Six Sigma
Last Word


Last Word
Karl Albrecht, Ph.D.

Digitizing the Customer

The corporate love of technology has created a digital moat--leaving some customers stranded.

Many organizations, including most of the large ones, are making what I believe to be a dangerous mistake in applying digital technology--namely the electronic customer interface. Beginning in the mid-1990s many firms, particularly in the United States, began installing automated telephone "menu" systems that route customer calls through a series of decision points to the proper department. Some, such as AT&T, even began using digital speech-recognition technology, which routes customers' calls by asking for a spoken response to a synthesized voice and then deciphering the possible options from the caller's statement. As Japanese firms make increasing use of digital and online technology, many will be tempted to "digitize" their customers as well.

 Some firms have attempted to manage customer calls completely by automatic response, with no human contact of any kind. I recently had to call a city department to arrange for an inspector to visit my home and verify that some remodeling work met city building code requirements. When I called the proper telephone number, I keyed in various pieces of information. After I had completed my task, a computerized voice announced the day of the week on which the inspector would visit. And then the computer promptly disconnected my call.

 I was both impressed and appalled by this experience. Confirmed digital citizens will no doubt smile approvingly at this latest triumph of technology. Others may experience a sense of dismay in knowing that one more large organization, in this case a city government, has decided that human contact is too costly and not a worthwhile investment.

 Large organizations are demonstrating a clear, and probably unstoppable, trend toward using information technology to depopulate the customer interface and reduce the costs of managing customer relations. Banks do it, insurance companies do it, telephone companies do it, local utilities do it, airline companies do it, and so do many, many others. Web programmers refer to their software systems as "CRM" systems, for "customer relationship management." Despite all the reassuring terminology, I believe this to be a pernicious and destructive trend, for several reasons.

 First, it sends a clear message to the customer that says: "We're too busy to bother with your particular idiosyncrasies, so we're handing you over to the computer. You will be allowed to do whatever it's been programmed to do." It tells the customer that standardization, efficiency and cost savings are more important than any feelings or special needs a customer might have. It also says that any variation in the customer's need or problem that doesn't fit into the software algorithm is not important and will not be addressed. In the case of the city inspector, the computer simply announced the date of the inspection. I would have expected a human to verify that someone would be home on that day and to negotiate a more suitable date if not.

 It's as if many executives have decided to build a kind of digital moat around their organizations to keep the customers at a comfortable distance. By refusing to have a human being answer the telephone, not only do they save money, but they also avoid having to interact directly with an upset customer or one who has a complicated or time-consuming problem. The computer cannot--yet--hear and respond to the anger, frustration or apprehension in the voice of the caller, so nobody at the firm has to deal with his or her feelings. Further, since nobody knows which customers are disgruntled and which are satisfied, it's all too easy to assume that all customers are basically happy.

 It's abundantly clear that many people find this digital barrier offensive, off-putting and often frustrating. Yet, just as most people have accepted the proposition of doing part of the service employee's job themselves, such as operating the automated teller machine and filling their own gasoline tanks, most will probably passively accept the digital customer interface. Indeed, what choice will they have if this becomes the standard? What number do you call to tell someone the computer gave you lousy service? To whom do you complain about the complaints department?

 This tendency to digitize, standardize and depersonalize service interactions with customers will most likely turn out to be a mixed blessing for many large companies. While they are driving down their costs with information technology, they are dooming themselves and their service products to the status of standardized commodities, which will be under constant threat of replacement by other, cheaper information processes. They are turning their companies into vending machines.

 For the smaller firm, the big-company trend toward digitizing customers may present special opportunities for competitive advantage. By creating a customer experience that's unique, differentiated and valuable, the more service-oriented organization may be able to mark off a part of the playing field that the digital giants are not capable of (or interested in) dominating. It remains to be seen whether jaded consumers would respond favorably to a renewal in personalized, individualized service, especially when the largest providers are all pushing them toward commoditized products at ever lower prices. However, it makes little sense for the smaller firm to resort to the digital moat as a cost-reduction option as it typically enjoys very few other avenues for differentiation.

 At a deeper level, we may well see a consumer backlash against the arrogant anti-customer attitudes that prevail in most of the software industry. The computer is now a necessary part of business life and a popular artifact of most economically developed cultures. Consumers are becoming increasingly fed up with the exploitative ethos of "forced obsolescence" that forms the core value system of the industry. Software products have become increasingly unreliable as they've become ever more complex and short-lived.

 If software industry advocates hope to see the computer accepted universally in the culture--on a par with, say, the automobile--they will have to live up to the same customer expectations that apply to that product. How many people would put up with a car that stopped running at least once a day, stranding them on the way to or from work? How would they react to finding out they have to replace their car with a new one every few years even though there's nothing wrong with it?

 The same types of government controls that apply to cars and other consumer products could well become the fate of computers. Presently, the designers of commercial software products feel free to do just about anything they like to the customer's computer. Why shouldn't the software supplier be required to disclose exactly what the product does to the customer's computer, i.e., what files it adds to the hard disk and where; which files it modifies; and which files, if any, it deletes? Medications come with warnings about their side effects; why not require the same of software?

 If such a consumer backlash takes hold, it could create real problems for companies that can't adapt and real opportunities for those that can. The computer culture will have to learn a whole new set of attitudes and social skills to cope with it. Technical types will have to learn to express themselves in the language of ordinary people, not "geek-speak." They will have to learn to cater to all sorts of nontechnical priorities in order to sell their products to increasingly reluctant and demanding customers.

 There is a developing ideological dilemma that I believe will increasingly shape cultural and commercial attitudes toward the information revolution. Like it or not, we will come to the point of asking: Which is more important, culture or technology? Notwithstanding the soothing assurances offered by promoters of the digital future, the digitizing of society will pit human values against techno-values. We will begin to see the psychological and cultural downside of the digital society once it begins to cause pain. The cyberparadox is this: The more "wired" humans beings become, the more isolated they feel.

 The notion that people who sit for hours at keyboards typing at one another around the world constitute any kind of community will become increasingly bankrupt. The increasing atomization of society and the severing of personal connections to real communities will cause psychological stress and a sense of "connected anonymity." The "digital society" is a concept embraced and promoted mostly by people with a particular psychosocial orientation: the "loner" personality. To the extent that the rest of us allow a small minority with a particular sociopolitical ethos to dictate the design of our relationships, we will experience the stress that comes with a sense of dehumanization. We will very likely opt for enclaves of humanity, places and circumstances to which we can turn for a genuine sense of contact and community. Once we have wired the world, we can never unwire it again.


About the author

 Karl Albrecht, Ph.D., is a management consultant, futurist, speaker and author. He has written more than 20 books on management and organizational effectiveness including the best-sellers Service America!: Doing Business in the New Economy, The Only Thing That Matters: Bringing the Power of the Customer Into the Center of Your Business, and The Northbound Train: Finding the Purpose, Setting the Direction, Shaping the Destiny of Your Organization. His latest book, published by the American Management Association, is Corporate Radar: Tracking The Forces That Are Shaping Your Business.

 Contact him through his firm's Web site at www.karlalbrecht.com , or e-mail him at kalbrecht@qualitydigest.com .

Menu Level Above

This Menu LeveL

Menu Level Below

[Contents] [News] [WebLinks] [Columnists]
[Harrington] [Crosby] [Six Sigma] [Godfrey] [Townsend] [Marash] [Last Word]

Copyright 2000 QCI International. All rights reserved.
Quality Digest can be reached by phone at (530) 893-4095. E-mail:
Click Here

Today's Specials