People and Lower Cost Channels

“Many of the truths that we cling to depend on our point of view.”
Obi-Wan Kenobi, Jedi Master

Lobby Elevator Display, Ritz-Carlton Washington, DC.

One of the most prevalent issues that my clients deal with is getting their customers to adopt the digital self-service channels that they’ve set up.

As it turns out, there is a limit to “if you build it, they will come.”

There are some tactics that can be executed to get people to switch some of their transactions to “automated” channels, but, for the most part, adoption of those self-service channels tend to plateau or get to much lower rates of growth, year-over-year.

Some of the drivers for this are ones that companies just can’t control — there is significant inertia for existing behaviors — especially when it comes to tech adoption. For example, in the mid/late 1990s, about 25% of US households were still using rotary phones — some 30 years after the introduction of touch tone dialing.

However, as I’ve worked with companies to understand how digital is changing their customers’ perspectives on money and healthcare, I have developed a hypothesis for another way of thinking about “channel adoption.”

And that is: people don’t really make a delineation between channels like web or voice. More and more, the primary distinction that people are making is between human and system. And whether they have a strong preference between human or system depends on how they perceive a few key factors at any given moment in time. These factors are:

• Perceived importance: How meaningful is the outcome of the interaction to the customer? There’s a big difference between a person planning a vacation looking up a frequent flyer balance vs. a new parent looking to treat the rash on his baby’s stomach.
• Uncertainty: The degree of familiarity that the customer has around the topic of the interaction.
• Confidence: Belief that the interaction will produce the desired outcome.
• Relative effectiveness: Perception of the relative marginal effectiveness of alternative means to get to the desired outcome.

So, for someone looking to see how many more frequent flyer points she needs to get to Platinum status, it’s likely she’ll be satisfied with a “system” interaction. However, for an inexperienced caregiver to a baby with a rash, there is a much higher likelihood that nothing other than an experienced human healthcare professional will be satisfactory.

How can companies apply this framework to help companies reduce cost of service?

1. Identify where the interactions lie on the importance continuum, by customer segment. The outcomes of the same set of financial services transactions will have different importance depending on the person enacting those transactions. Seek to understand why some customers place high importance on certain interaction outcomes.
2. Address the doubts. These may not not be rational and may not actually be related to the product or service you provide. For example, Zappos overcame doubts about buying shoes without trying them on first by instituting a low effort free returns policy, which essentially enabled customers to try on shoes in their homes with low to no hassle.
3. Make the system interactions powerful and easy. This means that the interactions with the system should convey not only that the system can do the things your customers want to get done, but that the system is good at “understanding” the customer’s intent. This doesn’t mean that the system should be represented as being able to do everything. Many times, customers trust a system more when it proactively indicates when it has reached its limits and transfers the interaction to a human.

Ultimately, it also means that companies should view switching customers to “systems” interactions as a longer-term effort. The reality is that, for almost all non-face-to-face interactions, customers have to go through some type of systems interaction first. If the company continually forces customers to systems-only interactions, it degrades customers’ confidence in the overall system, depresses their perception of relative effectiveness and does nothing to reduce uncertainty. Over time, the core emotional needs of customers from interactions with the company remains un-addressed and the customer’s relationship with the company is damaged.

In other words, to get your customers to embrace interacting with you via systems, you have to get the systems to embrace their humanity.