Why humans are so important in digital business

Ten years ago, my friend Martin and I were in the midst of finalizing our master’s thesis (yes, in Sweden we write them in pairs!) on the topic “the electronic customer relationship”. In hindsight, a better term would probably have been “the digital customer relationship”. Anyhow, we realized that digitalization is transforming business, and hence the customer relationship. So, with more curiosity and ambition than knowledge and research skills, we set out to explore electronic, or digital, customer relationships. With limited time and resources, we decided to embark on a theoretical adventure into the literature on everything from relationship marketing to online marketing to eCRM to database marketing.

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I remember that our thesis became a bit messy with all the literature, but also how we came to an important conclusion that I still believe holds true. Namely, that despite the continuous development and refinement of technology, the power of human interaction should not be underestimated. Today, ten years later, I am more convinced than ever that there is no substitute for direct interaction between a customer and a human service employee. Maybe now you think, but hey, we have smart services and intelligent systems and everything, which customers interact with daily, and it works just fine.

And here is the crux of the matter: When a customer interacts with a computer or system instead of a human, through the Internet or some other way, the service experience tends to be “just fine”, or maybe “not that fine”. The experience of human-computer interaction is almost never completely terrible or remarkably wonderful. Interaction between humans, on the other hand, can often be an amazing, or horrible, experience. I would go as far as suggesting that human interaction has the potential to completely make or break a service more than anything else.

For example, in my PhD study on customer perceived value in retail banking services (Medberg, 2016) it became clear that my informants’ worst retail banking experiences always took place during interaction with retail banking staff. Similarly, my informants’ best retail banking experiences were also always the result of close interaction with staff at the bank, such as a clerk, financial advisor, or customer service representative. In between these very good and very bad banking experiences, there were numerous of half-good and half-bad experiences related to online banking, ATM machines, mobile banking applications, and other systems of varying intelligence.

In discussions about customer (dis-)satisfaction with research colleagues and professionals, many tell me they have observed the same thing in their own studies or business practice. That is, what makes customers really angry or happy is almost always another human, not an online bank or a smartphone app, or some other non-human system. In fact, I believe the more “digital” a business is, the more of a force multiplier – in a positive or negative direction – humans are. 

Consider the case of Zappos, one of the most successful online retailers in the U.S. The CEO of Zappos, Tony Hsieh, claims the key to the success of this online business is its carefully recruited and well-trained call-center employees:

‘‘At Zappos we don’t hold reps accountable for call times. And we don’t upsell—a practice that usually just annoys customers. We care only whether the rep goes above and beyond for every customer. We don’t have scripts, because we want our reps to let their true personalities shine during every phone call … There is a lot of buzz these days about social media and ‘integration marketing’. Our belief is that as unsexy and low-tech as it may sound, the telephone is one of the best branding devices out there’’ (Hsieh, 2010, p. 3).

Because of complex things such as personalities, moods, emotions, empathy and compassion, or lack thereof, all human interaction – face-to-face or over phone – always has the potential of being amazing or horrible. As stated previously, human-computer interaction rarely evokes such strong feelings in service encounters. In a digital age, it is therefore critical for businesses to take full advantage of the benefits human interaction offers, and avoid its possible detriments. Human interaction is something extremely powerful that no smart business should forget about, or leave to chance, as customer relationships become more digitalized.

 

Gustav Medberg
Postdoctoral Researcher

 

References

Medberg, G. (2016), How Do Customers Perceive Value-In-Use? Empirical Insights from Bank Service Stories. Helsinki: Hanken School of Economics.

Hsieh, T. (2010), “Zappo’s CEO on Going to Extremes for Customers”, Harvard Business Review, July-August, pp. 1–5.