Most of us have grown up hearing about the importance of great customer service. It has been idolized as the key differentiator in acquisition and retention of customers. Like some type of “value-add”, technology has been seen as a facilitator of the customer experience. But has IT morphed into something that will replace the concept of customer service altogether?
We actually prefer to do it ourselves
Imagine that you arrive at an airport needing to travel from New York to Los Angeles. You can choose between Carrier A or Carrier B for your journey. Carrier A provides great gate service and free in-flight food but requires an in-person check in. The total time spent getting to boarding is three hours and the ticket price is $1,000. Carrier B only offers kiosk check in and no in-flight amenities but you can get to boarding in one hour and the ticket price is $850
Which airline do you choose?
The concept is not a new one
Do a Google search sometime with the term, “Great customer service makes the difference.” There will be thousands of results linking to articles, blogs, and research papers; all of them passionately advocating excellent customer service as the means of achieving success and profitability. Yet back in 2009, authors Bill Price and David Jaffee made the case in their book “The Best Service is No Service” that customers were much more interested in quickly obtaining exactly the product they wanted and avoiding time wasted by going through an intermediary such as a salesperson. Possibly the biggest revelation of this work was the prediction that customer self-service would quickly become the preferred method of business-to-consumer (B2C) interaction.
During the last decade, business leaders were starting to see that big expenditures in customer service staff and infrastructure weren’t likely going to pay off. What they couldn’t see was the enormous role that information technology was about to play in completely reshaping the entire corporate approach to sales and operations.
Information technology has become the business
Since 2011, IT has quietly shifted from a supporting function to being the center of business operations. Debating the new importance of IT has not always been easy for a CIO to do, especially in the presence of other CXOs. Imagine trying to tout the strategic imperative of investing in automated order fulfillment systems with a COO who is trying to justify the jobs of hundreds of customer service agents. But the realities of modern customer expectations are forcing leaders to change, or become irrelevant.
Let's take a look at a few examples that provide sharp illustrations of what is happening.
Ordering pizza – Most adults in the United States have ordered a pizza for delivery at least once. The common practice to get one has been to call into a restaurant, place an order, give an address, and then wait for the pizza to arrive. The driver presents the bill, takes the payment (and hopefully a tip), and delivers the pie. This transaction has involved at least two separate human interactions, which in total take about four minutes to complete.
For most customers, that process has now completely changed. Through automated portals, customers now go onto a website, specify exactly what pizza is desired, and pay with a credit card. A short time later, the pizza is handed off. This time there is only one human interaction that lasts no more than 15 seconds and no telephone (or human order taker) is needed.
Finding the perfect ride – Buying a car used to be one of the most emotionally taxing, complicated purchases a person could make. In order to get a good deal, a person needed to be a master negotiator, mechanic, and finance expert. Just 10 years ago, a standard car purchase involved conversations with a salesperson, sales manager, finance manager, and service expert. Through the use of online portals from companies like Beepi or Carvana, car buyers can now make a purchase completely online, even having the car delivered directly to their home.
Holiday Shopping – Many retailers determine success or failure by how many sales they make in the months of November and December. The holiday shopping season is a “make or break” time, but shoppers have always complained about the huge crowds and long lines that must be endured. Stores have done their best to accommodate customers during this critical time by hiring extra employees to ensure that everyone is serviced. Yet the frustration of having to physically go to a store, wait for help, and end up not finding the right product has left the door wide open for an alternative.
This year in the United States, holiday sales equaled about $656 billion and 50 percent of buyers made their purchases online. Amazon, an online self-service vendor, snagged almost 40 percent of these sales. This statistic is absolutely massive. One company can grab a majority of sales during the most critical sales period of the year with no storefront and virtually zero investment in customer service. If you are competing with Amazon, how can you afford to invest in customer service when they can destroy you while providing none at all?
The lesson to be learned
Information technology is now serious business. No longer just an enabling function, IT has become the “core business” of almost every major company in the world. The CEOs of tomorrow will not be looking to the COO or head of sales for strategies to dominate the competition. They will be looking to CIOs and the IT leadership in general for the ideas that will help companies evolve to survive in the online economy. If you are a technology leader, look around. The examples of how IT is completely remaking the entire customer experience are everywhere. If you lead this change within your own organization, your services will never be in more demand.
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