The Automation Paradox – Efficiency vs (Customer) Experience

How do you build a unicorn platform business that scales massively without overhead? One way is to use a Software as a Service (SaaS) model. But perhaps this acronym needs to be renamed to SaaSS – or Service as a SELF Service, because in order to scale, these platforms need to involve as little human interaction as possible. 

Technology helps. Advances in Machine Learning and Artificial Intelligence (AI) have been applied to Chat-Bots and on-boarding messaging flows and advertising is largely driven by algorithms that use behaviour and data to manage targeting. On-boarding is being made smoother using block-chain based ID authentication and even facial recognition.

But has the pursuit of efficiency and returns for VC investors pushed these services to a point where they lose sight of the customer? If they are just another piece of software, how does a company differentiate itself – other than the network effect?

If you are going to take human interaction out of the customer experience, then your customer journey needs to be very good.

A great example of companies that are doing this well are the Neobanks the Fin-tech companies that are making traditional banks look more antiquated each day.

Compare the journey of trying to open a business bank account with a high-street retail bank and one of the new app-based challengers. Paper application forms, interviews, credit checks, multiple forms of original ID linked to physical address versus… downloading an app, uploading a photo of ID, taking a selfie and letting the APIs do the rest of the work.

For most people, these processes work. But what about the edge cases? How do you help and support the people who the algorithm just doesn’t get?

CX as a Differentiator

Some say that Millennial shoppers make buying decisions based on experiences – but it’s also emerging that B2B customers are demanding the same levels of experience as they expect from consumer sites they use.

So SaaS platforms like Ecommerce Solutions and Email Service Providers (ESP), that are ‘same-same’ when it comes to features need to stand out in other ways. One of the ways to do that is through amazing UX and the other way is support – taking the Self out of Software as a Self Service.

You can learn a lot about a company’s attitude to customers through it’s help section.

Does it work like an IKEA checkout and force you into a labyrinth of FAQ documents designed to keep the customer away from a human being at all costs? Does it offer chat, but only as an automated search box for the same bank of FAQ pages? Is there an email form that will go into some ticket system queue? Is there a way to speak to a human being?

What Customer Experience Types are responsible for client facing interactions? Are they Customer Champions – willing to bend the company rules using common sense and empathy or are they engineering types who turn up their noses because you don’t know the difference between 5xx and 4xx bounce rates?

Fanatical Support

A few years back, before SaaSS was a thing and hosting companies competed in a commodity market, Rackspace used a marketing strategy which set them apart from the other hosting companies based on Fanatical Support. It’s even a registered trade-mark.

Rather than trying to avoid customer problems and hassles and friction and thus reducing headcount and thus hitting some investor target, companies like Rackspace have made it their mission to help customers – in some cases pre-empting problems and making recommendations for improvement – not up-selling to a higher plan, but providing support.

Compare that to companies like Shopify or Klaviyo where the desire for efficiency is so high, that support interactions cause brand damage to the point of churning customers.

How Not to do Onboarding – Klaviyo Case Study

Imagine, spending a LOT on marketing, to influence someone to switch from one email service provider to another, only to have the new account suspended and subject to a 14 question email survey about best practices. Its harder to start sending emails through Klaviyo than sending money through a bank!

Add to that the language of the email questionnaire that says (paraphrasing) – “Even though we can’t provide the service you signed up for, due to our process, we will bill you anyway.“

And while the account is on hold, start the ‘Welcome Series’ of automated emails that extol the virtues of the platform – that you can’t use.

This is from an email company that really should know better. How could this experience be improved? It’s hard to know how much of an edge case these account verification questionnaires are, here are some ideas for the Product Team.

• Use a form or a bot to collect information. Writing a long-form email response to 14 questions is not something that says ‘Welcome, we are making this as easy as possible to resolve.” It’s not efficient. Someone has to read the answers. At least, let’s hope they read the answers.
• Use available information. The questionnaire asks for company name and address (both of which are part of the account setup!) These are also publicly available through APIs used by said Neobanks to give company banks accounts! The survey asks for information like ‘What is the company domain?’ and ‘Date of registration‘ – also already entered in the account section of the platform and publicly available through numerous Whois feeds.
• Follow your own best practice. Change the rule for On-boarding Welcome Series emails to include the case where the account is on hold. Don’t send fluffy ‘Hey did you know you can…’ messages to someone who is being told they need to explain whether, in the past, they treated “hard (5xx) and soft (4xx) bounces differently?“
• Have a bit of empathy. How hard is it to change the messaging to say: ‘
  • We are really glad that you trust us to meet our value proposition to you and that you chose use from a long list of competitors – some who are better than us, but because of a personal recommendation you decided to give us a go. And we would love to help you meet your business goals, but one of our risk people has written a policy in such a way that you got caught in an algorithmic net and we understand that is a massive inconvenience to you – so until we get it sorted out, we won’t bill you. ” (Okay – a decent marketing copywriter can make that a bit punchier – but that’s the sentiment you should be going for).

The ‘Expert’ Model of Support

While less efficient, the managed service model is preferred by companies who are based in markets where ‘Self service’ is not even in place at gas stations.

In the absence of a managed service and support from SaaSS platforms, a marketplace has emerged for experts to provide 3rd party expertise for some of these solutions. This is especially so in emerging markets where digital literacy or savvyness is not at the same level as San Francisco or London.

There are obviously pros and cons with providing support through partners.

For the consumer, it’s more expensive, because the experts – even if they are working through a gig economy platform like Fiverr – are not providing support for free.

It can also be more time consuming. If the partner has to go to the vendor and get support as a partner, then a lot of time can be wasted, especially if the vendor does not provide support outside of an US time-zone.

Platform businesses are usually built on a commercial model that is predicated on returns to investors rather than being customer-centric. This is especially true for platforms that have a ‘walled-garden’ approach and try to increase switching costs.

But for SaaS companies that are in areas where there is a lot of competition, efficiency may have to be traded for a better customer experience. Let’s see what the market decides.