Live from Gartner CRM Summit: Helping Customers Serve Themselves

Mar 04, 2003 10:30 PM  By

(Direct Newsline) Self service: The very term suggests downsized call-center staffs and vast savings as customers move their inquiries to the Web.

But self service can lead to greater costs and aggravation when it is not done right, according to Esteban Kolsky, senior research analyst with Gartner.

“Not only will customers call, but they will call and start yelling at you,” he said during a session at Gartner’s Spring CRM Summit in Chicagto on Monday.

And it can take time even when you know what you’re doing. “Do not believe what vendors tell you,” Kolsky said. “You will not save money with self-service right away.”

Then why were we attending this session on a snowy afternoon?

Because some companies have made a go of it, Kolsky continued.

For example, Kodak built a system for customers to get information from the Web.

The result was that 130,000 answers were delivered in the first 90 days. And a survey determined that 13% of these customers were people who use would have called if the site had not existed. In addition, Kodak reduced incoming e-mail from people who couldn’t find the answers—by 75%.

British Airways achieved similar results with a hosted self-service program in which an outside vendor did the work. The airline (through its vendor) is now answering 55,000 questions per week, and has reduced phone calls by 20%. Self service now represents 31% of all completed transactions, Kolsky said.

And Wonderwear, the global software developer, wanted an easy maintenance solution that could be integrated with Siebel. Call volume went down by 34% year over year, and customers now conduct 500 sessions a week. In addition, the tech support load decreased by 17% per in a year. Integration with Siebel has opened up new revenue opportunities. Also, after the first year, there has been staff reallocation.” Didn’t lay people off because they’re really nice.”

Kolsky couldn’t specify how much these firms saved, but he did present some Gartner research on channel costs.

According to Kolsky, a telephone customer service call can range in cost from $2.50 to $30. And a Web chat can run as high as $34, although some savings can be achieved by doing it offshore.

By contrast, the average cost of Web self service is .65 cents per contact , with a high of $5 and a low of .25 cents. E-mail averages $2.50 per contact. But that low cost can only be realized if the program is automated. “If it is answered by hand with a knowledge base that doesn’t exist, that will be on the $28 side instead of $2.50,” Kolsky said.

It’s possible that some firms place too much emphasis on technology. Gartner research shows that companies spend 47% on maintenance and 28% on content development in the first years of Web implementation. In contrast, hardware will cost 2% and software 10%. “Hardware and software are only 12% of the total,” Kolsky said.

There are varying levels of self service. The oldest and most basic relies on the keyword search to deliver information. The trouble with this method is that most of this data is static, and often requires that the person scan countless documents that have been served up.

The next step on the self-service ladder is to post frequently asked questions (FAQs). Many companies have gotten to this stage, but Kolsky feels it is also limited. It is better to answer specific questions “based on who you are, and your accounts with us,” he said. “That’s what self service should aim for.

As you go up the curve, the complexity will increase. But the first-time resolution will also go up.”

Central to this process is natural-language processing, which helps a firm answer very specific questions. But it helps to know “who the customer is, and what information to provide. It is also important to develop a knowledge base, and to have a knowledge engineer to oversee it.

“Most knowledge bases are static today, and they will be for the next two or three years,” he said. “But you will see breakthroughs within the next five years.”

Kolsky added, “Your goal is to provide answers,” Kolsky said. “But first, you must understand the inquiry.

To that end, a company also has to analyze how questions are asked. “Sometimes a customer will ask three questions to get the information,” Kolsky said. “If everyone does that, you’ve got a trend.” And what can you do with that information?

“Whenever you get to the first question, present the third answer.”