An early 2002 Gartner report on e-service cites studies that show 70 percent of corporations believe they have a well-run contact center that provides their customers with good customer service. Yet only 46 percent of their clients report being satisfied with the service. Gartner proposes that world-class e-service requires enterprises to adapt to users’ needs and requirements, saying, “Customers are demanding more information, easier and expanded access, and support through newer channels. Through year-end 2002, enterprises that properly implement e-service solutions that enable their customers to get better, easier access to information through more channels will increase customer satisfaction by between 5 and 10 percent.”
A 2002 study of 500 business-to-business marketers by Performark, Inc. found that 60 percent of the marketers did not respond to customer inquiries within sixty days. The study measured responses to over 1,000 inquiries made via the Web, business response cards, and toll-free telephone calls. Clearly, it will take more than the Internet to improve companies’ responsiveness. Many companies say that their websites serve important marketing purposes; however, companies are not using their websites as cost-effective customer relation tools. Moreover, as customer inquiries continue to rise, most contact centers are not making proportional increases in staffing and in many cases are even being forced to reduce the number of customer service representatives (CSRs). The growth of online customer interaction and the increased performance pressures on conventional call centers will force companies to implement the kind of e-service solutions that Gartner proposes. Giving customers better, easier access to information is more than just cost effective, it is the start of empowering customers through CMR.
Not all companies understand this. In an Insight Interactive survey, 52 percent of companies did not consider automated customer access relevant to their CRM strategy.
I am indebted to Richard Forsyth, founder and editor of the CRM-Forum, for this perfect example of bad and good customer service. If you need online support for a Sony Vaio PC you need to register with the Sony Club Vaio Site where you are asked to provide:
An eight-digit product code (pre-completed)
An eight-digit serial number (pre-completed)
A user ID and password
A significant amount of personal data
You are then given a sixteen-digit customer ID which you are never asked for again but are afraid to lose. Beyond all that, the product codes in the website are often different from the ones on your PC or in the marketing literature, making it difficult to buy the right memory for your PC. (This was the case at the time this was written. A later visit to the site showed an update that eliminated some of Forsyth’s horrors, but the site was still difficult to navigate.)
Forsyth contrasts this with a similar service from Dell, in which you are asked to provide only a six-digit service tag number or a nine-digit express service code, both printed on the bottom of your PC. He gives a banana peel to Sony and a gold star to Dell.
Elaine Cascio, self-service practice manager of Vanguard Communications offers three strategies for learning how well you are doing with your e-mail and self service:
Talk to your customers: Ask not only about customers’ use of your current applications, but also about the experiences they have had with self service overall, and the applications they’d like to see you offer.
Talk to your CSRs: CSRs know customers and the inquiries and transactions they need better than anyone else in the company. Ask what interactions could be automated, and what they hear from customers. (And show them the value of self service in off-loading routine tasks.)
Benchmark: Find out the types of applications and interfaces offered by others in your market, both over the phone and on the Web.
If Sony had listened to Cascio’s advice, they could have earned a gold star from Forsyth.
Web-based companies seem to be quick to understand that online customer service is crucial to their success—a Direct Marketing Association (DMA) report released in March 2002 found that 75 percent of online companies now integrate their customer service functions fully into telephone, fax, and Internet-based systems. H. Robert Wientzen, president and CEO of the DMA explains, “Traditional direct marketers who built their reputations on customer service were early adopters of real time technologies. As a result, they are applying their existing customer service fulfillment technology to realize economies of scale when conducting Web business.” The direct marketers’ service technologies that worked so well for telephone requests have been translated to the Web and have been accepted by customers.
The importance of these kinds of self-service offerings was further documented in consumer research conducted by the Future Foundation for a consortium entitled “The Self Service Society.” The research found that nearly two-thirds of customers in the banking and mobile phone sector consider the ability to self-serve important in their choice of supplier.
When CFO Research Services queried senior finance executives in the United States and Europe in August 2001 to explore the changing role of information and communications technology (ICT) they found improved customer service was the highest priority for ICT investments. Eighty percent of CFOs said their investments to improve customer service were absolutely crucial or very important, the highest percentage of any ICT investment category.
Some companies are heeding Gartner’s advice and gearing up their service activities with big investments. For example, in January 2002 AT&T announced a plan to pay $2.6 billion over five years to the consulting firm Accenture to bolster its customer service, assigning 4,300 of AT&T Consumer’s 13,000 employees to the new operation. At the same time, Nextel, with partner IBM, inked an eight-year $1.2 billion deal with CRM outsourcer Tele-Tech Corporation to improve its customer care capabilities. Tele-Tech will manage Nextel’s six customer relationship centers, which staff 4,500 customer service personnel.
Turning to Web-based service strategies seems to be a necessary alternative. No matter how much money a company pumps into its contact center, there will be only a fixed number of calls that can be handled efficiently in one day based on the number of employees in the facility. Companies have not found the perfect way to predict spikes in service demand resulting from promotions, new products, or seasonality. This leaves them with one of two results: too many employees working or too few. They either upset customers with long waits at peak times or spend too much for excess capacity on the slower days. Self service on the Web solves some of this dilemma by reducing the number of inquiries that require human interaction. This points out the real value of self service to a firm and its customers: it frees up service representatives to give personal attention to those customers who actually need human interaction.
Ping, a leading manufacturer of golf equipment, implemented a Web-based self-service solution to better manage customer e-mail. Prior to its installation, customer support representatives were personally responding to 1,500 to 4,000 e-mails a month. Many of the inquiries dealt with the same questions, which meant human and financial resources were not being used cost-effectively. Once customers were able to find the right answer 24/7 through self service, inbound e-mail dropped by about 50 percent. With traditional e-mail management costing about $10 per incident and self service only about $1, Ping immediately realized a return on its CRM investment.
Perhaps a word of caution is in order here. Although a drop in inbound e-mail is economically sound, a company loses some opportunity for dialog. It is important as you move customers to self service to monitor the questions your customers are asking.
When another golf equipment maker, TaylorMade-adidas Golf, installed KANA Response, an automated, Web-based e-mail response application, they cut the time required to respond to an e-mail query from 5.5 minutes to 2.7 minutes per message. Due to the improved service, the number of e-mails TaylorMade receives annually actually increased, a result that doesn’t bother the company. Rob McClellan, global e-marketing manager, says, “When a customer receives a ‘good’ response, customers often send a ‘thank you’ message which counts as another inbound e-mail. Sometimes it’s like they’re testing us, and when they get a good response, they come back with follow-up questions and continue the dialog. The cost of additional messages isn’t a concern, since the efficiencies of the operation more than compensate, and it makes us look like a high-quality company.” The savings the company has realized from reduced headcount has already covered the costs of the e-mail initiative, and the applications have virtually paid for themselves.
Another company, network provider 3Com, saved $16.8 million in 2000 by encouraging customers to switch from its support center to its website and learned that some customers actually prefer self service when it is done well. “When it’s done well” is the key. Joe Lethert, Performark founder and chairman, says, “Even companies that are responding to inquiries are not doing a good job. They are saying to their prospects and customers: ‘everything you want is on the website. Go find it yourself.’” Lethert makes the point that customers enter the sales pipeline at different levels of readiness and need to be nurtured differently.
According to a study by RightNow Technologies there are four adjectives to describe what customers want in e-service: fast, meaningful, compelling, and customer-driven:
Fast: Customers expect to be able to find the right information and content immediately. They have little patience for intro screens or repeated clicks on menus.
Meaningful: Customers expect the information they find on the Web will be timely, up-to-date, and relevant to their immediate needs. If it isn’t, they will develop a bad impression of the company.
Compelling: Customers expect content will be presented in a way that’s interesting, interactive, and focused. These expectations are a result of their other online experiences.
Customer-driven: Customers don’t want to have to wade through marketing-oriented propaganda to find what they’re looking for. Companies must, therefore, ensure that their e-service content is driven by the most frequent customer questions—not by what company staffers think customers might be most interested in. CMR will change the customer-driven objective to demand that e-service content be driven not by the questions the average customer asks most, but by the known interests of the individual customers the company is trying to empower.
One of the problems with companies doing self service well is that too many of them consider it a cost reduction program instead of an advantage for the customer. In a 2002 study from KANA, almost half of consumers surveyed said that the most negative aspects of dealing with a company are having to repeat their orders, questions, mailing address, and payment method, due to the company’s failure to track their interaction history. On the positive side, 45 percent of those polled said that having a personalized account set up, either in a call center, on the Web, or via e-mail, made their interaction “more beneficial.”
The ability to get it right for each customer is becoming critical as consumers continually raise their standards as the result of experience. Unsatisfied customers are quick to spread the bad word. A year-long study of online customer experience and expectations conducted by the Future Foundation for First Direct confirms this. The study shows that the proportion of respondents that actually warned other people against using websites at which they had experienced bad service had nearly tripled in one quarter, and they had told more people than previously.
Web requests, just like contact center interactions, require immediate responses. The record for swift response has not been good. In a December 2001 study tracking online retailers, for example, Jupiter Media Metrix learned that only 33 percent resolved basic customer service requests within six hours. Forty percent took more than three days to respond or didn’t respond at all. This hurts more than just the online business: The Jupiter report concludes that 53 percent of consumers polled say they would not be likely to buy from a retailer’s offline store if they had a negative experience in the online channel.
One writer commenting on this dismal report makes a good case for customer empowerment: “If so few retailers answer our e-mails in
Beyond delivering the obvious benefits that come from making customers happier, Web-based self service can deliver return on investment by leveraging a company’s Internet infrastructure, legacy systems, content repositories, and other existing technologies. Guarav Verma and Todd Hollowell at Doculabs, a research and consulting firm, document the key components required at a technical level:
The portal interface. The portal extends the capabilities of service reps to customers. The product should provide a browser interface that lets customers modify their profiles. It should also provide case-management capabilities to let users view, create, or edit trouble tickets or service requests. In addition, it should let them run reports, such as summaries of all outstanding trouble tickets, and provide a Web-accessible search engine for customers’ use.
Collaboration tools. These features let customers interact in real time with service representatives or other customers to share information such as simple fixes for problems, via Web chat or e-mail discussions. Many products allow these group discussions to be posted in a threaded manner and let representatives moderate the discussion groups. Access control is a critical capability, because CRM products must automatically authenticate and govern discussion-group access and limit it to authorized users.
A comprehensive knowledge base. This component provides an extensive repository of content and includes a search engine that lets users locate all documents and information related to their queries or requests for service. Customers can use the knowledge base to manage product or company information and invoices, bills, transaction records, and histories of service inquiries. The knowledge base should support various search methods, such as full-text and Boolean searches, and the use of index fields or parameters associated with information managed in the knowledge base. It also may be able to automatically “learn” from a customer’s previous knowledge-base sessions, and to use this information when determining the relevance of information to the customer’s search request.
a timely fashion, the next best person I can trust to fix things is myself. Allowing me to go online and look on my own can solve so many problems. Did my order go through? When did it ship? Is it in transit? Where do I send returns? What do I do if the widget is missing a part? When are the repair people coming? Offering customers access to the same data your customer service personnel have can help stem phone calls and e-mails. Just think of it as less you have to ignore.” This is a great argument for CMR, which means giving your customers direct access to all of the information and application functions they need to make doing business with you easier.
Web self-service functionality
Allows indexing of content
Lacks full-featured knowledge base
Includes full-featured knowledge base
Available either licensed or hosted
Lets users access data within E.5 or back-office systems
Can provide access to transaction information and general content
Includes full-featured knowledge base
Offers integrated knowledge base and e-mail response
Links to enterprise applications
Provides portal that lets customers obtain product, account, and service information
Offers robust reporting
Includes full-featured knowledge base
Available either licensed or hosted
Integrates with third-party knowledge-base products
Provides prebuilt personalized portal for self service
Includes self-help query engine
Has limited knowledge-base functionality
Data: Doculabs; Source: Guarav Verma and Todd Hollowell, "CRM Makes Strides in Self Service," InformationWeek.com, February 18, 2002, pP. 1–3.
There are some stars. Federal Express’s website lets the customer explore services, shipping, and packaging options, as well as opening accounts, tracking, and getting proof of delivery—all in a convenient friendly format that allows the customer to control every aspect of a transaction. The company confirms incoming messages and responds to them within five business hours in one of eight languages. Frederick Smith, chairman, president, and CEO of FedEx, has been finding ways to empower customers since he founded the business. He was the first to provide software to his corporate customers, empowering them to fill out their own shipping forms and do their own tracking of shipments. The goal at FedEx is 100 percent accuracy, quality, and customer satisfaction on all transactions. Every part of a transaction has some measurable quality to it. The system identifies failures from the customer’s point of view and then looks for ways to correct its mistakes. (The employee-centric culture at FedEx helps assure this customer care. A spokeswoman for the company says, “If we take care of the needs of our people, then they’ll provide the service our customers expect.”)
Wendy Close, CRM research director at Gartner, has studied companies that she says are getting cross-channel customer service right. She reports Compaq’s global e-business applications group bolstering it’s “one face to the consumer” strategy by providing its partners with one user profile, allowing one entry point for security and one simple log-in, and consolidating various business groups within the company to present a single image to customers. Close says, “Compaq projects that these partner and customer management efforts will contribute $100 million to earnings during the next three years.”
Close cites Harrah’s Entertainment, one the world’s largest gaming companies, as having done an especially good job of taking the multichannel approach to a new level by combining a single-view philosophy with loyalty programs and CRM analytics. “Its emphasis on multichannel contacts,” she says, “allows it to create a holistic view of its customers.”
Close’s third winner is Boise Cascade Office Products. “Not only has Boise Cascade moved to create a consistent customer experience across its website, call center, and other touch-points,” she reports, “it has involved its customers in the process, exposing customers to its programs during design, implementation and testing.”
And things seem to be improving. The research firm Answerthink tracked a major improvement in Web retail experience during the 2001 holiday shopping period, thanks largely to the implementation of customer service tools: storing frequently used shipping addresses and billing data, offering express checkout, providing the ability to access product availability, and featuring gift registry and wish lists. The study surveyed 200 online retailers in November and December 2001; participants included pure-play online stores, catalog-based companies, and brick-and-mortar retailers.
Loyalty and satisfaction depend more than ever on the quality of the experience associated with goods and services. Christmas 2001 had its share of customer experience horror stories from some of America’s finest companies. For example, hundreds of people who bought Microsoft’s hot new XBox received defective systems and some said they had to wait weeks and endure shoddy customer service before their systems were repaired. One man said his $300 system stopped working the day he received it, and it took a month of aggravation with XBox customer service before he got a replacement. One woman said she had taken down her Christmas decorations and her son hadn’t gotten to play with his Christmas toy yet, after nine calls to customer service. Fewer than 1 percent of the Microsoft units were faulty, but the response to those customers who do have problems is more important than how many units actually break.
I didn’t have to go to the press or the airwaves to find stories of poor service problems. In 2001 I had planned to leave on Christmas day for a week in Cancun. Since I have such little time to read anything but industry news, I looked forward to a week out of the office to catch up on a couple of new books. On December 16 I logged on to the Barnes & Noble website to place an order. Since the delivery promises on the books I wanted were unclear, I clicked on the AOL Shop Direct Customer Support Chat Service icon to inquire about delivery by December 24. The service was kind enough to send me a transcript of the discussion:
Thank you for using AOL Shop Direct Customer Support Chat service. We are happy to help you at any time.
For your reference and records, we have attached a transcript of the chat session below.
Topic: Christmas delivery
Fred. Newell I have just ordered 2 books. Before confirming to ship I need to know if they will arrive before Christmas.
Carol Hello Fred and welcome to AOL Shop Direct. I am Carol, your Customer Care Consultant.
Fred. Newell Can you answer my question?
Carol I understand your concern regarding the question.
Carol Please let me know when this order was placed.
Fred. Newell It is on my screen now but I won’t place it until I know.
Fred. Newell Hello?
Carol I’m sorry for the delay.
Carol Fred, it normally takes 7-10 business days for the product to reach you.
Fred. Newell “Normally” doesn’t help. Can I have these by Christmas?
Carol Fred, I cannot give you the exact date but as to ensure our customers get their orders quickly, we process online orders immediately after receiving your request.
Fred. Newell Are these books in stock for immediate shipment?
Carol Please let me know the item numbers of the books.
Fred. Newell The Final Days by Barbara Olson and When Character Was King by Peggy Noonan.
Fred. Newell Are you still there?
Carol Fred, please wait a moment.
Carol Fred, since it was advertised on our site, the books are available with us.
Fred. Newell For immediate shipment?
Carol Yes, Fred, as informed earlier, we ship the product immediately as soon as we receive the request.
Fred. Newell Many thanks.
Carol You are welcome.
Carol Thank you for visiting AOL Shop Direct. A copy of this chat will be e-mailed to you shortly. Good-bye and thanks again.
I placed the order and within minutes an e-mail confirmed my order number. Later, on December 20, I received the following not very helpful notice:
Dec. 20, 2001
Billing Information Received
Given only that vague confirmation that my books were somewhere in the United States, I e-mailed the company asking again for confirmation that this order would be shipped to arrive before Christmas, asking them to change shipping details as necessary. Four days later, on the afternoon of December 24 I received the following:
Dear Fred Newell
We are pleased to inform you that your order has been shipped.
I show that you should have received the first part of your order. Yet the last half, When Character Was King, did not ship out until 12/18/01. I show that the delivery is scheduled to arrive on 12/27/01. Since the order has shipped out I cannot change the shipping method. We are very sorry for the inconvenience, and have a good day.
We look forward to your next visit.
Sure! And have a good day. It doesn’t help a customer to say visit our website and click on the icons in the upper right-hand corner if the product isn’t delivered as promised. It helps even less to say have a good day if the customer is having a bad day. What could Barnes & Noble and AOL Shop Direct have done better?
At the time of the original order on December 16, the customer service representative should have specified the ship date and the expected date of delivery instead of saying, “We ship the product as soon as we get the request.” On the December 20 progress notice, instead of indicating that the package was in the United States at 2:02 a.m., the company should have specified a delivery date. This would still have allowed time for the customer to call and cancel the order. Better yet, knowing from a prior conversation that the books were needed for Christmas, someone at Barnes & Noble should have suggested faster express delivery rather than let the order go through with a nine-day shipping process. This personal experience is an example of several things having gone wrong: a meaningful dialog was not created and the information learned from the customer was not put to good use.
The whole issue of customer service becomes more critical in this age of acceleration where the faster we go the faster we want to go. Marianne Lewis, assistant professor of management at the University of Cincinnati, calls this the Acceleration Syndrome. “The more we supposedly save time, the more we intensify the need for speed. We’re constantly intensifying.” Hers is a perfect description of our customer in the new millennium where the speed of computer chips doubles every eighteen months; time saved is measured in minutes, seconds, even milliseconds; and customers click off websites that don’t load in four seconds.
In what the Future Foundation calls “The 24-Hour Society” consumers expect instant gratification. More and more stores are open 24/7. Books can be ordered in the middle of the night and on holidays. Internet banks are open 365 days a year. In this I-want-it-now age, companies that don’t help make customers’ lives easier are perceived as customer-hostile.
A recent example helps make the point. I have been a regular customer of my local pharmacy for twenty-five years. When the kindly owner retired and sold his business, the first thing the new owner did was to remodel the store. No problem in that—except I have always gone to the back of the store to the pharmacy counter to wait my turn to pick up a prescription. I would sign for the insurance as the store associate rang up the sale. I was in and out in just a few minutes. Now, in the remodeled store, I wait my turn at a bright new pharmacy counter where I sign for the insurance. Then I am told to take the prescription to the register at the front of the store to have the sale rung up.
When I questioned the new process and explained that waiting in a second line up front is a waste of my time I was told the new process is “more efficient.” More efficient for them, perhaps, but certainly not for the customer. The new system goes a long way from making customers’ lives easier. This storeowner has not thought about letting customers manage the relationship and hasn’t taken into account the customer’s point of view in this age of acceleration.
The Acceleration Syndrome is a compelling argument for working to let the customer manage the relationship—for finding ways to make customers’ lives easier as they race breathlessly to make every second count. But turning a company into a customer-centric business is not easy. Delivering customer service on the customer’s terms can be expensive. You can’t do it for everyone, yet I was surprised to learn that only 19 percent of companies have a separate contact strategy for high-value customers.
This is not to suggest you should limit your CMR efforts to the biggest spenders or just the obvious segments of profitable customers. The process of learning the specific level of service that customers want will unearth some customers who can be made profitable. This will occur with changes in service functions that will please the customer while saving company expense.
 “CRM in 2002: Redesign from the Customer’s Perspective,” gartner.com, January 7, 2002, p. 2.
 “60 Percent of B2B Firms Not Following Up With Prospective Customers,” Direct Marketing, November 2001, p. 10.
Richard Forsyth, “Banana Skins and Gold Stars,” CRM-Forum, January 20, 2002, pp. 1–2.
Elaine Cascio, “Is Self-Service Driving Your Customers Away?,” ICCM Weekly, January 17, 2002, p. 1.
 “New DMA Report Finds Increasing Use of Web Sites To Manage Customer Service Fulfillment Functions,” The DMA Interactive, March 28, 2002, p. 1.
Melanie Howard, “Wake up Business—Smell the Coffee,” www.bt.com/ insight-interactive, March 2002, p. 1.
 “CFO Mind Shift: Technology Creates Value,” CFO Research Services, August 2002, p. 4.
 “Billion-Dollar Customer Care Deals Announced,” ICCM Weekly, January 24, 2002, p. 1.
Kimberlee Roth, “TaylorMade Golf Improves Its Service Game,” 1to1 Magazine, March 2002, pp. 15–16.
 “The Customer View of the Business,” crm-forum.com, January 9, 2002, p. 5.
 “60 Percent of B2B Firms Not Following Up with Prospective Customers,” Direct Marketing, November 2001, p. 10.
Greg Gianforte, “The Insiders Guide to Next-Generation Customer Service on the Web,” rightnow.com, April 9, 2002, p. 2
 “The Importance of Customer Histories,” ICCM WEEKLY, March 21, 2002, p. 1.
Melanie Howard, “Wake up Business—Smell the Coffee,” www.bt.com/ insight-interactive, March 2002, p. 2.
Scarlet Pruitt, IDG News Service, “E-Tailers Missing Mark on Customer Service,” pcworld.com, January 8, 2002, pp. 1–2.
Blake Rohrbacher, “Serving Customers Online,” my.ckz.com, January 29, 2002, p. 2.
 “Couriers Deliver Customer Service,” informationweek.com, June 3, 2002, p. 60.
Lou Hirsh, “Multichannel Magic: Who’s Doing It Right?” crmdaily.com, April 1, 2002, pp. 1–2.
 “Online Customer Service Catches Up,” ICCM Weekly, January 24, 2002, p. 1.
Allison Linn, “New Xbox Gets Flak for Waits on Service,” The San Diego Union-Tribune, January 5, 2002, p. C2.
Kathryn Balint, “Too Much Too Fast,” The San Diego Union-Tribune, January 14, 2002, p. C1.
Ibid., p. C7.