Welcome To The New Self-Service Economy

Smart companies are jumping on the Zipcar bandwagon, offering customers greater control over services, argues Ziba’s Cale Thompson.

On a hot summer afternoon, a young family is out in a farm field, picking strawberries and placing them carefully onto flats. Their backs are sore and their clothes are stained with sweat, yet they’re happily working away, anticipating the moment when they’ll load their flats into the car and drive away. When it comes time to pay on the way out, they’ll do so happily, despite the fact that they’re spending nearly as much as they would have on identical berries at a supermarket close to home. The U-Pick berry farm where this scene plays out represents a business model that’s been embraced by consumers for decades, but it defies the traditional laws of commerce. Why would anyone choose to do something themselves that a reasonably priced professional could do faster and at far greater convenience?

The shift in commercial roles at play here has plenty to teach the business world at large, and lately, the business world has been learning. Whether picking berries, banking, renting a car, or repairing a motorcycle, customers are seeking greater influence in an increasing variety of commercial interactions, even if it means spending more money or dealing with inconvenience. Where convenience and expertise were once king, they’re losing ground to experiences that the customer can control. Organizations that found past success by offering to do our work for us now defend their worth by pointing to specialized abilities, technologies, tools, and information--things they were once the only ones to possess. But as customers gain access to those same tools and information, they’ve become more empowered to close the gaps between themselves and services--gaps that they often see as artificial creations of those companies.

This shift can pose a threat. Companies that are reluctant to redesign the experiences they provide may find customers seizing control, whether they like it or not. Some of the world’s biggest retailers have watched their customers, in just a few years, turn formerly profitable stores into staffed display rooms, browsing electronics and housewares in real life before making their purchases online. The practice of showrooming is now so commonplace that this once novel term has become an integral part of the modern retail lexicon.

4 Industries Reshaped By Self-Service

Other companies see the shift as an opportunity, and take advantage of the fact that customers who wield more influence are also willing to assume more responsibility. Florida-based PODS, for example, transformed the moving and storage business in the early 2000s by offering customers a new kind of service in which they call the shots . . . and take the risks. Before PODS, house moving was largely a company-controlled experience: Customers paid a fortune for full-service movers, or they rented a truck and scrambled to complete the move on their own, within a time frame dictated by the rental agency. PODS disrupted the industry by finding a middle ground, offering to handle the moving, but giving customers control over the process. Now the customer defines an extended window of time for pickup, takes care of the very personal process of packing and securing the contents, and leaves the specialized portion of the move--actually transporting the contents--to the professionals. PODS, in turn, steps back, giving up control of certain activities and placing responsibility for proper packing on the customer. By actively limiting their own role, PODS seized a large part of the moving market, and nearly every other major moving company has followed suit with a similar service.

More established companies have used the opportunity to redefine their role. The utility company San Diego Gas and Electric has spent the last few years transforming its customer relationships into partnerships, where they support subscribers in their quest to reduce their environmental impact. Besides answering billing questions, its call center employees also give advice on how to reduce energy consumption, taking advantage of the wealth of energy usage data they’ve already collected. SDG&E also fosters partnerships with local private companies that can help customers use that data to further improve energy efficiency. The increased staff training and active partner-seeking are both ways in which SDG&E has stepped up, and customers have responded by embracing it with the kind of enthusiasm rarely expressed toward utilities.

Car and motorcycle repair was once a stronghold of DIY expertise, with car ownership in the ’50s and ’60s often demanding familiarity with the basics of car mechanics. As motor vehicles have gotten more complex, though, they’ve also tended to discourage owner maintenance--a trend that a small number of mechanic shops have started to push back against, with notable success. MotoMethod, a motorcycle repair shop in Vancouver, BC, now offers repair bays and tools to customers who want to perform their own repairs, as well as advice and diagnostic services by the hour. By expanding its role from mechanic to coach and facilitator, MotoMethod has expanded its customer base and range of offerings, which now include monthly repair-bay memberships. It’s also given customers the option of taking more control over the process, turning a straightforward service interaction into an opportunity to reduce costs, explore a hobby, and learn new skills.

Health care is looking at a similar shift. Traditionally, the doctor was the primary source of health-related information for each patient, but increasingly, health-care companies are empowering patients to find their own answers, by letting them track and review their own test results and connecting them with knowledgeable peers. MyChart, a recently launched web- and phone-based tool, makes it dramatically more convenient for patients to access medical information and communicate with health-care professionals. Along with other transparency-enhancing policies, this technology helps move customers closer to the center of a health conversation in which they were once passive listeners, while encouraging them to take more responsibility for the outcome.

Each of these transformations starts with an acknowledgement that customers want more influence in the interaction, and are savvy enough to exert that influence even if it’s not offered (just ask any victim of showrooming). Where customer relationships were once defined through marketing, today’s customers increasingly demand control over the offerings themselves and may rebel if what they experience doesn’t match what marketing promised. It’s not just a theory--Ziba’s clients regularly ask for service design support as they try to transform these relationships, to ensure that the control they’re granting customers doesn’t sacrifice the quality of their offering, or dissolve the identity they’ve built over the years.

A Cultural Experiment

So where do these insights lead companies in the near future? Avis Car Rental’s recent acquisition of Zipcar makes for an excellent test case: a large, well-established company based on a traditional service model, purchasing a smaller, younger company that’s literally handing the keys to its customers. Zipcar may have earned early notoriety for pioneering short-term car rental in North America, but its growth and popularity are much more a result of its customer experience--one that places influence and responsibility in the hands of the consumer.

Most analysts predict one of two things: Either Avis will squash Zipcar’s customer-centered culture, or Zipcar will teach Avis a thing or two about relinquishing control. Many of the small moments that make Zipcar’s experience so great--the transparency of knowing what car you’re getting and at what cost, the ability to book and modify via mobile app, the ease of unlocking and driving away--could easily translate to the traditional rental market. Imagine picking out a car via smartphone while waiting for your luggage, then walking to the rental lot and driving off. There’s no need for long lines, insurance forms, and sales associates trying to upsell you on the spot, and Zipcar is proof.

A lack of intention is not what holds companies like Avis back. All successful organizations pay attention to customers’ needs, but the revolution in customer control requires more than just addressing their pain points. What’s needed today is a new, brand-specific definition of the customer relationship, based on an honest understanding of their expectations for influence. Customers have never been so empowered to talk--to companies and to each other--and companies have never been so eager to solicit feedback.

But don’t think for a moment that this is sufficient. Through thousands of hours of observation and interviews, we’ve found that most customers are still unsatisfied with their ability to define brand relationships, and that few organizations are committed to meeting this need. The few proactive ones that have--the U-Pick berry farms of tomorrow--are building some of the most robust relationships in the market.

[Image: Hand, Strawberry, and Arrows via Shutterstock]

Add New Comment

0 Comments