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Jury remains out on effectiveness of self-service apps

Based on projected cost savings, self-service applications would seem like a no brainer. But analysts say you may be in for more than you bargained for.

The concept behind self-service is simple: Lower the cost of providing customer service by offering your customers tools and information so they can help themselves online or use applications such as automated voice systems. The challenge is in the execution.

There seems to be a wide-range of opinion on just how effective customer self-service applications can be. While they can substantially lower overhead, some argue that if implemented incorrectly they can also sacrifice service and create even bigger business headaches -- not to mention expenses.

Forrester Research concluded that a typical Web-based customer service interaction costs a company a meager $1.17. By contrast, an average phone interaction costs $33 per call, including the expense of employing the person that answers the phone. The average cost of settling customer issues via e-mail is $9.99, also attributed largely to the human element involved.

Gartner highlights the same point with slightly different numbers -- $6 to$7 per phone call versus roughly 20 cents for each self-service customer transaction on the Web.

Based on these results, building self-servicing functionality would seem an obvious answer. That's where the experts disagree.

"The revolution is in letting the customers serve themselves rather than wait on hold for a long time," said Esteban Kolsky, senior analyst at Gartner, Stamford, Conn. "It's not about cost savings. It's about giving customers what they want. Ultimately there can be a cost savings, but that's not the goal of self-services."

Kolsky called it a "misconception" that call centers will drop in activity after self-service applications are implemented. Most organizations that implement self-service don't do a good job, he said, and that drives customers right back to the phones.

Kolsky even feels that deploying self-services can raise costs and turn-off customers if a business doesn't execute a practical strategy in deploying applications.

Other analysts agree.

"If not done right [self-services] can actually do more damage than good," said Kelly Spang, senior analyst with researcher Current Analysis, Sterling, Va. She cautioned that not every customer is equipped to work on the Web and some people simply don't like to do so.

Spang believes another weak point of existing self-services are companies' failure to build systems where customers have multiple options if they are having trouble helping themselves.

She recommended a link between a call center and the self-service applications. "There has to be a path for escalation if the problem isn't being solved," she said.

Ronni Marshak, senior vice president and principal consultant at researchers Patricia Seybold Group, Boston, offered up some practical advice to businesses.

"My advice to any business is to always have an 800 number available that's easy to find. When [a customer] clicks 'contact us' it should offer both the e-mail and the phone number."

The analysts had some other tips, too:

  • Poll customers before designing self-service to determine need
  • FAQs should include in-depth Q&As, not just the basics
  • Information must be laid out clearly and interfaces should be simple
  • Have a system of escalation to address problems that cannot be solved

The experts agree that self-service applications will become more prevalent going forward and said they would not be surprised to see enterprise CRM providers like Siebel Systems Inc., San Mateo, Calif., make acquisitions in the arena. Companies named as possible buyouts include Syntellect Inc., Phoenix, and Witness Systems Inc., Roswell, Ga.


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