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Arm yourself for the e-service revolution

Who wants customers tying up the contact center with questions they can answer on their own? E-service is here, but Peppers & Rogers found that not everyone is getting it right.

Recently I spoke with a large, national retail bank about its contact-center practices, and was surprised to learn that this bank is planning to reduce its number of contact-center agents from thousands to a few hundred over the next couple of years. The reason: An increasing number of customers are switching to Web self-service for their basic banking transactions, reducing the need for service reps to handle phone inquiries.

The reason is simple. Web self-service transactions, which allow customers to perform routine tasks online, are less expensive than live interactions. The estimated average cost for deployment of self-service, according to Chicago-based research firm Doculabs, equals $1.17 per customer response, compared with the estimated average cost of a call response of $32.74. In fact, in a recent survey, Doculabs discovered that the 200 participants saw an average savings of $500,000 per quarter as a result of this transition.

So online self-service also provides the potential to make dramatic improvements in an organization's bottom line and increase agent productivity. This, coupled with a more informed, knowledge-seeking and independent consumer, will continue to drive service to the Web. But this trend will not totally automate the process. Live people are still needed.

No integration-no use

Esteban Kolsky, a research director at Gartner's CRM practice, predicts that by 2005, more than 70% of customer-service interactions for information and remote transactions will be automated. However, Kolsky says that critical incidents will arise that will mandate interaction with a live customer-service rep. The industries that are leading this online-service evolution-including financial services, retail, high-tech, manufacturing and healthcare-are preparing for such multi-channel interactions.

The new multi-channel hubs should ideally connect every communication channel and department in a particular company so that all interactions, including those from the e-channel, phone, and bricks and mortar, are funneled to one service center. Kolsky explains that if a company's e-service applications are not integrated with the back-end systems and call centers, then electronic inquiries will go unanswered and valuable customer insight will be lost. "E-service by itself cannot stand by itself," he says. "If you don't have data integration, you'll eventually have to start again from zero."

Companies should implement a solution that offers one or all of the three channels: Web self-service, e-mail and voice, rather than deploying bells and whistles, such as live chat, which is costly. Instead of static FAQ portals, which aren't very useful or dynamic, companies should opt for more compelling features, Kolsky says. Natural-language capability, a feature that provides accurate, pre-defined answers across all support channels, and solutions that guide and escalate customers' shopping experiences or routine visits, are important to the viability of a Web self-service initiative.

Allen Bonde, president and founder of e-business and CRM consultancy Allen Bonde Group in Wellesley Hills, Mass., divides the industry into four categories: 1) natural language and search vendors (Kanisa, iPhrase and inquira); 2) knowledgebase providers that offer common sets of questions (Broad Daylight, Primus and NativeMinds); 3) e-commerce vendors that provide services such as linking catalogues with pricing dialogues (EasyAsk, Endeca and Mercado); and 4) Web self-service application providers that offer navigation tools, e-mail and chat (eGain, Kana and RightNow Technologies).

Despite the deluge of vendors pushing Web-service technologies, Bonde says that only about 10% of end users' e-service sites probably receive a passing grade. A lack of natural-language capabilities and failure to integrate into the company's CRM systems make many Web self-service initiatives ineffective. Bonde adds that e-service offers the potential to enter new markets and gain customer insight. By integrating various information sources, companies provide a seamless way to escalate to other channels. "If you view self-service as part of CRM, it becomes more of a multi-channel thing," Bonde says.

Some companies have Web self-service initiatives that serve as prototypes. Kolsky and Bonde say Talbots, Alaska Airlines, the Massachusetts Department of Motor Vehicles, Kohl's, Yahoo Finance, Williams Sonoma and Office Depot provide examples of seamless service and integrated applications. Bonde says their offerings effectively handle natural language. Searches are quick and simple and the workflow is streamlined. Most importantly, these companies generally consider their Web sites to be extensions of their brands.

A shrinking marketplace

Creating a multi-channel customer interaction hub carries with it high associated costs, which is part of the reason for the slow start. This scaling back of capabilities, coupled with a need for multi-channel integration, will result in consolidation of e-service pure-play technology vendors. They will need to offer more complete solutions. As voice and wireless also evolve to offer self-service options, these vendors too will be forced to acquire or develop offerings to accommodate these emerging needs. Kolsky estimates that the 60 or so pure-play e-service vendors that currently exist will be cut by half over the next 18 months. Eventually, he says there may only be three vendors left to compete for all your e-service needs.

To read more articles like this one, visit Peppers and Rogers Group's Web site at

Copyright © 2003 Carlson Marketing Group, Inc. All rights reserved. Peppers & Rogers Group is a Carlson Marketing Group Company.

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