Self-Service Technology

     It’s late and I have had a long day at work. I just want to get home, but I know I promised to pick up some much needed items at the local grocery store on the way home. As luck would have it, the grocery store is packed and nearly every manned checkout line is three to four customers deep with shopping carts filled to the brim. I have three items in my hands. The express line extends through the health and beauty section. This is a nightmare. My only option seems to be the much loathed self-service checkout. I am not a fan of these machines primarily because every time I use them, the machine rejects some item I attempt to scan through which halts all other transactions and activates a revolving red lamp above my head like I just scored a goal in the Stanley Cup final. This light prompts the arrival of a human being (ironic) who must use his or her credentials to resolve the situation so that I may continue. Ultimately, this process takes more time than if I would have stuck it out in the longest of the ‘human’ cashier service lines. Whether bad luck or bad karma with machines, this is more often than not my experience. What I just described is one of the greatest challenges in implementing self-service technology (SST) – customer value. But it is not just customer value, it is perceived customer value and that perception lies with the individual interacting with the SST and their experience and how the results of that experience will lead to repeat visits.

Does this thing really add value? source: codinghorror.com



                Before looking at published strategies on effective implementation of SSTs, here presents a brief overview of exactly what an SST is and the primary reasons for use by businesses. Self-Service Technology empowers a user to perform a qualified transaction without human interaction. In his paper, “Implementing Self-Service Technology to Gain Competitive Advantages”, author Chang-tseh Hsieh identifies four primary types of SSTs:

1.       Telephone & interactive voice response (IVR) systems (example: customer survey over the phone)

2.       Interactive freestanding kiosks (example: stations at airports that allow you to print your boarding pass)

3.       Internet based or other on-line connection systems (examples: pay-at-the-pump gas and ATMs)

4.       Video/DVD/CD based technologies (example: the Marketplace Live simulation used in this class)

      A business chooses to implement an SST to fulfill one of three primary goals: customer service, enabling direct transactions, and education. SSTs have essentially turned the marketing services triangle (the interaction between the customer, the employee, and the company) into a marketing services pyramid. A research document article entitled “Technology Infusion in Service Encounters” states that the triangle becomes a pyramid because of the insertion of a “very important end point”, technology. Furthermore the authors state that “the service encounter is now seen as the dynamic relationship between employees, customers, and technology”. So with this SSTs have a lot of upside potential – customer demand, cost reduction, improved customer satisfaction, etc., but taking this conclusion and pairing it with a hasty implementation can bring a lot of problems. This is where we come back to my statement about perceived customer value. For certain the grocery store had the best intentions by implementing the self-service checkout, but my perception as the customer was a little different. It is my perception that firms must be sure not to overlook. Enough repeat visits like the scenario I described in the opening paragraph and I will be happy to purchase my bread and milk elsewhere.

                Mary Jo Bitner, Amy Ostrom, and Matt Meuter have recently published six important lessons for firms to consider when implementing SSTs. Following each lesson I offer a point or two as my observation of the lesson.

1.       Be very clear on the strategic purpose of the SST

a.       As with my personal experience, if your goal is customer value make sure that your customers see the value.

2.       Maintain a customer focus

a.       See my observation in lesson #1.

3.       Actively promote the use of SSTs

a.       Bitner calls this “Marketing 101” - Firms must go to any and all lengths to communicate this service to the customer along with all the benefits that come from using it.

4.       Prevent and manage failures

a.       Yes, it’s a machine and someday it will fail. The point here is to go to the greatest, most cost-effective effort to mitigate those failures, especially the ones that happen when a customer is using the machine.

b.      When a failure does happen, the concept of service recovery here cannot be overstressed. Bitner comments that “customers demand and expect effective service recovery when failures occur”. Firms need to make sure they empower ‘front line’ employees with the ability to ‘make things right’ when they go wrong.

5.       Offer choices

a.       This is my favorite. The machine may be the easiest most efficient piece of technology to use ever, but my father will go his entire lifetime without getting near one. He isn’t interested in using it either, but he likes shopping at your store. Keep him happy by offering a choice, namely traditional human interaction.  

b.      In other words, make service alternatives readily available.

6.       Be prepared for constant updating and continuous improvement.

a.       As firms enter the arena of SST production and distribution, the rate of evolution of the technology will continue to accelerate. With that in mind, firms need to have a ‘continuous improvement’ (CI) strategy in place from the beginning so as not to be stuck with an outdated SST.

     Without question, SSTs are the way of the future and are destined to become a permanent part of the purchasing transaction for many generations to come. Firms choosing to embrace this new technology must be aware of the pitfalls that come with such an endeavor. Proper implementation will lead to the attainment of the number one goal – customer satisfaction and loyalty.

Resources:

Bitner, Mary Jo., et. Al “Implementing Successful Self-Service Technologies [and Executive Commentary] The Academy of Management Executive (16:4, 2002) 96-109.

Bitner, Mary Jo, et. Al. “Technology Infusion in Service Encounters” Journal of the Academy of Marketing Science (28:1, 2000) 138-149.

Hsieh, Chang-tesh, “Implementing Self-Service Technology To Gain Competitive Advantages” Communications of the IIMA (5:1, 2005), 77-83.