A New Definition of Service

As the Starbucks-Dunkin comparison shows, "service" today often means providing customers with the power to do something for themselves rather than doing it for them. You pick 'em fruit orchards and vegetable farms have become more popular than ever, so have self-serve dog washes. There's even a new wave of pricey restaurants where customers pay to prepare their own dinners.

As part of this trend, self-serve technology has shed its old image as something limited to ATM machines and retail fuel pumps, and become the payment option of choice for a growing number of consumers when they purchase a variety of goods and services, from airline tickets and hotel rooms, to groceries and carwashes.

In a 2005 poll conducted by Retail Wire, 52% of respondents said they would like to see self-pay options available at more of the places they shop. By 2008, sales made through self-pay kiosks are expected to increase more than six-fold over what they were just two years ago, according to IHL Consulting, which tracks the industry. Click here to read more about the SiteWatch Xpress Pay Terminal self-pay station.

Choice Rules

Adding a self-pay terminal to your carwash can be an important step in addressing your customers' demand to control their own transactions, but is it enough? Some studies suggest that for a growing number of consumers, true control means being given a choice between using a self-pay terminal and being helped by a living and breathing person.

In a recent survey published in Kiosk Magazine Online, 36% of respondents said that retailers that provided both self-serve kiosks and employee-assisted transactions were more customer-service oriented than competitors that offered only one option. In another consumer poll, 86% of respondents cited "being given a choice of how to checkout" (kiosk or assisted) as a major benefit of shopping at a store with self-serve terminals. This made "choice" the most frequently mentioned benefit over both "speed" and "shorter lines."

The lesson here: consumers who can access news instantly with the click of a mouse, tune in their choice of stations on satellite radio, and take photos any time with their camera phones then e-mail them around the world, don't want to be restricted when it comes to paying for their everyday transactions. Technology has empowered these consumers with more choices and more control than earlier generations could ever have imagined. Like all other retailers, carwash operators should consider how they can adjust their businesses to meet the expectations of this new breed of customer.

The Lesson From Banks and ATM Machines

Increasingly, it appears that consumers can be divided into three categories when it comes to payment preferences: those that always seek the self-pay option, those that always want employee assistance, and those who go back and forth between the two, depending on the nature of their transaction and other "situational factors."

An example of the third group of customers is Barbara Votik, a North Carolina insurance agent cited in a business article who explained that she liked the speed of the self-serve lane at her supermarket, unless she had too many items. "If I have to spend too much of my time bagging my groceries, I'm not interested in them," she said.

Votik also uses self-service machines at the bank, provided there's a human teller around to help if necessary. "I still need to know I can talk to a person when I need to," she explained.

Retailers from a variety of industries have offered similar sentiments. Susan Dennis, a spokesperson for K-Mart, which was one of the first discounters to use self-check out lanes, observed, "Some customers prefer hands-on service and just don't want to participate. But all ages use self-checkout. The senior population is more apt to be hesitant, but some seniors really like the speed and ease of use."

Dr. Barton Weitz, director of the Center for Retailing Education at the University of Florida, cautions that the divergent customer attitudes toward the self-pay option is not necessarily connected to age or technological sophistication. "Whether or not they're technophobes, there's a significant segment that would rather do their shopping the traditional way," he said. "But there are other people who don't want to be hassled by a clerk. They like self-service."

Carwash operators should keep the needs of all three groups of customers in mind when considering payment options. Obviously, no one formula works for all carwashes -- some sites will undoubtedly grow and thrive with no self-pay option, while others will do equally well with only self-pay stations. However, given the fact that consumers have widely varied views of the self-pay concept, a combination of payment options might make sense in many situations. Click here to read about Busy Bee, a carwash that offers a choice between self-pay and employee-assisted transactions.

This is a lesson that can be drawn very clearly from the 30-year history of the ATM Machine. In the 1970s, when Automatic Teller Machines were introduced, many experts predicted that the familiar bank teller would go the way of the elevator operator or the "milkman" who used to deliver fresh dairy products to your door every morning.

As it turned out, these predictions were wrong. Although roughly seven out of ten Americans (67%) use ATMs, according to Ohio State University researchers, the number of bank tellers has actually increased, from 484,000 in 1985 to 539,000 in 2004. "When [ATMs were] first introduced, futurists thought we would be living in a teller-less society," said John Hall, a spokesman for the American Bankers Association. Instead, says Hall, ATMs have become an "enhancement" to a bank's services.

Most customers may use ATMs, but only a minority uses them exclusively. The majority of ATM users still feel more comfortable relying on a teller for certain banking functions such as deposits. According to research conducted by the Tower Group, approximately 80% of all cash withdrawals occur at ATMs. However, other studies show that only 10-15% of bank deposits are made through ATMs, while tellers account for about 70%.

Interestingly, when consumers were asked in a survey if they were likely to use an ATM to deposit cash, 56% said "yes." It appears that even though many people would like to see themselves being "technologically sophisticated" enough to use an ATM, when it actually comes to depositing our hard-earned money safely, many of us still value a reassuring human touch.

This mirrors a pattern seen in other retail industries: consumers seem to prefer attended transactions for larger purchases. According to the October 10, 2005 edition of the Facts, Figures & The Future e-newsletter published by AC Neilson, although up to 50% of daily retail transactions in the US can now be described as "self serve," only 15-35% of dollar volume is accounted for by self-pay terminals. "Shopping baskets are typically smaller sized, even in the 'express' staffed lanes," according to the newsletter.

The Human Factor

This person-to-person contact is so important, that even people who value the added efficiencies that come with an ATM still want the option of turning to a teller. In a 2003 survey conducted by Synergistics, 65% of bank customers cited "speed" as a key advantage of using an ATM. (This is not surprising in light of the time pressure that consumers feel themselves under today.) However, consumers gave the relatively slow "teller transaction" a higher satisfaction rating than ATM transactions in the JD Powers 2006 Retail Banking Satisfaction Study.

According to the Powers report, the level of reported satisfaction with a bank decreases as a customer makes fewer visits to the branch office, and therefore has fewer interactions with tellers. This should throw up a cautionary flag for carwash operators about relying too heavily on self-pay stations. Does minimizing interactions between your employees and customers run the risk of turning your carwash into a faceless commodity meant to be abandoned as soon as a cheaper, or more convenient alternative comes along? Another survey done in 2004 points to a similar conclusion. When asked to choose between waiting in a short line for a cashier at the supermarket and using a touch screen self check out, 83% chose self checkout. However, when asked what they would do if there were no line, only 39% opted for self checkout, meaning over half chose the cashier lane, indicating that all things being equal, they still valued person-to-person contact.

The "Human Error" Factor Although some customers crave the human touch in their daily transactions, others take a very different view. Giving a new meaning to the old axiom "to err is human," these consumers actively avoid employee driven transactions in favor of self-serve kiosks whenever possible, because they find this option to be more consistent and reliable. Speaking for this group, Watts Wacker of First Matter a consulting group said "Consumers have given up on the notion that a business will do something right. Things go much better when you do it yourself." In October 2004, Fast Company magazine ran an article on a Florida family that drove 12 miles out of their way to buy lunch at a McDonald's that had a self-ordering kiosk. The family whizzed past many other golden arches on their way to lunch, but they chose this particular restaurant, because its self-order kiosk gave them control over their transaction. As one of the family members explained, "We tell the (machine) what we want, and we know it's done right." In her case, this meant no onions on the burger. Apparently, this Florida family was not alone. According to the National Restaurant Association, three out of four consumers in the 8-24 age group prefer to order fast food through a kiosk than use an attended drive-thru.

Ironically, in some industries, the added efficiency of self-serve kiosks can sometimes have more to do with perception than reality. According to industry reports, a self-check in kiosk at the airport isn't necessarily faster than a human agent. (The machines speed up total transactions, because airlines can have more kiosks than agents.) However, passengers feel they're moving faster with self-check in, because they're taking action and controlling the process. "There's no question that self-check-in speeds the process tremendously," said Jason Schechter, a United Airlines spokesman. "It's not just about speed, though. It's about putting a lot of controls in the passenger's hands. That's a benefit that people overlook."

While this view may be a bit extreme, it does address an issue that concerns a large group of customers. This is especially true in a tight labor market, when finding and retaining good employees becomes more difficult.

"Self (pay) equals control -- and what people value most in day-to-day transactions is a sense of control," said Robert Goodwin, vice president of the Gartner research firm. "Its common practice for individuals to encounter inexperienced sales people, long lines and companies that are closed when you want to do business. As a result... using self-service kiosks have become a welcome alternative to most consumers."

As the stories cited in this paper indicate, consumers have widely different attitudes toward the self-pay concept. This fact should provide food for thought to any carwash operator developing a marketing strategy for the future.