Why Service Still Matters In A Self-Service World

Consumers who have grown accustomed to pumping their own gas and withdrawing money from ATMs have rapidly embraced the self-pay concept in other areas of their daily lives, from the supermarket to the carwash. According to a study from the IHL Consulting Group, Americans will spend $525 billion at self-pay terminals this year, more than three times the $128 billion spent in 2004, which itself was 80% higher than the 2003 spending level. Click here to learn about the SiteWatch Xpress Pay Terminal (XPT).

Isn't It Ironic?

However, even though consumers value the control and convenience that self-pay delivers, many still place a priority on personalized service. ATMs were first introduced in 1973, yet there are more bank tellers today than there were then. Bank customers are more likely to use a machine when they withdraw money, but still prefer a human teller when making a deposit.

The majority of shoppers - 61% according to AC Nielsen - have now used self-pay terminals at the supermarket, and over seven out of ten of us say we're happy with this payment system. Yet the majority of supermarket shoppers will select a real live cashier over a self-pay station if the lines at both lanes are roughly equal.

Even Internet shoppers, the group most comfortable with the self-service concept, still seek a human touch in their transactions. According to Forrester Research, 37% of web buyers request help when shopping online. Another respected pollster, Jupiter Research, estimates that live chat online increases website sales by 20%. Visitors who chat with a real person on CompUSA's website are ten times more likely to make a purchase, according to the company. Small wonder, then, that e-commerce industry leader Amazon.com has implemented a "click to call" button on its site for larger ticket purchases.

These marketers have learned a valuable lesson from listening to their customers: self-service does not mean "no service". Even customers who most value the convenience of serving themselves still want to be able to call in human help when needed, whether this means having an "attended" option always available, or providing them with ready access to a human advisor during their self-service transaction. Click here to read how Busy Bee Carwash increased dollars per vehicle on exterior sales by mixing the XPT self-pay station with an attended lane.

Balancing Labor Savings And Service

Maintaining a high level of personalized service after introducing a self-pay option requires that retailers invest at least some of the money saved on labor in enhancements that will make the customer's shopping experience more rewarding. Although it's true that kiosks do replace jobs, they are typically the repetitive, low-skilled kind. Savvy retailers will redirect some of the labor savings that result from eliminating these basic jobs to developing more service-oriented positions, according to Rufus Connell, industry research director of the highly-regarded technological research firm Frost & Sullivan.

"The trick is to make employees more effective rather than firing them," said Connell. For example, a supermarket typically eliminates three cashier positions when it adds a bank of four self-checkout lanes. If the supermarket takes at least one of those cashiers, and trains her to be a roving customer service ambassador in the deli department, its sales of high-ticket prepared foods will rise, increasing dollars per transaction.

Reinvesting the labor savings that result from self-pay technology into improving the service provided by employees will build a stronger sense of customer loyalty. The quick serve restaurant industry has been adding self-pay stations at a dizzying clip, largely in response to the demands of customers who want to save time. Yet, a poll of McDonald's, Burger King and Wendy's diners found that customers who had a positive experience with a "real live" employee were five times more likely to return to these eateries. By contrast, an "outstanding advertisement" only made customers three times more likely to return.

Now More Than Ever

In many respects, delivering top notch service through highly-motivated employees is even more important in a self-pay retail environment. Using a kiosk saves time and provides a much appreciated sense of control and privacy, but there's still a risk that checking into a hotel without small talk from a desk clerk, or getting a carwash without a warm hello from a greeter can leave a customer feeling alone and unappreciated. It can also turn the transaction into a cold, commoditized experience that robs a business of its personality and eliminates the emotional glue that cements a sense of loyalty.

Technology columnist and consultant Jack Aaronsen believes that these issues can be avoided, and self-service can coincide with personalized service, if a retailer looks at the entire transaction and selects opportune times to interact with the customer.

"Can customer loyalty based on human interaction coexist with the growing trend of self-service technologies that remove humans from the mix?" asked Aaronsen. "Yes. The point is to decouple the idea of customer interaction from existing only during the established bottlenecks in each industry. Traditionally hotels only interact with their guests during check-in and out…Airlines focus interactions on check-in… Automating these processes certainly removes human interaction during those events. But they aren't the only time loyalty is established… or broken. Removing the bottlenecks in these processes gives companies more time to interact with customers during other inflection points."

Using Aaronsen's terminology, an XPT can be seen as eliminating personal contact at the "bottleneck" point where customers pay for their washes. However, the carwash can create a new touch point with customers by having an employee at the tunnel entrance handing out "Thank You Cards" with a "Comments" section on the back and a barcoded discount coupon on the front. This extra flourish will establish a human bond with the customer, without taking too much time and slowing down the line. Click here to read how the built-in barcode reader in the XPT makes it possible to accept barcoded coupons.

Retailers who neglect to adjust their customer service strategies when they add a self-service kiosk are often disappointed with the results. The GAP's experiment with kiosks came up short, because the clothing store chain failed to realize that consumers want to talk to salespeople when buying something as personal as apparel.

In 2002, Home Depot added self-pay lanes as a cost-cutting move. Failing to reemploy at least some of its displaced cashiers in service positions, the home improvement chain saw its market share and stock price plummet as customers defected to its rival Lowe's.

As retailers in every industry are discovering, self-pay technology is revolutionizing the way transactions are completed, offering added convenience and a host of other benefits for businesses and their customers alike. However, there is one fundamental principle that even this breakthrough technology can't change - service is still the most critical part of the retail equation.