Customer Loyalty Versus Self-Service

There’s a trend in customer experience that goes against customer loyalty: self-service devoid of human interaction. Online customers are used to self-service, because the entire online shopping experience is based on this concept. Offline customers are just starting to see self-service kiosks across all major industries.

Customer loyalty, however, is generally based on customers’ desire for enriching user experiences, online and off-. Though personalization technologies have enabled automated online experience to be rich and needs-based, offline user experiences are usually only personalized when a human is involved. This flies in the face of self-service and automation. Some careful thought, however, shows how self-service and customer loyalty can exist side by side and actually improve one another’s effectiveness.

Several offline industries are transforming themselves with self-service. Banks, arguably the first industry to do this on a mass scale, installed ATMs over 30 years ago (the first patent was issued in 1973). In an effort to cut lines at airports (and reduce staff), most major airlines have installed self-service kiosks to enable speedy check-in. This idea follows more conventional transportation kiosks such as trains and subways have had (though the process is less complicated) for a long time.

More recently, retail has gotten into the mix. Stores such as Home Depot have rolled out “self checkout” lanes in which consumers scan their products themselves and pay with either cash or a credit card. Sophisticated systems monitor the items to ensure they’ve all been scanned and paid for. Several grocery chains also have self-service checkouts. Major hotel chains have thrown their hats into the self-service ring as well. They enable easy check-in and -out via lobby kiosks (and the more traditional “express checkout” available from in-room TVs).

Though all this self-service certainly speeds up processes that were once major bottlenecks for customers, it also removes the human touch from these interactions. In an age when customer loyalty is increasingly based on what brand provides the best customer service, it’s difficult to imagine how these machines can breed loyalty.

Additionally, once a store, hotel, or airline is completely automated, doesn’t the actual core business become a commodity? Removing the human brand elements of these establishments turns them into Web sites you visit in person. If all these stores, hotels, and airlines have a similar computer interface, what differentiates them? A hotel becomes a bed with a computer for check-in. A store (especially those selling prepackaged items, such as CDs or DVDs) becomes a Web site with real inventory.

What makes us loyal, then? In a hotel, it’s often the customer service that makes us want to return. Fairmont Hotels probably have the best customer service in the industry, as far as I’m concerned. Whatever loyalty program it may or may not have, I return to its hotels because of the quality of service provided by the employees. I once checked in at the San Francisco Fairmont for a conference I was keynoting. I was dreadfully sick and could hardly breathe. The man at the front desk knew I had to speak early the next morning. Five minutes after I arrived in my room, there was a knock at the door. The man at the front desk had ordered me matzo ball soup with a “get a good night’s rest and feel better” note. Wow. That’s customer service. That’s why I love the Fairmont.

Although loyalty is deserving of a whole column series, I’ll make one brief point about loyalty programs: loyalty is not based on reward systems. It’s based on customer service. I don’t stay at the Fairmont hoping that one day I’ll earn a free night’s stay. I’m loyal because of the way the employees treat me.

Imagine a world in which I checked in to the Fairmont using a computer. At what point would the computer realize I was sick, take pity on me, and send me soup? Never. The basis for my loyalty to the Fairmont wouldn’t exist.

Finding Other Moments to Interact

Can customer loyalty based on human interaction coexist with the growing trend of self-service technologies that remove humans from the mix? 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. Stores only interact with shoppers during checkout (and when the customer can’t find something). Airlines focus interactions on check-in.

Automating these processes certainly removes human interaction during those events. But they aren’t the only times loyalty is established… or broken. Removing the bottlenecks in these processes gives companies more time to interact with customers during other inflection points.

These other inflection points include events that aren’t as time sensitive. When I stay on the concierge level of my favorite hotel chain, the concierge makes a concerted effort to greet me during the floor’s happy hour, thank me for staying with the hotel again, and offers any personal assistance I may need. That interaction happens on my own time, when I’m relaxed, and means much more than a similar conversation during a “rushed” time (such as check-in).

Similarly, retail stores with automated checkout can find other inflection points (such as helping someone find a product, carry her bags, find similar items, etc.). Airlines mandate users wait at least an hour in the terminal before a flight boards. That long wait would be a perfect time for a liaison to personally welcome high-value frequent flyers or provide some other (more scaleable) service to breed loyalty.

Companies are too focused on interactions at the beginning (and end) of the customer experience: check-in and -out. Now that computers and self-service kiosks are automating these processes (and removing human interaction), companies must find other moments that are ripe for interaction. They need to identify these other inflection points and use them to build customer loyalty. They can be even more successful at garnering loyalty during these other inflection points as users aren’t crunched for time due to process bottlenecks.

Once we decouple the idea of removing bottlenecks (such as a long line at check-in) from removing human interaction, we get the best of both worlds. Computers should certainly be used to cut the time it takes customers to do mundane things. In doing so, they free the company’s employees of those tasks, letting them concentrate on these other customer interaction points. When employees are free to focus on anticipating customer needs, customer loyalty follows closely behind.

Then everyone wins.

Until next time…

Jack