Sign Up Free Consultation
  • 62 Central, West Boylston
    MA. - 01583 USA
  • Call Us Today
    1-508-835-1123
  • Working Hours
    Mon - Fri 08:00AM to 5:00PM

[Must Read] The pampered and the paupers

Hope you had a great weekend. I came across the article below in The Economist and thought it was so applicable to the security industry, that I wanted to share it with you.

The bottom line is: You should be doing more pampering of your clients and become an elegant, full-service security company like Virgin Airlines, Ritz Carlton, Nordstroms, etc. You need to create sticky clients that will pay you for life. Read on the learn how…

Piggly Wiggly

The Piggly Wiggly Way
IN 1916 Clarence Saunders changed the face of retailing when he opened his first Piggly Wiggly supermarket in Memphis, Tennessee. Hitherto, shops had kept all their goods behind the counter: customers told the staff what they wanted, waited while their purchases were bagged up, then handed over their money. Saunders came up with the idea of self-service. Customers selected their own groceries from the shelves, and took their baskets to a cashier on the way out. Saunders proclaimed that by cutting labour costs his idea would “slay the demon of high prices”.

At its height, in 1932, the Piggly Wiggly empire had 2,660 stores. Saunders had lost control of the company in the 1920s but he kept innovating, seeking to perfect the fully automated shop. This included working on a “shopping brain”, which shoppers would use to keep a tally of their bills. As a business Piggly Wiggly is now a shadow of its former self: it has only about 600 stores in 17 American states. But as an idea it has conquered the world.

The self-service revolution rolls on to this day. CVS, an American pharmacy chain, has replaced cashiers with self-service pay-points. Waitrose, a British grocery chain, offers customers a modern-day version of Saunders’s shopping brain, to scan and tot up their purchases. Banks are making it ever easier to do transactions online, while cutting their branches. Following a model pioneered in America by such firms as Avon and Tupperware, Unilever and other consumer-goods giants are seeking to convert some of their emerging-market customers into freelance salesfolk, who peddle their products to friends and neighbours.

The travel industry has been particularly ruthless in engineering its own staff out of its business. You book your trip using a price-comparison app on your smartphone. You print your boarding passes before setting out. At the airport you scan them, and your passport, at a machine. Some airlines now expect you to weigh and tag your own luggage, and haul it on to the conveyor. At your hotel, there may be no check-in staff, let alone porters: Omena hotels, a Scandinavian hotel chain, sends its customers PIN codes which they can use to open their doors. Soon, a wave of the Apple Watch on your wrist will be all it takes.

The variety of businesses touched by the self-service revolution is ever greater. Threadless, a group of clothes designers, invites customers to submit their own patterns and to vote on which ones should go into production. Tech companies turn their most knowledgeable customers into unpaid troubleshooters by encouraging them to participate in “user forums”, where they solve others’ technical problems. The Huffington Post, an online newspaper, gets its readers to write as unpaid columnists. GE is working towards a world in which it no longer has to keep a stock of spare parts for its jet engines: customers will download digital designs of the parts, and make them on their own 3D printers.

This is all wonderful for businesses. But what about their customers? In a new book, “Shadow Work”, Craig Lambert presents a dystopian vision of the self-service revolution. The reason why so many people feel overworked these days is that they are constantly being asked to do “unseen” jobs by everybody from Amazon to the Internal Revenue Service to the local school board. And the reason why they feel so alienated is that they spend so much time pressing buttons and speaking to machines rather than interacting with other people.

Mr Lambert is perhaps too gloomy. The self-service revolution is partly driven by customers’ own preferences: it is quicker to choose your own groceries than to wait for someone to do it for you; it is easier to print your boarding passes at home than queue at the check-in counter. And customers can fight back: complaints about automated telephone services have forced some companies to revert to having people answer the phone. Many people are now refusing to drive to out-of-town, self-service supermarkets, choosing instead to have their shopping delivered.

But he is right about the enervating cumulative effect of all the instances where personal service has been replaced with self-service. Being able to do one or two things for yourself can feel liberating; having to do everything can make you feel like a slave to the machine. And the trend is far from over. Some bars are trying out a technology called iPourIt, in which drinkers have to wear a wireless wristband that monitors how much booze they are serving themselves from the taps. Before long, no doubt, self-service barbershops will invite customers to pop their heads into a clipping machine and turn a dial to select the severity of the cut.

The pampered and the paupers
The rise and rise of the self-service business raises two worries in particular. The first is for society as a whole. Even as they eliminate the personal touch from their mass-market offerings, service industries keep chasing the well-heeled with extravagant, premium-priced offerings. Consumers are being ever more clearly divided into a “cattle class”, herded into the back of the cabin and offered precious little service, and a pampered “business class”, for whom no amount of fawning is too much. (Fly Virgin Atlantic in its ironically titled Upper Class and you get a private car to take you to and from the airports, and flunkeys waiting in the lounge to polish your shoes and cut your hair.) Not only might this intensify resentment of the haves by the have-nots; it also robs the have-nots of entry-level jobs.

The second worry is for businesses themselves. If they never meet their customers, they will lose touch with them. And although self-service is great for saving costs, its effect over time is to train customers to shop on price, and thus to switch as soon as a slightly cheaper rival comes along. If firms abandon trying to differentiate themselves with good service, they are making themselves vulnerable to the sort of attack Britain’s mainstream supermarkets are now suffering from an invasion of German discounters. That’s where the Piggly Wiggly way leads.[end of article]

The Classified Brief
Re-read the last paragraph above. Do you want to differentiate yourself from your competitors by offering exceptional customer service or train your customers to shop by price – where they switch as soon as a cheaper rival comes along? I know what my answer is.

Article Link: http://www.economist.com/news/business/21650554-businesses-should-think-carefully-about-continuing-heap-work-their-customers-piggly#4XWEPwh4UG89LFXP.99

Post a comment