In focus: High-tech, high risks

By  Vero Insurance

Could sacrificing the human element spell disaster for SMEs?

As technology continues to change the way small businesses interact with customers, we’re in very real danger of losing the human connection. So what does this mean for Australian SMEs, and how can they combat the inherent risks?

From automated customer service calls to do-it-yourself supermarket checkouts, technology is rapidly reducing the human element in many of our daily activities. The benefits to Australia’s small business sector are expected to be huge, with PwC estimating SMEs could unlock nearly $50 billion by embracing mobile and digital platforms over the next 10 years.

But warnings that nearly half of Australian jobs are at risk of automation or computerisation have fuelled concerns over the marginalisation of many workers, along with the consequences of ‘dehumanising’ business relationships with customers. So how can SMEs take advantage of technology’s benefits without losing the human touch?

The high-tech push

The future of automation has already arrived in Australia. Businesses across the nation are seizing the time and labour-saving benefits, with the likes of automated customer support being lauded for its ability to provide 24/7 support while handling customer queries expeditiously.

Social media automation has also surged in popularity, thanks to tools like Buffer and Hootsuite, which analyse how businesses are discussed on social platforms and can schedule, synchronise and post content. Even simpler, cashless payment applications are making redundant not only physical wallets and currencies, but the need for customer interaction.

For small businesses, taking advantage of these changes has tapped into a perceived desire – particularly when it comes to the millennial demographic – for a more digital experience, along with the potential to cut costs and promote customer loyalty. But is more interaction with digital processes really what today’s customers want?

Is this the end of the human connection?

The answer appears to be a resounding no. Accenture’s research into customer perceptions of the digital disconnect found 73 per cent of those surveyed would rather talk with a human being than a digital alternative when seeking advice or a solution to an issue.

The source of this discontent appears to be prior negative experiences with automated customer service technology that has failed to meet expectations. The survey found that 64 per cent had changed one of their service providers in the previous 12 months due to poor customer service, in most cases due to inconvenient automated systems.

Automation and artificial intelligence are yet to surpass an employee’s ability to judge and react to complex situations, especially those manning a help desk or call centre. Yet the breadth of the high-tech revolution spans far beyond automated help desks, and it appears consumers are more receptive to digital systems in situations requiring a less tailored approach.

In the food service industry, for example, the Wall Street Journal reports consumer preference is a key driver behind the adoption of touchscreen ordering systems, which are increasingly replacing wait staff.

“Research shows that many appreciate the speed, order accuracy and convenience of touchscreens, particularly among millennials who already do so much on smartphones and tablets,” says Andy Puzder, CEO of CKE Restaurant Holdings.

Nevertheless, Puzder admits the technology has its drawbacks: “Some guests find it impersonal or confusing. Customer service is still very important and, for now, having access to a person is important to ensure smooth experiences for everyone.”

Finding the middle ground

Humans are naturally resistant to change. This resistance is often rational, as appears to be the case with the mixed consumer response to the rapid adoption of digital customer service innovations.

It is, however, undeniable that these solutions offer consumers an array of benefits, often depending on context. As labour costs become increasingly expensive and technology becomes more affordable, there is an opportunity for significant cost savings to be passed on to consumers.

Ken Burgin, whose Profitable Hospitality consultancy advises restaurants and catering groups, sees the technology being utilised most effectively in supporting staff to provide a superior level of customer service, rather than acting as a labour substitute.

“There are three things everyone wants: good, cheap and fast. Traditionally, customers have had to compromise on at least one,” Burgin says. “But thanks to emerging technologies like iPad POS systems, more efficient payment processes and online ordering, you can now get pretty good quality at a reasonable price, and quickly.

“Adding the smile and warmth of service has always been important, and will continue to be a central part of customer service, but by getting rid of some of the drudgery, businesses and staff can focus on giving customers a wonderful time.”

Generational familiarity

Research conducted by the National Restaurant Association found millennials were far more receptive to technology playing an integral role in dining experiences. In some cases, it was even requested.

But while younger users may be comfortable with new technologies, Burgin believes the potential benefits of their utilisation can be universally enjoyed. “It is very much a generational thing. Younger generations wonder what the big deal is, whereas my generation, baby boomers, may wonder why it’s necessary.

“However, speed is something everyone wants: faster service, less waiting, and more efficient ordering and payment processes. I think these processes will keep getting better.”

While the digital solutions currently on offer may not be ready to go it alone without human supervision and supplement, at least not until consumers become more familiar with digital service, what is clear is that small businesses cannot afford to be left behind.

For SMEs, the key is to supplement human connection with technology to provide a better consumer experience. As stated by ActiveCampaign chief executive Jason VandeBoom: “Automation isn’t trying to replace human touch points, but it should be used to qualify, highlight, or progress someone to the right points where human touch is essential.”

The message for Australia’s SMEs appears to be loud and clear: take advantage of automation and computerisation, but never lose sight of the benefits of the human element. People, after all, still enjoy engaging with people, and that is unlikely to ever change.