Demanding Customer (Self) Service
Badly designed experiences are driving unnecessary customer servicing, ultimately killing companies’ ability to scale and compete.
There’s a term within customer service centres that’s used to categorise all incoming customer phone calls, emails, etc. that are the result of the core product or service not working as the customer expects: failure demand.
A brief example, to bring this to life: A customer logs into their Internet banking and tries to add a new payee. The website displays a complicated error message and leaves the customer confused. As a result of the failure, they phone the help desk number to speak to a customer service agent to either a) add a new payee over the phone or b) troubleshoot the issue and complete the task online or revert back to a). All of the resultant activity is entirely avoidable; a bug in the system.
The opposite of failure demand is value demand. That is, demand that fulfils a customer need and that they are willing to pay for (either directly or bundled as part of the overall product or service). Using the example above, a customer may choose to phone the servicing team to add a new payee instead of using whatever self-service tools they have at their disposal.
I’ve worked in and around a number of contact centres now and one thing struck me recently: all incoming demand, regardless of it being linked to an issue with the product or service or not, is failure demand.
If you’re designing a product or service today that is built to be used primarily through digital channels, any incoming contact centre demand is a sign that you’ve a) built the wrong thing, b) built the right thing incorrectly or c) haven’t taught your customers how to use the thing.
I think this theory only began to hold true in recent years, when a number of everyday services finally had at least one strong example of a fully online, self-service experience. GDS (the UK government’s digital arm) speared-headed this trend in the UK public sector. Companies like Plum and Monzo are close to realising the very same thing in financial services.
The failure demand these companies now experience is not a result of the product or service not working as the customer expected. No, the failure is that the product or service is not designed to fail gracefully and help the customer get back on track independently. And, in some cases, the failure is one step before that, where the service is not designed to progressively disclose or reveal functionality to users as they become more capable and comfortable; instead the customer is overwhelmed by complexity, which translates into frustration and ultimately the simplest solution - talking to a human.
This trend results in greater employee leverage and lower cost to serve. Companies focused on maximising self-service and minimising all incoming customer service demand are able to scale at unfathomable rates. Facebook is able to serve over 60,000 customers per employee, Revolut currently serves ~2,000 customers per employee. At the other end, RBS serves ~300 customers per employee. Additionally Monzo reported each user costs them £5 in customer servicing activity per year; traditional banks can pay almost as much for one incoming phone call to their contact centre.
There may still be a segment of customers that value contact centre-based servicing, but I’m willing to bet this is a shrinking segment that is served by shrinking companies until they both vanish. The economics are unsustainable, the competition is fighting for hyper-scale, and customers are becoming more accustomed to self-service experiences.