at just 17.2 percent. In August 2011, EFMA (European Mobile Association) published a report after surveying 150 European banks with McKinsey on mobile banking. Their findings are that banks believe mobile will fundamentally change retail banking within five years (70%), and yet the majority have fewer than ten employees working on mobile and have yet to make any change in their operations to exploit this capability.

How do you begin to address Mobile solutions? First look at the web reporting and analytics. You must look beyond the overall mobile vs. non-mobile usage performance for the entire website. If you examine this you will likely see somewhere around 5% of your website visitors are coming from mobile devices. Look at My Account Login information, Pay a Bill and ‘Contact Us’ pages. Mobile Watch reports that mobile devices are accounting for 20-25% of all web visits during major utility outage events. Mobile devices can account for upwards of 50% of “Contact Us” page visits. And guess what? If your website isn’t able to serve customers in a mobile-optimized and highly-usable way, 100% of those “Contact Us” visits through a mobile device will generate a phone call to your call center.

The second item to look at is, of course is your actual customers. If you use a customer satisfaction survey, you can add a question or two about customer’s mobile/communication preferences and willingness to complete transactions via mobile-optimized interfaces (mobile website, native downloadable ‘smartphone’ application or via SMS texting).

PG&E mobile bill payment application has seen double-digit growth month-over-month since its release, and the application is now one of the most downloaded free financial applications available through the Apple app store.

Forrester analysis found that 70% of online consumers are willing to replace paper bills and statements.
Mobile operators worldwide have achieved an average customer e-billing adoption rate of 56.8 percent while telcos lag at just 17.2 percent. There are interesting attributes associated with eBilling customers…eBilling Customers are ;
22% more likely to pay on time when using online banking
6% more likely to pay on time if they use company payment website
64% less likely to phone call centre for online bankers
39% less likely to phone call centre for website payers

Numerous studies have identified the savings when compared to traditional paper bills: eBilling can save 40- 50 cents per bill instead of paper billing. eBilling can also ramp up quite quickly. A Whitby utility reached 15% penetration in 6 months. QuestarGas hit 50k paperless customers in just 6 weeks.

Info Trends Research shows that the majority of customers still wish to receive traditional mail invoices,

However other channels are receiving increasing levels of interest- with 45% preferring email and 27% on website and 6% by text message/SMS, voice mail or social media. The totals here exceed 100% due to the ability to select more than one preferred channels. When Gen Y respondents are examined we find that 51% wish to receive their bill electronically versus 44% of the general population.

It’s not just paying their bills on line, Gen Y respondents also want to receive their invoices electronically… by email, SMS, download or browser based.

Interactive Voice Response systems that tried and true tool for call streaming, processing and allocation can become Indifferent Voice Response when no matter what the customer enters (or says) the path and result all seem to keep them cycling over and over through IVR Hell.

Although intended to improve customer satisfaction, a survey taken by Amplicate in 2010 found that 88% of people hate IVR’s . IVR’s have changed over the years from simple call routing: press 1 for this and 2 for that and messaging, to a self service tool- listen to FAQ’s, report an outage based on phone number, from purely touch tone to speech enabled and today to intelligent AI enabled virtual agents – think Emily for Bell or Ted for United Airlines. Speech enabled IVR’s can create more customer alienation than touch tone IVR’s . This is a result of the higher emotional involvement in yelling into a telephone versus pushing buttons harder and faster.

The most commonly reported problems with IVR are:
1.) Menu options are either too short or too long
2.) There is an imbalance between functionality and usability
3.) Customers can’t find a menu option that meets their needs
4.) Menu options are focused on company needs rather than customer needs
5.) The IVR menu options use jargon that is not readily understood by customers
6.) There is no way for customers to start over if they make a mistake
7.) Error messages blame the caller
8.) Multiple language options may not be justified by the customer
demographic profile
9.) More than five seconds of dead air can cause users to hang up and call back

Yet in spite of the challenges experienced with some IVR applications the overall IVR market size now over $2 billion. Customers are now more eager to have interactions with these virtual agents and more satisfied with the outcomes says HBR (Stop trying to delight your customers).

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