Does Innovation and Technology Impact Customer Satisfaction? Is The Customer Relationship At Risk?

Technology is replacing humans in the search for business efficiency worldwide. Every time we turn around there is a new, supposedly more convenient device, terminal, or system designed to perform tasks once performed by humans. From pumping our own gas with a swipe of the credit card, to checking out our own groceries on a machine, to electronic ticketing at the airport, humans – specifically front line customer service personnel are being eliminated from the process.

The business innovation decisions are obvious. Machines don’t draw a salary or benefits, don’t have to be managed, and don’t require customer service training. From a quality control standpoint, transactions can be performed error free without human mistakes or variation. When it comes to creating customer satisfaction however, machines mostly fall short. The primary reason for this is the sacrifice of vital parts of the customer-supplier relationship.

Suppliers are making the conscious decision to reduce their commitment to the customer in favor of lower operational costs. Although this might seem like a standard business decision with immediate first quarter savings on the balance sheet, the long-term risks to the supplier may be huge, as the are foregoing the opportunity to build a relationship with the customer.

In my research on the customer supplier relationship and the ten predictors of customer satisfaction, ‘commitment to the customer’ is one of the ten. Customer commitment is the romance in the customer supplier relationship. How do I communicate to you that you are my most important customer, or that I care about you and have your long term best interests in mind? Commitment to the customer means continually soliciting customer needs, and taking responsibility for making sure products and services are well delivered. Machines perform a very limited set of functions and are incapable of human interaction. How many people you know go out of their way to look for a particular service person when they return to a business? Human beings don’t form this type of relationship with a machine.

Customers, in fact, want to have a relationship with the supplier, and it is the supplier that invariably screws things up because they don’t understand this basic fact of human behavior. Enter the cold, impersonal, behaviorally limited machine. Faster, yes. Efficient, yes. Lower cost for the supplier, yes. But is this what customers are really asking for? How many people do you know who would rather talk to voice mail than a live receptionist or operator? I never planned on checking and bagging my own groceries, and I love the small talk with my favorite supermarket cashiers as they process and bag my purchases. I have favorite ones I specifically select every time because we have a relationship.

There is no doubt that the competitive pressures of business are forcing higher and higher levels of efficiency and cost control, but what are the impacts of the decision to replace humans with automation when it comes to customer satisfaction? What we’re really talking about is return and recommend rate- the amount of times a customer will return to buy again and recommend that particular supplier to others. As customers become increasingly dissatisfied, loyalty is reduced and suppliers are vulnerable to competitors who deliver higher levels of satisfaction. Here in California, Albertson’s grocery stores have replaced several traditional cashier lines with automated self-checkout machines. I never use them and now do 90% of my shopping at Vons who has more human cashiers.

Sometimes automation is not only for the supplier’s cost savings benefit, but can actually provide an added service and convenience for customers. ATM machines are a perfect example. How did we ever get along without them? ATM’s effectively extend the hours for most of your common banking services like withdrawals and deposits round the clock. Automated processing is more efficient for the bank since the customer is hand entering their own information to the computer keyboard at the ATM and essentially doing the tellers work for them. Customers take this in stride with the additional convenience of these ubiquitous machines they can access at any hour of the day or night- to form a true win-win relationship. Banks still remain open for human-to-human interactions, and ATMs are an additional service for customers, not a replacement of the basic services they are used to.

Airline electronic ticketing on the other hand, is an example of core parts of the customer-supplier relationship being sacrificed by the supplier for cost savings. Hey, I don’t know exactly why American carriers are having so much trouble running their businesses well, but I want that same highly facilitated and courteous customer experience I’ve grown to expect over the years. Yes I want confirmation of my flight, my seat assignment, with my luggage checked in and the assurance that everything is running smoothly as I head for the gate with my ticket in hand. I don’t want to have to fight elbow to elbow with other travelers to access a terminal, swipe a private credit card number in a machine to find my reservation and have it spit out an undesirable seat assignment and not have the ability to answer even simple questions about my flight.

Ticket prices don’t seem to be getting lower as the level of human customer service is reduced. Although the airlines still have human personnel behind the counter to deal with the inevitable complexities of airline travel, their numbers are dwindling as the average customer is being increasingly directed to automated systems. Most customers don’t like this and on an apples- to-apples comparison, would prefer to do business with a company that gives them the real human attention they crave. There is opportunity to grab significant market share if an American carrier can figure out how to continuously resource service delivery with front line personnel who have good customer service skills and who will give customers the attention they want.

So how do customers behave when the customer-supplier relationship breaks down because of automation? It is not uncommon to see the relationship turn adversarial. The customer must now behave more aggressively to get their needs met. Customers routinely lie, cheat, cut in line, and even damage the supplier’s equipment with complete disregard. After all, the supplier obviously doesn’t care about them, and they don’t have to worry about offending a machine. I’ve seen people simply drop a gas hose on the ground after fueling because it was too much trouble to put it back on the hook after filling their own gas tank. Customers routinely kick and punch everything from vending machines to automated car washes when their push button selections don’t give them what they expect. Customers abandon check out items on the machine when they can’t figure out how to use it, or something doesn’t work as it should and leave to shop somewhere else. Some older customers who have a resistance to technology or can’t organize their transaction fast enough for the machine are intimidated and embarrassed by shopping in that store. Is that the effect the supplier planned for their customer?

Automation reduces communication. A customer supplier relationship should be a two-way, win-win relationship. Despite the advances in technology today, quality of communication with a machine is very low at best. This promotes the control of transactions by the supplier’s machine, with it’s very limited set of actions or options, to be very one sided, and increasingly win-lose for the customer. This lack of communication is intentional on the part of the supplier, who tries to resource only the customer support absolutely necessary in an effort to save money. What is the customer to do when the supplier makes every effort to avoid answering his needs and increasingly distances himself from the relationship? What gets communicated when customers are forced to deal primarily with automation is basically: ‘Give us your money and don’t expect much in return.’

Here are some questions suppliers should consider before they make the decision to automate product and service deliver rather than resource it with human customer service personnel:

  • Is it important to you to have a long-term relationship with your customers?
  • How important is the depth and quality of that relationship?
  • Does your business depend upon your customers remaining loyal?
  • Are your competitors delivering better service than you, or than you will if you add automation?
  • Are there other areas you could cut costs in first before you sacrifice human customer service?
  • Are you intentionally distancing your self from customer needs?
  • Are you under valuing the relationship your front line personnel have with your customers? Have you thought about how you could improve their relationship with customers?
  • Will customers be forced to go faster or have more limited access if you add automation?
  • Will your customers have challenges understanding or other resistance to your technology?
  • Do you plan to try and mold or modify your customer’s behavior with automation?

When suppliers choose to replace human customer service with automation because it is cheaper for them, the customer supplier relationship can suffer. When it genuinely solves a problem for customers or is provided as an additional service, however, it can be perceived as best practice. Customers want to deal with a supplier that uses the latest and greatest and continuously improves and innovates. When automation adds convenience, timeliness, additional service and quality, customers will respond positively. If it is a poor excuse for cost cutting and sacrifices the customer relationship, customer loyalty will drop from preference to indifference or from indifference to dissatisfaction.

There are nine other domains of satisfaction that influence a customer’s ultimate overall satisfaction rating, besides commitment (Quality, Value, Environment etc.)1. Commitment to the customer does have a strong influence on return and recommend rate, loyalty and preference and suppliers must consider the impacts carefully or they may automate themselves right out of business and no one can afford to lose business in the recession.

Remember, the ideal customer supplier-relationship is one of mutual benefit and should be respected a such. Anyone who makes the decision to sacrifice this relationship in the name of cost savings and efficiency is opening up the door to the competition who are ready to answer the gaps in the relationship you have left unfulfilled.