Self-Service Cautions: Are You Losing Revenue?

Self-Service Cautions: Are You Losing Revenue?

Some experts advise that you focus most service on your top customers and leave less valuable customers (Silver, Bronze and Lead) to self-service options.

Fact:  There may be more incremental revenue and profit to be gained from Silver and Bronze customers than Gold customers.

Fact: Self-service choices should be determined by the revenue potential of the specific transaction and customer preferences.

Leading Customers to Water for Self-Service

The blanket premise of rationing great personal service to the top echelon is dead wrong for three reasons:

  1. Your current Silver or Bronze customer may become a Gold customer if you treat them right.  Bath and Body Works has found that low-spending in-store customers often will spend three times as much online. You are probably getting already all the revenue from the Gold customers, so greater service will not produce more revenue.
  2. Many customers of all levels are happy to use self-service for simple transactions, such as checking the status of a shipment.  Bath and Body Works encourages use of all channels for all customers, by including phone numbers on the website and web URLs in the catalog.
  3. While self-service saves some costs, it also has significant drawbacks:
  • You cannot explain policies, and the customer can go away unsatisfied, but without speaking up.

  • You cannot cross-sell effectively.

  • You cannot create an emotional  “connection” with the customer via self-service.  If you establish a relationship, or create a memorable transaction, it will raise loyalty and foster great word of mouth. One cataloger tells their service reps that on Thursday afternoons, when things are bit slower, they should chat with the customer a little – perhaps about pets, kids, or other topics.

Contrary to what one service author writes, the best service in my opinion is NOT No Service, it is selective personal service and what one company calls, “Microbursts of Emotional Connection.” These 20-40 second connections can raise top box loyalty by 25% or more.

Finally, customers will use self-service more often if you invest time and resources into teaching them what it does and how to do it. One high-tech company found that over 40% of customers started using the self-service channel regularly after receiving just two minutes of education. You must lead the horse to water and give it a sip if you want it to drink.

What you can do tomorrow for your business:

1. Experiment with giving a set of Silver and Bronze customers the Gold level of service and see how many of them grow their business with you compared to a control group.

2. Experiment with giving a set of other mid-value customers an emotional connection microburst – like asking them about what their business does or another topic other than the basic transaction.  Again, look at customer satisfaction and business trends.

3. Analyze those transactions that start out as self-service and end up more hands-on.  Identify why the customer was calling and consider encouraging hands-on contact when tasks do not lend themselves to self-service.

John Goodman is Vice-Chairman of Customer Care Measurement and Consulting.  He co-founded TARP (Technical Assistance Research Programs), an agency that pioneered the 800 number and the science of customer experience. Goodman managed a White House sponsored evaluation of complaint handling practices in government and business. His book, Strategic Customer Service, is available from Amazon.  He can be reached at jgoodman@customercaremc.com.

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