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Six Simple Rules For Building Successful Self-Service Applications

By ALICE DRAGOON

October 15, 2005 — CIO —

Chances are it’s been about 20 years since you’ve stood in line at your bank to get cash from a teller. ATMs offer such convenience—and are so much more efficient for banks—that no one can fathom going back to the old days. Ever since then, companies have been eager to tap into the free labor pool of customers who can be convinced to help themselves. Through self-service, organizations have been able to reduce labor costs, increase revenue from orders of out-of-stock items or increase the loyalty of customers who appreciate speedier service.

But as surely as you love using ATMs, you’ve walked away from a kiosk that’s confusing or abandoned an unscannable item at the self-checkout line—and some company lost a sale. The reality is that although some self-service projects pay off handsomely, the ROI from such projects can be elusive. Francie Mendelsohn, president of Summit Research Associates, estimates that 15 percent to 20 percent of all self-service kiosk projects ultimately fail. Success with kiosks and self-checkout systems is often tricky to achieve because so many things can go wrong. Such systems won’t work if customers have no incentive to use them. If kiosks are too complex, customers get confused and give up in frustration. Sometimes, self-service fails for the simple reason that customers don’t know it’s an option or are wary of trying it on their own.

American Greetings once spent millions on kiosks that enabled people to design their own cards, only to find that customers weren’t willing to pay a premium for their own creativity. Grocery chain Hannaford Bros. fared better, but its first attempt at self-service fizzled. In the late ’90s, Hannaford piloted handheld self-checkout scanners in its Scarborough, Maine, store. The few customers who used the scanners loved them, says Hannaford CIO Bill Homa, and tended to spend more. But no more than 11 percent of customers used the tool, so Homa couldn’t justify a full rollout. Homa suspected that customers, who were required to sign out a scanner but still had to pay a cashier, found the scanners too much of a bother. So Hannaford turned to the more convenient self-checkout lanes. Today, as much as 28 percent of customers use the service and the ROI is slightly ahead of breakeven.

Companies such as Hannaford that have done well with self-service succeed by following six simple rules, which they derived from their own and others’ mistakes. Learn from them, and you can fix what ails your own self-service systems—or even get them right the first time.

 

 

 

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