In this cost conscious age many organisations are looking for ways to maintain margins by managing their cost base. When they look around for low hanging fruit they see the opportunities opened up by the increasingly connected world and the changes in people’s willingness to do themselves, what others have done for them before. The obvious success stories in this area are industries such as banking, retailing and travel.
In the increasing move to self service as a key component of a business model, organisations are often becoming blinkered in their business model development. Using the terminology of the business model canvas developed by Alex Osterwalder, Yves Pigneur et al in their Business Model Generation book they focus disproportionately on the ‘costs’ box at the expense of the other 8 elements.
The result of such an imbalance can be a customer experience that destroys value. With customers’ willingness to adopt new self service approaches there has also been a significant increase in customers’ expectations. For example, if we check-in for a flight on-line then we expect that the experience at the airport will be smoother than had we checked in traditionally. Equally, if something changes such as a seat allocation, or the flight is cancelled then we expect that the airline will deal with this for us, which often requires an airline employee to step back into the process. The best in class airlines in this field therefore needs to be better able to track where passengers are in order to swiftly and slickly remedy any issue. Airlines have not, therefore, seen all of the available benefits flow to the bottom line, they have in effect chosen to share the benefits with the consumer.
What we see with organisations that don’t look at the holistic customer experience is that they create an efficient experience when all parameters fit the designer’s idealistic view, however, exceptions, whether customer created or otherwise, cause a disproportionate failure in the customer experience.
Organisations confuse an efficient process with a cheap one and in reality one does not necessarily lead to the other. What really matters is the balance between cost and customer experience with the benefits of self service often having to be shared fairly shared between the parties. Some organisations will chose to offer a benefit in terms of price and others as in the example above will offer a better service.
Those organisations that assume that self service equals a reduction in service without a reduction in price may find that they lunch gets eaten by new players who judge that balance better.