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| 5 Steps to Better Customer Care |
| Use Internet strategies to improve customer service—and customer satisfaction. |
By G. Patrick Pawling
Illustration by Phillipe Weisbecker |
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When it comes to customer service—and it always does—savvy companies realize that the Internet can help them save money, solve problems, increase customer satisfaction, and empower their customers with self-service capabilities and access to real-time information. But how do companies create a seamless and efficient customer-care system that takes full advantage of the efficiencies of the Internet? The ultimate goal should be to create systems that allow customers to solve their own issues and get the information they need in a single contact—one and done. We’ve talked to industry analysts and companies on the front lines to identify the top five steps to better customer care.
Step 1
Face the facts.
If your competitors aren’t already pushing their customer-care systems deeper into the Internet, they’re planning to. Some will do an effective job. Many won’t. Do it right the first time and you’ll be far ahead of the competition in terms of savings and customer satisfaction. And customer satisfaction is vital to long-term success. It’s a sharp sword these days, slaying some companies and allowing others to fight their way to the top. If the Internet turns products into commodities, then customer service is even more vital, as it becomes the differentiating factor that can give a company a competitive advantage.
“Customers are demanding Web-based customer service,” says Esteban Kolsky, a senior analyst at research firm Gartner. “The adoption rate for the Web is increasing dramatically, and people are starting to realize they can deal with companies this way. Companies that don’t let them will be left behind.”
“Some companies are better than others,” says Kolsky. “Some companies get a B-plus grade and some get a C, but most get a D. The problem is that most companies do it more to save money than to provide better customer care.” Kolsky says the better companies include Saks, Lands’ End, and the U.S. Government’s Internal Revenue Service. “The smaller companies do a much better job than the larger ones,” says Kolsky. “They’re more nimble, and they realize they need to take every competitive advantage they can.”
It is possible to both save money and provide better customer care, however. It’s demonstrably cheaper to deal with customers on the Internet than on the phone, by mail, or in person because you can automate many of the interactions and provide customers direct access to real-time information such as order status and transaction history. In many cases, you can persuade your customers to find answers for themselves on your Web site. Many companies are also setting up message-board and chat areas on their Web sites to encourage customers to help each other by interacting online.
While some customers still prefer traditional methods, most find it quicker and cheaper to spend 5 minutes searching a Web site than to spend 25 minutes on hold, or to pay for a support phone call. The trick is to provide the service that customers want, in whatever form and wherever they want it. Today’s Internet technology lets customers find the answers themselves online, solicit feedback from others through real-time chat, or click on a button to talk to a live customer-service agent.
“A lot of people want to be able to do self-service sometimes, but everyone wants to know they can get to a warm body,” says Kirsten Cloninger, industry analyst at Cahners In-Stat Group. “Some people originally thought the Internet would replace the telephone for customer care. But that’s definitely not the case.” Cloninger says companies must move to a stronger Internet-enabled presence if they expect to take customer care to the next level.
“Companies are beginning to look at Web-based customer care more as a means to retain customers instead of purely a way to acquire new ones,” she says. “It sounds like a cliché, but with the competition simply a mouse click away online, customer care is definitely becoming mission critical.”
According to Kolsky, companies spend as much as $45 to handle a customer phone call—although some cost as little as $6, depending on factors including implementation costs, call length, and the number of customers and representatives involved. The cost of answering an e-mail query, meanwhile, could drop to about $1 (most are around $3 to $5), and self-service on a Web site could cost from only a few pennies to up to $1 per interaction, depending on how many customers are using the system, the amount of automation, integration costs with back-office systems, and other variables. Online chat, in which customer-support agents answer questions live via on-screen text messages instead of on the phone, is arguably cheaper than phone service because a skilled agent can handle multiple screen inquiries simultaneously.
Some analysts disagree about whether chat saves money over phone calls, but Kolsky puts the price of a typical chat session at around $7 and thinks the option is worth pursuing. A major difference is that chat eliminates telephone carrier costs. But beyond cost, Web-based self-service extends the reach and scale of a company’s efforts by essentially providing anytime, anywhere access.
At Harrah’s Entertainment, the customer Web site offers more than the usual “where-to-find” information, according to David Norton, the company’s vice president of loyalty marketing. The site is already saving the casino company money through its self-service reservation system. Customers can also go online to check their account information and reward points, which further reduces the workload of phone operators, speeds the process for customers, and provides 24x7 access.
“That was a big part of our thinking,” says Norton. “It takes a couple of dollars on the phone to make a reservation, and on the Web it costs pennies, so not only does it make it easier for the customer, but it saves us money.”
One of the advantages of using the Internet to provide customer service is that it gives companies the ability to unify their customer information. If an online agent doesn’t know that a customer has already called twice, time is lost, and so too, maybe, is the customer. With a well-implemented Web-based system, all customer contacts are consistent because all contact records are always available to service agents. A thorough Internet approach allows you to provide complete and consistent customer care. (For more information on providing customer care across channels, see Consistency Counts also in this issue.)
You can also set up online systems that automatically evaluate customer navigation and purchasing habits. Then, you can use that information to market to groups or individuals on a personalized basis. Thus, the Internet becomes a tool not only to find customers but also to keep them happy and treat them as prospects again when the time is right.
Step 2
Know your customers.
You already know a lot about your customers, but in order to integrate the Internet further into your customer-care strategy, you might need a deeper understanding of their online preferences. Companies have made huge mistakes in estimating the Internet habits of their customers, according to Gartner’s Kolsky. For example, elderly customers might be comfortable with e-mail interaction, but they might not like self-service options, such as searching a company Web site or filling out online forms.
“Sometimes companies forget to think about some of these things,” says Kolsky. “There are many companies that failed in their efforts because they failed to take their customer population into account.”
Determining your customers’ Internet needs can be challenging. “The best way to do it is to talk to customers,” says Kolsky. “Go to them and say, ‘Tell us what to do and work with us and tell us if we are doing it right.’” You can talk to customers through focus groups, e-mail, and online surveys. You can also get information by monitoring their Web interactions and surfing patterns. Oddly enough, sometimes companies ask for the information from customers and then ignore what they receive. In that case, Kolsky says, “You can build it, and I guarantee you they won’t come.”
Step 3
Prioritize your projects.
“First you have to understand what you are getting into,” says Ron Zemke, founder and president of consulting firm Performance Research Associates. “And what you are getting into is not a replacement for anything you are doing now.” Zemke is coauthor of the book e-service (Amacom, 2001), which describes 24 ways companies use online strategies to attract and retain customers.
“Online service is an additional way of communicating with customers and prospective customers,” he says. “If you look at it that way, you can stay out of trouble. It changes the density of the customer relationship, but it doesn’t end that relationship. You can wind up talking more frequently with the customer.”
Positive service interaction fosters loyalty. For example, 86% of Cisco Systems’ customers, partners, and resellers who use its Technical Assistance Center Web site say they are “very likely” to return to the site as their first contact the next time they need technical assistance.
Consultants and suppliers often know the best paths through the customer-care jungle and are a great resource in the initial stages of developing a customer-care strategy. They can help your company customize systems to fit your business models and target audience. You might also choose to outsource the entire customer-care function to an application service provider (ASP). Cisco has partnered with customer-care application solutions providers including Agillion, E.piphany, HEALTHvision, Kana/Broadbase, Onys, Participate.com, and webfair.
Many companies choose to build their own systems. Home-improvement company iFLOOR.com (which recently acquired CornerHardware.com) made a clear decision to do everything in-house—and COO Michael Pinkowski says it worked. Pinkowski thinks outsourcing can complicate communications channels when it comes to handling customer issues and complaints, and he wants to hear his customers’ issues without delay. He says every bit of code that went into the company’s customer-care system was written in-house, partly because flooring is a complicated business, but mainly because he wants his company to be as close to its customers as possible.
“If somebody is irate, you hear about it minutes later instead of reading about it on a report days later,” says Pinkowski. “If somebody’s yelling, I’m available. I’m the COO, and I take the call if I need to.”
iFLOOR.com makes no effort to push customers into using the less-expensive Web-based contacts, adds Pinkowski. He thinks it’s better to let the customer decide. “I don’t think you look at this as, ‘Where can I save money?’” he says. “It’s, ‘Where can I save a customer?’ I don’t care if I cut customer-contact costs by 50%. If you lose the customer, you’re not ahead of the game. So in my book it’s whatever works for them.”
Truly integrated Web-based customer-care systems are still relatively new, and the list of companies providing solid Internet-based customer service “are few and far between,” says Zemke, but there are some notable exceptions. “United Parcel Service has done a wonderful job of taking paper out of the relationships; Omaha Steaks’ Web site is wonderful, fast and well constructed; and Lands’ End is just as good.”
Step 4
Start simple.
Adding a frequently asked questions (FAQ) section to your Web site is a basic addition, and it’s a simple example of how customers and prospects can help themselves. As your customer-care capabilities become more sophisticated, the FAQ can become a more dynamic service tool as it evolves and helps you learn from customer queries and gather information for company databases.
“Nobody should be waiting around,” says Zemke. “But don’t try to do everything at once. If you do, you’ll probably make too many mistakes.”
One of the first steps, according to Forrester Research analyst Bob Chatham, is to synchronize your Web-based capabilities and phone agents. This way, your customers and your customer-service agents are always working from the same page. A good way to irritate customers is to force them to relate the same story to multiple contacts.
A survey by In-Stat found that some 66% of enterprise businesses say they have both Web and toll-free customer-service areas, but that the systems are not integrated. “They’re paying in multiple ways if you think about it,” says Cloninger. “Plus, they are unable to leverage the information that the customer is providing on the Web.”
Part of the problem, she points out, was the mistaken idea early on that companies are dealing with two different customer groups: Web customers and offline customers. “There is no such thing as a wholly independent e-customer,” says Cloninger. “It’s a myth. It’s the same customer, different channel.”
Synchronizing all the customer contact records provides multiple benefits. For example, synchronizing the information provides customer-service agents with the ability to instantly recognize the company’s most profitable customers as soon as they call on the toll-free line and then handle or forward their calls appropriately. Using such information, a mutual fund company, for example, may choose to move that customer near the front of the queue. “If it’s a small fry, it may go into the ‘Wait 20 minutes’ line,” says Chatham.
However, Chatham warns that such systems also pose dangers. “That technology is being used pretty bluntly right now,” he says. “I’d say the principle here is that the customer is profitable until proven unprofitable. Companies have to be careful.”
Once companies have synchronized customer data, Chatham advises them to consider implementing systems to help customers track the status of their own orders. Typically, order inquiries account for about 40% of service calls to retailers, “so there is a huge opportunity to take a lot of the load off the agents,” Chatham says. Some companies take a more proactive approach and automatically e-mail customers with updated information about delivery and shipping in addition to providing tracking tools on their Web sites.
You can also bolster your Web site’s self-service capabilities by persuading customers that it’s in their best interest—and it truly is, if the system is set up correctly—to actually read FAQs and search for information.
But customers don’t always take the “help yourself” suggestion well. “Some 87% of consumers prefer aided service to self-service,” says Chatham, “so you need to retrain these customers to use self-service. And it can be better for them because they get to do it on their own time in their own terms.”
Whatever the system, it must work quickly. “We set the expectation that we’re going to pick up the phone on the first ring, but you’re going to take three days to answer an e-mail?” Chatham asks.
One trend, Kolsky says, is the outsourcing of chat systems to other English-speaking countries where labor is cheaper, such as India, Pakistan, and some Caribbean countries. The key is to be sure the agents have access to information and abide by the same standards you expect. “Written English is a lot more forgiving than the spoken word,” says Kolsky. “You don’t have to worry about accents or other verbal communication issues.”
While it’s not difficult to set up software systems that automatically scan and answer customer e-mail, it’s not always easy to make them work. The problem, Kolsky says, is that when customers send e-mail, they tend to write an entire chronology of their problem, which intelligent software has difficulty digesting. One option is to have a threshold barrier: If the software isn’t reasonably sure it knows what the e-mail says, it routes it to a live agent. Otherwise it answers automatically. As natural-language tools evolve, accuracy will improve. Kolsky predicts that full automation is only a year or two away.
One of the most important components of automating customer service is measuring customer satisfaction. The dialogue must continue, and automation only goes so far.
“People want the empathy factor,” says Zemke. “They don’t want to be ‘the gall bladder in 407 West.’ Human touch is still very important. There are times when a phone call is really an important touch.”
“Customers can invent more ways to screw something up than we can ever anticipate,” he says. “And that’s our service-recovery opportunity.”
Step 5
Think about the future.
Build a standards-based, robust, foundation infrastructure that can easily scale as you deploy additional applications.
Providing telephone support over the Web using Voice over Internet Protocol (VoIP) technology will become more important, analysts agree. Done well, it will provide a way to deliver online multimedia customer care that melds all the tools: Web, phone, and chat. For example, customers visit a Web site, and if they can’t find something, they can then click on a button that says, “Talk to an agent now.” The agent calls them back on the phone or instigates a live conversation online. Agents can instantly send the relevant information to the customers, who can decide at that moment whether the information is what they need and if the problem is solved. The best systems also allow the agent to see what pages the customer has traveled to get there.
Cognitive systems that learn from customer interactions are becoming a hot topic. Such systems “learn” from customer contacts and use that information to determine how to better interact with future customers. These systems are probably two or three years off, says Kolsky.
But remember, they’ll be coming to a competitor near you.
July/August 2001
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