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Why Web Self-Service is a True Win-Win
Web self-service is described as the third wave of the Internet revolution, and promises to be effective both in paring down costs and boosting customer relations. The problem is, it's still in its infancy--and carries the risk of alienating customers if it's badly done.
Posted Jun 2, 2000
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It may seem like a paradox. By shifting some employee-delivered services to customer self-service, companies can generate substantial savings while increasing customer satisfaction. From the company's point of view, self-service operations allow reductions in the personnel and overhead of running a call center. From the customer's point of view, there is a greater sense of feeling in control.

Talk about win-win propositions! " Because it offers unprecedented ways to keep customers coming back, the Web is beginning to transform customer service from a labor-intensive, expensive post-sales operation into a strategic initiative, on which your company's future profits depend," says Jay Wood, president and CEO of Silknet Software.

Center of Gravity
A similar view of the significance of Web-based service is posited in a recent report from the Aberdeen Group. "Because customer management has rightly become a critical part of business strategy, service-enabling the Web--and integrating it with existing service and communications channels--is fast becoming an important part of customer management."

It's all part of the movement toward becoming "customer-centric." The problem with conventional call centers is that they are generally "company-centric," with the focus on response time rather than on problem resolution. Call center workers have target times for processing calls, as anyone who has ever needed more than two numbers from directory service can testify. It may make sense from a management cost-control point of view, but it is not exactly customer-friendly to make someone call again for a third inquiry.

Most Web self-service systems vendors talk enthusiastically about being "customer-centric". Whether their products are testament to these intentions is another matter, but they do have a grasp on what the future differentiators of business will be. Graeme Pitts-Drake, general manager of one such vendor, Servicesoft U.K., says: "You have to be customer-centric or people won't use it. But one of the biggest challenges is getting yourself into the mind of the customer."

Terry Wilcox, managing director of Silknet Europe, argues that the next wave of efficiency in business is not going to come from inside organizations, but from outside, in the shape of customer input. According to Wilcox, the conventional approach of customer relationship management (CRM) needs to be stood on its head: "What is needed is a customer-managed relationship. Self-service enables this."

Instead of seeing the customer lifecycle as being about marketing to, selling to and then serving customers, businesses need to reframe the process through the eyes of the consumer, Wilcox says. "What people want is to learn about a product (marketing), buy it (sales) and then be cared for (service)." According to this approach, using the Web to enable self-service is part--though by no means the whole--of the equation of being customer-centric.

"Look at the banks 20 years ago," Wilcox says, "They had to pay people to use ATMs, which made transactions cheaper. Now people would rarely think of going to a bank for cash."

Wilcox locates Web-self service at one end of what he calls the "customer-vendor continuum." At the other extreme is dedicated, personal service. In between are "virtual" services, where the customer is interacting with a virtual sales assistant or using an interactive voice response (IVR) telephone system, and "assisted" service, such as online or telephone chat.

According to promoters, the advent of Web self-service represents the "third wave" of the Internet revolution. The first wave was companies using their Web sites to post brochures and product data. The second involved using the Web for transactions (e-commerce). And now the "next big thing" is using it to provide customer care (e-service).

According to the Aberdeen Group, customers in the e-commerce world have greater service demands than before because of the so-called "service multiplier effect." So the companies that succeed in e-commerce will be those that learn how to handle these higher demands. "Because live call center agents are expensive, and because many of the new 'e-customers' don't necessarily prefer waiting for live agents, adding e-service applications to the service mix is often the best response," according to the Aberdeen report.

Operational Efficiency
Cost savings are fundamental to the appeal of Web self-service. Computer printer maker Tektronix has saved upwards of $2 million a year in support costs through a reduction in call-center sessions following the introduction of Web self-service. Whereas the introduction of a new model of printer previously would have generated an increase in help calls of 30 percent, most of those calls have now been replaced by customers using the Web as first point of contact, with product information placed on the company's Web site.

Peter Butler, e-service support manager for Epson U.K. acknowledges that the primary reason for its introduction of Web self service was fear of becoming overstretched. "We get thousands of calls for help, and with sales increasing there will come a breaking point," he says. "So we needed to maintain standards, but find an alternative to the phone. The Internet presented itself as the obvious place to start."

One of the advantages of Web self-service is that it can offload routine "frequently-asked questions" (FAQs) from the call center queue. Paul Zak, director of e-business at Sprint PCS, says: "If we could take out the five percent of calls to the center that are about the one question of 'how much time is left on my call plan', we would pay for the entire e-business product."

But customer retention is also part of the equation. Telecommunications provider GTE introduced a Web self-service product from Servicesoft primarily as a retention tool, even though it also led to significant cost savings. GTE was finding that customers signed on for free three-month service trials and then went elsewhere. Since introducing Web self-service, three-quarters of calls that formerly went to call centers were eliminated and the customer lifecycle increased sharply to more than nine months. Cost savings alone amounted to $135,000 a week.

But just as there are many benefits in moving to Web self-service, there are also risks. A badly-constructed Web site--one that is difficult to navigate, that does not help pull the customer through to the answer they require--can easily lose as many customers as it helps to retain.

According to Pitts-Drake: "If you offer bad service, or sites they can't follow, they are gone. Your competitor is just a click away."

Nigel Doust of Inference argues that with e-service as with e-commerce, "the big concern is that people hit a self-service site, get close to a purchasing decision but don't understand something--a bit of text or a diagram--and then you lose them."

Inference specializes in providing the knowledge tools for call center agents. According to Doust, "the big concern for us is that the customer sees Web self-service as an impersonal experience, with no human being to have contact with. This may suit some people, but not others."

Solution Central
As one might expect, there are different levels of Web-based service. At its most basic, Web self-service is no more than providing a database of FAQs on the Web site. Ideally this should be easily searchable and, like the more intelligent search engines, be able to respond to a customer's natural-language questions.

Even this may be too much like hard work for customers and involve too many clicks before they locate the desired information. So the next level of Web self-service involves the deployment of more sophisticated knowledge-based programs that anticipate the direction in which a customer's inquiry is heading. The order of possible solutions can be changed according to probability, based on previous customer inquiry patterns.

The Web can also be used to filter customer inquiries in a way that suits the business. Life insurance companies, for instance, can use their Web sites to filter out the "suspects" from the "prospects." Customers can be prequalified by answering a set of online questions; only when they answer in the right way do they see a button on the screen that enables them to contact a sales or service agent. A Canadian bank was converting about 14 per cent of live calls into business, but conversions increased to 20 per cent when this sort of self-service capability was introduced.

Profiling and personalizing Web self-service takes the idea to the next level of sophistication with software that "learns" from customers' behavior. Inference launched such a "self-learning" product--called K-Commerce Sales (the K stands for knowledge)-in late 1999. Doust said that it "allows a company to profile individuals coming to its Web site, tracking sites they've been to before and how they move across Web pages-and from this information make relevant content suggestions."

However, some skeptics point out that, in practice, such tools can often be as much about "self-misleading" as "self-learning," and the risk of alienating customers by making wrong suggestions and pushing the wrong material at them is considerable.

E-mail is another fairly basic way of providing service via the Internet, but is time-consuming and does not give the customer an immediate answer. Sometimes several exchanges are needed to solve a problem. Pitts-Drake says: "A lot of companies think automated e-mail response is the solution. But it's like going into a shop and wanting a sales assistant but being told to write down a question on a bit of paper, put it in a box and wait for a response."

Software can provide an intelligent analysis of a customer e-mail followed by an immediate, automated response providing a URL that leads to a "self-service knowledge session." At the same time, the e-mail is routed to service agents so they can respond to a call should the customer decide against self-service. But while such a scenario is what many companies are aiming for, in reality for most it remains a long way off.

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