February 2001

BY LYN GUBSER, SIDEWARE

GartnerGroup research tells us that it costs up to 10 times more to recapture a customer relationship than to maintain an existing one. We also know that customer service increases the lifetime value of a customer by escalating future sales through repeat visits. Just as with their brick-and-mortar counterparts, it is imperative that e-businesses treat their customers right, or they will go away, and they're not likely to come back.

Conventional brick-and-mortar businesses rely on live customer service representatives (CSRs) as well as technical support and help-desk personnel to serve as primary contacts for their customers. Retail stores such as Nordstrom's have actually built their businesses on the strategy of championing customer service to acquire unparalleled customer loyalty. But how can an online business ever attain Nordstrom's level of customer satisfaction, repeat business and long-term customer profitability?

According to Forrester Research, the only e-businesses that are thriving are those that provide quality online customer care. So what do successful customer-oriented e-businesses look like? They are businesses constantly searching for ways to achieve higher customer satisfaction and retention, higher revenues per customer and lower costs for acquiring and servicing customers. In short, they are building customer loyalty while at the same time lowering labor costs by increasing the efficiency of their CSRs. The most successful customer-oriented e-businesses are using the full range of electronic customer relationship management (eCRM) solutions to provide immediate communications and live customer care at every customer touchpoint.

Technologies that provide online customer service include intelligent e-mail, live collaborative chat, self-help, telephony, VoIP, personalization and knowledge management solutions. Let's look at each of these and see how they improve online service and thereby promote customer loyalty.

E-mail
For more than 70 percent of online businesses, e-mail remains the only means of online customer contact. The volume of mail, however, can be a killer. Presently, nearly half of all e-mail responses from online businesses arrive at least a week late. Many Web sites are so inundated with e-mail that they no longer even post a customer service e-mail address. But the situation is changing as artificial intelligence is being applied to CRM. Today, simple and frequent questions can be answered by computer without the customer ever knowing that the message was computer-generated. So indistinguishable are some computer-generated messages that they've created a new problem: unnecessary customer thank-you messages that can clog an e-mail system!

Collaborative Chat
Do you have a question about a product? Finding it difficult to understand a payment plan? Can't figure out exactly when an item will be shipped? Click on a live customer service icon and up pops a chat box with a cheerful "Hi! How may I help you today?" If you've shopped on that Web site before, and you registered your user name when logging on, you may even be addressed by name. The CSR with whom you are chatting should have access to all databases and legacy systems that contain your customer history, enabling such a response as, "Hi, Mrs. Smith. My name is Ann. It's nice to see you once again shopping on our Web site. How did the stereo work out that you purchased last month for your daughter's birthday? I hope it was all you expected. How may I help you today?"

Now that is customer service. It's customer care that has not been seen since the bygone days of the small town shopkeeper! Yet there are systems that can link front-office solutions, including live chat, to back-office databases and legacy systems, enabling CSRs to tap into a customer's purchasing history, personal preferences, registered complaints or problems or any other information the business possesses regarding a particular customer. Knowing this information, the CSR can suggest new products or accessories, provide valued-customer incentives, or otherwise cross-sell and upsell to maximize revenue while enhancing customer loyalty. The CSR can push to the online customer Web pages that feature items of probable interest to the customer, or purchase forms that can be completed online, help a customer compose a request for technical support, or any number of other personal services. Such customer care can only build loyalty between the online business and the satisfied customer.

Self-Help
Self-assistance has moved well beyond the days when frequently asked questions (FAQs) were the only customer care available on an e-business site. Today, self-help includes everything from intelligent FAQs, where expert search systems can interpret a customer question to find an answer that a key-word search might never locate, to virtual agents or "bots" that chat with customers, answer questions and make suggestions, nearly as effectively as a live person. Such bots are equipped with a learning algorithm that enables them to improve the accuracy of their responses with every customer contact they experience. If they get stumped, they courteously hand the customer off to a live agent. Depending on the e-business, virtual agents can normally handle more than half of the questions asked by online customers.

Telephony
Computer-telephony integration, or CTI, is rapidly maturing as intelligence has come to the software solutions that drive call centers. Some Web pages are now equipped with callback buttons that, when clicked, open a window in which the customer can leave a phone number where he or she can be reached for questions or other services. Depending on the Web page on which the callback button is imbedded, the request for a call can be directed to a specific CSR who is intimately familiar with the goods and services advertised on a particular Web page. The downside of this technology is that few customers have a dedicated line for their computers, so most have to get offline to receive a call. This brings up another point solution, VoIP.

VoIP
For computers equipped with a microphone and soundcard, VoIP (voice over Internet Protocol) can provide an outstanding customer care solution. Click on a VoIP icon, and a live CSR speaks directly to you through speakers or headphones. It's just like a telephone, but without the line charges. Much as with live chat, a VoIP-equipped salesperson can push Web pages to online customers to show new products or services while conversing with the customer about their various attributes. Alternatively, a CSR can talk a client through the process of filling out a form or application.

Personalization
Some say that personalization is a strategy, not a software solution. That's true if one looks at personalization as the process of linking front- and back-offices so that CSRs have immediate access to customer histories. But real personalization solutions are emerging - and because they are personal, they are controversial. Such products might mine chat text to determine a customer's personality predilections according to a Myers-Briggs type of personality inventory. Do you have a "Type A" personality and are shopping for a car online? A CSR may push you toward a red sports car, rather than the beige sedan that would have been suggested had your analyzed conversation revealed you to be a "Type C." Is that ethical? Some would say no. But many customers are willing to trade a little privacy for the convenience of not having their time wasted by an agent showing them items in which they have no interest. If the business keeps to themselves personal information about their customers and never sells it, customer trust and loyalty are both enhanced.

Knowledge Management
Think of knowledge management as the next level above self-help. Knowledge management comprises those technologies that provide customers access to critical internal and external information about a company's products and services primarily for purposes of problem resolution. Knowledge management tools include the popular "Ask Jeeves," which employs algorithms that aid in information searches, to more sophisticated and complex solutions that provide self-learning problem-resolution tools that can be used by CSRs or external customers. Self-learning algorithms greatly improve the value of knowledge management systems, but the system can only learn to the degree that customers are willing to provide useful feedback on the propriety of each response.

Many of today's eCRM vendors can help e-businesses communicate with their customers, but most have focused exclusively on front-office interaction, ignoring back-office resources where the real gold is to be found. Most application service providers (ASPs), in fact, offer only front-end solutions. But back-office technologies, especially artificial intelligence, data and text mining, data source managers and API hooks, constitute the real magic of eCRM. Without the ability to collaborate with a company's legacy systems and databases, many front-end solutions are only attractive traps for unwary e-businesses. They may look good on the surface, but they can't provide CSRs the information they need to deliver customer satisfaction and enhance customer loyalty. In the world of online customer service, the message is clear: successful e-businesses must "go for the gold."

Lyn Gubser, PhD, is executive director of research and training for Sideware of Reston, Virginia.