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Customer Relationship Management
March 2002

Self-Service: The Secret To Champagne Customer Service On A Beer Budget

By Christine J. Holley, Interactive Intelligence, Inc.

'By 2005, more than 70 percent of customer service interaction for information and remote transactions will be automated.'

-- GartnerGroup, Gartner Symposium/ITxpo 2001, Oct. 8, 2001

In a world where products are ubiquitous, excellent customer service has become the distinguishing factor among competing companies. Of all the technologies designed to enhance customer service, self-service technologies are at the top of the list. Self-service technologies such as interactive voice response, fax-on-demand and e-mail response management services promise reduced costs and increased efficiencies. Perhaps most important, they also promise increased customer loyalty due to added convenience. Considering the average business has lost more than half of its customers during the past five years, resulting in earnings that are nearly 100 percent lower than what could have been achieved with a five-percent improvement in customer retention, self-service technologies are like the Song of the Sirens from The Odyssey ' fraught with some dangers but incredibly tough to pass up.

These dangers, like the danger of any technology, have to do with a lack of foresight and poor application. How many times have you been stuck in IVR hell ' wading through mile-long menus to access your account balance only to discover that it's incorrect but you can't access a live agent to find out why? Have you ever been surfing on a Web site that offers an interactive 'frequently asked questions' option? You enter your question and are rewarded with a completely irrelevant response. No customer would consider these options a convenience and customer loyalty is sure to suffer.

For a company to enjoy the benefits of self-service technologies, it must carefully answer the following questions:

  • What are the business objectives?
  • What type of self-service technology best suits these objectives?
  • What process best supports these objectives?

To ignore these questions is the business corollary of ignoring the dangers of the Song of the Sirens: a loss of customers, profit and, ultimately, the downfall of the company.

The Business Objectives
Before cost can be used as a measurement of self-service, business objectives and client needs must first be addressed. Companies should not assume that all clients are ready, willing or even able to use self-service options. It's a good idea to survey clients first and find out if, for instance, they have e-mail or Web access and if they would use it to supplement direct service options.

Certain verticals are structured such that their business objectives are more likely to be supported by a self-service initiative than others. For instance, the financial sector is a prime industry for self-service technologies, as customers increasingly take a hands-on approach to financial management and monitoring. Retailing is perhaps the most mature industry when it comes to self-service, especially Web-based options, as they have the advantage of decades of experience selling online through shops, catalogs and contact centers. Keep in mind that 'e-tailers' are perhaps the best candidates for these technologies because customers desire convenience from online vendors above all things ' including discounts.

Insurance and government are fast catching up in their adoption of self-service technologies, particularly government, spurred by public pressure to increase efficiencies and improve customer service.

All companies, regardless of their vertical market, must also ask if their products or services are conducive to being delivered using a particular self-service channel. For example, companies will likely find that a product or service that is very personalized or requires sensitive information to process might not be best delivered via the Web.

An often overlooked question is how much value is associated with interactions on a particular channel. In general, return-on-investment is higher on sell-side transactions where self-service options replace order-taking models that are labor-intensive, such as call center and fax transcription, or where they promise to streamline interactions between sales representatives and customers, such as product configurations.

Many companies take a phased-in approach to self-service deployments by making these options available for certain transactions only or sometimes by rolling them out internally as services for employees, partners, distributors and suppliers. This can be useful as it enables companies to more easily measure return on investment and also address any issues, such as poor IVR interfaces, before they become problems on a grand scale.

In addition to measuring monetary savings, companies must also factor in the cost of poor service. Lowering the cost of service delivery is certainly important, but without considering the effects of bad service, a complete cost savings picture will never emerge.

Finally, there does exist an irony about self-service technologies that takes many companies by surprise. While a primary goal of self-service is to reduce the need for live agent intervention, as customers have access to more information through self-service options, they are also more likely to need direct assistance. So, while the cost savings of self-service technologies are real, companies should be mindful of the demand it tends to create for agent services.

The Technology
By first identifying the business objectives, companies will find it easier to determine the right self-service technologies. To ensure a successful deployment, however, several technical issues must be addressed.

The importance of any technology's underlying architecture cannot be overstated. This is especially true with self-service technologies because they offer touch points throughout the customer lifecycle and are a critical component of a company's overall customer relationship management strategy. If the self-service technology does not integrate well with existing systems and if it cannot function across communication channels, a company is likely to spend far too much money and time on deployment, maintenance and customization.

Primary architectural considerations include the following: Is the system open or proprietary? Is it hardware- or software-based? Does it function across communication channels? Does it offer a growth path to more sophisticated self-service features? In general, an open, software-based system that offers a central 'engine' for interaction processing offers the most flexible architecture and one that will protect a company's technology investment into the future.

Another critical decision a company must make is whether to purchase a suite or best-of-breed self-service solution. While, in the past, the best-of-breed approach was favored for providing companies with the widest selection of applications, suite solutions have matured and increasingly rival best-of-breed solutions with a comprehensive set of applications and the added benefit of reduced integration.

Companies should be vigilant, however. Although 'suite' implies a tightly integrated set of applications offered by a single vendor, this is often not the case. Many vendors offering a 'suite' solution are actually selling a package of products from different vendors resulting from acquisitions or partnerships. Be sure to ask the vendor about the product's architecture ' exactly where the applications come from and how tightly they are integrated. If it turns out to be a multivendor, multiproduct solution, it's likely to require a longer implementation period, increased maintenance and administration and reduced ease-of-customization.

Aside from architecture, self-service features are, of course, paramount to a successful deployment. Be sure the vendor offers integrated, scalable applications that include not only self-service features like ERMS and IVR with speech recognition, but also features such as Internet text chat, voice-over-IP and collaborative tools such as co-browsing. If not, a company will be forced to take a 'point' solutions approach when incorporating other CRM applications into its overall customer service strategy, thus significantly increasing cost and complexity. In addition, based on the trend of consolidation among the e-service industry, those vendors taking a suite approach instead of a components approach are most likely to survive the shake-out.

When evaluating features, companies should also determine the level of staffing expertise required to use them. Some ERMS vendors, for instance, offer products based on advanced artificial intelligence and linguistic techniques instead of case-based reasoning so companies need not hire a dedicated knowledge engineer to maintain the system. Self-service technologies can also affect staffing quotas, so understanding this in advance is critical to a successful implementation.

The Process
Often overlooked in lieu of the technology itself, a self-service strategy is only as good as the process that defines it. Companies must define a consistent set of business rules for customer interactions ' both direct and self-service ' across integrated channels and throughout the customer life cycle. These business rules should be based on the customer's desire for simplicity, speed, convenience, reliability and accuracy.

One way for a company to accomplish this is to think of self-service initiatives as proactive processes rather than reactive ones. A good example of this is offering customers short online or telephony-based surveys as part of the self-service option. These surveys can be used to gather feedback from customers about how to improve service and can even be set up to automatically transfer the customer to a live agent should a score on a particular survey fall below a predetermined level.

The value of human intervention cannot be overstated as part of a proactive self-service strategy. In addition to keeping IVR menus short and simple, companies should always offer an exit path to a live person ' also called 'barge-in' capability ' that doesn't require the customer to hang up. Likewise, companies should ensure that when using ERMS, customers have the ability to escalate issues to a live agent. Human contact is especially important if a company's self-service strategy spans the customer buying process where high-ticket items are offered. Giving customers easy access to live help adds the elements of personalization and trustworthiness to those of simplicity, speed, convenience, reliability and accuracy. Combined, customer loyalty is cemented and companies receive an important value-added benefit.

A discussion of the business process is incomplete without raising the issue of outsourcing. Outsourcing a company's self-service initiative offers the benefits of increased ramp-up time, reduced overhead and the elimination of maintenance issues. It also brings with it potential problems, not the least of which is decreased control over staff and information.

When outsourcing ERMS, companies can mitigate possible negative side-effects by working closely with the outsourcer to develop a good knowledge base. Outsourcers should carefully review the company's product literature, ask employees what they typically tell customers and find out what questions they most frequently hear. Companies should also set up an automated process to regularly update this information so outsourcers can provide the most accurate information possible.

In addition to a good analysis of the outsourcer's self-service technology, it is increasingly common for outsourcers to offer a 'lease-to-own' option, providing companies with the flexibility to bring the self-service function in-house when they're ready.

The Last Word: Planning For Crisis
While it might not be part of the business objective, self-service initiatives can also be viewed as a way to safeguard companies during times of crisis. By providing customers, employees, partners and other constituents with access to information anywhere and anytime, a company's self-service strategy can be considered a valuable part of its disaster recovery plan.

Whatever a company's objectives, the goal of self-service technology remains the same: to leverage current resources and improve quality of service while reducing costs through efficiency. With a little foresight and proper application, self-service technologies can fulfill this goal without incurring the wrath of the Sirens ' and that's no myth.

Christine J. Holley is the market communications director for Interactive Intelligence Inc. (www.inin.com), a communications software company headquartered in Indianapolis. She has worked in the IT industry since 1994 and began freelance writing in 1992. She has been published in numerous trade, business and academic periodicals.

[ Return To The March 2002 Table Of Contents ]

CRM Without Breaking The Bank

By Jill Scannell, eStrategy3, LLC

Configuring a successful CRM integration requires companies to revert back to the principles of Call Center 101; defining key business processes and procedures, remaining disciplined in following those processes, implementing good training and adding in a dose of good old-fashioned direct marketing. In the past few years it became apparent that call centers were emerging as a logical focal point for customer interaction ' the function of the call center shifted from simple order-taking to more complex customer interactions. Primarily due to the growth of the Internet and its interactive, cost-effective potential, call centers are now customer touch points of interaction. This transformed what were once isolated sales or customer service channels into strategic, corporate assets. The challenge is to use the capabilities that exist for increased productivity, efficiencies and a one-to-one customer approach, all without 'breaking the bank.'

Today, traditional call center applications such as integrated voice response (IVR), skills-based routing and computer-telephony integration (CTI) require consideration, but ingredients such as e-mail, online ordering, self-help and chat must be considered as well. As technology advanced, it affected how companies interacted with their customers and the industry was forced into a transformation. Today, customers expect more and want it for less. As companies are faced with the dilemma of differentiation for 'like' products or services, they have no choice but to develop integrated communication strategies just to survive. However, in a study conducted by Celent Communications (on behalf of Microsoft and Onyx), it was discovered that of the top 150 financial firms, only 44 percent of the firms respond to inquiries placed online by potential customers, and of that group, only 24 percent provided acceptable responses.1 Furthermore, it was estimated that those same institutions spent over $500 million on CRM technologies in 2000. It seems obvious that a less expensive approach is required; one that focuses on training, process, procedure and discipline.

Industry experts agree that a customer's full potential cannot be completely reached until individual needs and preferences are recognized at a one-to-one level. A 1999 study of over 100 companies, conducted by ProSci, noted that the most frequently cited attribute of a world-class contact center was the seamless management of multiple media types in an integrated environment, and this remains true today.2 Second, the ability to customize and personalize the marketing message based on specific, in-depth knowledge of the individual was cited as a key attribute. This requires the ability to offer a customer e-mail, Internet self-help, chat, online ordering, voice response or a live operator in a seamless, integrated fashion. According to a statistic by JC Penney, customers who shop across all channels, including phone, Web and catalog, purchase at a rate eight times higher than that of a single-channel customer.3 The importance of data integration cannot be disputed.

If the benefits of consolidating and linking islands of customer information and interaction appear to be common-sense, then why are 57 percent of the companies using an ROI calculation to justify their CRM investment unable to justify the expense?4 The root cause is that many companies lack defined training, process and procedures to measure the impact of first-call resolution, customer satisfaction and the ease of round-the-clock access, let alone the effect retention and loyalty would have on their bottom line. Often merely fighting fires, call center management has consistently done a poor job of making the capture and analysis of information a priority, even information available prior to the onset of new avenues for customer interaction.

Admittedly, database and technology integration are complicated and involve lengthy lead times and dozens of vendors that must interact with almost every department in the company. The estimated cost to integrate all customer touch points of interaction can range from $63 million to a staggering $129 million over a three-year period, yet CRM vendors and integrators are growing at a phenomenal rate, and all during an economic downturn.5 Over time, it has become evident that technology and cost are not the barriers to implementation, but a lack of leadership and discipline on the part of end user companies to analyze and apply processes behind these systems.

Technology should not be deployed for the sake of technology itself, but the decision to deploy it should be based on the simple premise that it will facilitate customer relationships. It is important to remember that technology is a means to an end, not the end itself, and if this basic principle is met, both revenue and retention will increase. Companies must have the discipline to train the front line, analyze the data and apply the findings for CRM to be a success.

CRM is founded on two major principles: to deliver a personal, individual message to the recipient and to offer seamless access anywhere, anytime. By using a phased CRM approach, in many cases with technologies that exists in the center today or that can be deployed inexpensively and quickly, a company can target potential customers using niche marketing, affinity programs or target marketing (to name a few) and address the first principle of CRM. Positive results will require corporate commitment and discipline, training for front line employees, analysis and data application. The added benefit to this approach is that it presents the opportunity to obtain financial data related to the impact CRM can deliver and begins the cultural shift for integration across other corporate databases and systems.

1 Celent Communications Benchmarking Study. 'Institutions Bank on Information Technology;' Craig A. Shutt; May, 2001.

2 ProSci Benchmarking Report. ProSci; Loveland, CO; pp 22-23; 1999.

3 JC Penney statistic. 'Sticker Shock. Pay up or lose: An in-depth look at the soaring costs of electronic customer relationship management;' Operations & Fulfillment; Richard Sawyer; June 1, 2001.

4 ROI calculation. 'Sticker Shock. Pay up or lose: An in-depth look at the soaring costs of electronic customer relationship management;' Operations & Fulfillment; Richard Sawyer; June 1, 2001.

5 Cost to Implement CRM. 'Sticker Shock. Pay up or lose: An in-depth look at the soaring costs of electronic customer relationship management;' Operations & Fulfillment; Richard Sawyer; June 1, 2001.

Jill Scannell is a principal at eStrategy3, LLC (www.estrategy3.com).

[ Return To The March 2002 Table Of Contents ]

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