We have seen the self-service model grow exponentially over the years. ATMs were one of the first examples of this model in action. As consumers embrace convenience, and with technology integrated into daily life, this business model can be seen in just about every industry now. In this article, we will discuss what the self-service model looks like and some of its major benefits and obstacles.
What is the Self-Service Business Model?
The self-service business model allows customers to access products or services independently. They can essentially serve themselves. In this model, customers don’t have to rely on a company representative to interact with the business. With the use of technology, a business will provide the necessary tools and resources for a customer to engage with that business’s offerings autonomously. This business model would fall into the low-touch business model category.
One of the main characteristics of this business model is utilizing automated and user-friendly channels. These user-friendly interfaces are also paired with extensive support resources to help enable customers to fix issues they may run into. Accessibility and convenience are top priorities with this model. Customers should be provided with an easy and clear way to complete tasks.
Kiosks, online portals, mobile apps, and other interactive technology, provide customers this power to serve themselves. Some examples of the self-service business model are self-checkout kiosks at grocery stores, booking a hotel and completing check-in through a mobile app, or a chatbot providing resources to help with an issue.
The self-service model can be a full model, where regular customers don’t need any interaction with customer service representatives. Or businesses can implement a self-service model for certain processes. For example, something like check-in processes for appointments. However, the business can still dedicate its team to more complex tasks that customers may not be able to complete independently.
Usually, self-service businesses are business-to-consumer (B2C). This means that their more likely looking to service individuals instead of other businesses.
How This Model Has Changed the Way Business is Done
The Self-Service Business Model has revolutionized the way businesses interact with customers. Some feel this change has been great for both sides. Others feel that this approach is damaging the connection between businesses and their customers. One thing for sure is that this model has fundamentally altered the customer experience and business operations.
Traditionally, businesses relied heavily on direct interactions, with employees playing a central role in guiding customers through transactions and services. However, the advent of the self-service model has shifted this dynamic. Now customers are powered with the autonomy to manage their transactions and access services independently.
One of the most significant changes brought about by this model is the enhanced convenience for customers as we mentioned earlier. This autonomy not only saves time but also allows customers to engage with businesses on their terms even outside of the traditional business hours. For online transactions, 88% of customers state they want access to a self-service portal when shopping online according to one survey.
This preference has also spread to the real world. Another survey found that 73% of consumers prefer self-checkout over staffed checkout lines. 85% of Gen Z consumers use self-checkout when available. As the younger generation adopts this method of doing business, more industries are more likely to adapt to their comfort with this model.
Also, the self-service model has led to increased efficiency and cost savings for businesses. This efficiency often translates to faster service for customers, as automated systems can handle multiple interactions simultaneously, without the limitations of human speed and capacity. We’ll look more at these benefits in the next section.
However, the challenge for businesses now lies in maintaining a personal connection with their customers. Businesses need to balance automation with opportunities for human interaction. This is particularly vital for complex or sensitive issues where personal assistance is more effective.
The self-service model also demands a greater focus on user-friendly design and accessibility. Businesses must invest in intuitive interfaces and clear instructions to ensure their platforms are easily navigable for a diverse range of customers, including those who are not tech-savvy.
Benefits of the Self-Service Model
24/7 Access
In implementing user-friendly technology, clients will be able to access products and services 24/7. Instead of only being able to access them during normal business hours and when a representative is available. Customers can engage with the business at their own pace and schedule.
This provides more flexibility, and again convenience, for consumers. This 24/7 access also provides a sense of responsiveness, as customers can quickly receive answers to questions through a robust FAQ page.
Scalability
One person can only provide support for so many customers. Typically, as companies grow, so does their number of employees. With the self-service model, businesses can support rapid growth in customer engagement and onboarding without the need for a proportional rapid increase in their resources.
This is especially beneficial for companies that may experience a fluctuation in demand throughout the year. The self-service model is easily scalable without compromising on the quality of the customers’ experience.
Efficiency
The self-service model can eliminate a lot of manual processes, and in turn, lower the opportunities for human error. As well, processes and transactions can be done quicker and simultaneously, without the need for customers to wait in line. This in turn frees up employees to focus on more complex tasks and requests. Companies are able to run smoother, improve the customer experience, and maximize productivity.
Low Overhead Costs
Companies can significantly lower their overhead costs by implementing a self-service model. Without the need for employees to handle all incoming customers’ needs, this reduces the need for a large employee workforce. Companies just starting will have a lower starting cost, as they won’t need to build out a large team.
As well, companies who are switching to this model could scale back their customer support and sales teams. Businesses can then allocate their resources more effectively, and focus on areas of their company, such as marketing or development.
Disadvantage of this Model
Less Personalized Experience
One of the main obstacles that the self-service model faces is the fact it’s technology interaction-based instead of human interaction-based. Some customers may prefer to have a more hands-on approach and like individualized support from an agent. Technology may not be able to capture more complex requests and activities.
This will produce issues for customers who need products or services tailored to their situation. Balancing automation and a personalized experience can be difficult when considering the self-service model.
Technical Issues
Ideally, the self-service model would be able to run smoothly without the interference of humans. However, that is rarely the case. There will always be a need to maintain and update the self-service platforms. Businesses will need to make sure their technology stays up-to-date and efficient with their needs.
System downtimes, glitches, and other technical issues can cause a lot of frustration for customers. Technical support should be easily available to customers to ensure any problems that arise can be taken care of quickly.
Quality of Service
Compromising on the quality of service provided is usually never a good idea. If customers are consistently having difficulty navigating the self-service platform or not finding the necessary tools to fix their issues, this can decrease a user’s confidence in a company.
If the quality of service drops low enough, this can damage a company’s image. Self-service businesses will want to make sure they are incorporating feedback into their service model to make sure they are meeting customer’s needs. It also shouldn’t be difficult for customers to receive support from staff when needed.
Conclusion
The self-service business model provides a compelling way to provide more independence and convenience for customers to interact with a company. Like any modern business model, companies should continue to stay adaptable to ongoing changes in technology and customer preferences.
Also read:
The SaaS Company Business Model Explained
5 Internet-based Business Models and How they Work
The Low Touch Business Model Explained
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