Welcome TO THE Evolution
1to1 charts the growth of old school call centers into high-tech customer interaction centers
With the wide acceptance of Ask Jeeves and scores of other dynamic, intuitive help applications, customer service on the Web has reached, well, adolescence. Across industries, U.S. call centers are gradually evolving into customer interaction centers (CICs), as operations managers review the many ways customers desire to interact with the company, to have their questions answered, products ordered, service changed or problems resolved.
1to1 spoke with a bunch of call center managers and discovered the conservative statistics appear correct: Despite the dozens of e-business software salespeople calling on these managers, traditional call centers are evolving into CICs at a deliberate pace, a cautious step behind e-commerce interaction centers. In this special focus, 1to1 looks at how some traditional companies are adapting their call centers to take advantage of e-mail and the Web, and empowering these centers with powerful new technology.
Some trends in the evolution: The Network Connection Call centers are taking advantage of shared networks, from LANs to the Internet, to allow customer service reps and their customers to share files on a computer (if not to share the whole computer). The Container Store and its customers design closet organizers together through a shared Web page; Travelocity.com’s “Shop With An Agent” feature allows reps and customers to see the same Web browser, so the rep can guide the customer through the online shopping experience; IT phone reps at PSE&G, New Jersey’s electric and gas utility provider, can take over a client’s remote computer and maintain and repair it, an important function as the company acquires new companies beyond New Jersey. “How do we support remote offices so those folks get seamless support?” asks Jim Yarussi, the company’s manager of IT client services. “Automated products let me use the network to take over their machines.”
Here Comes Text Chat At a fast pace, companies are implementing text chat functions between rep and customer, especially when dealing with valuable or upscale customers and high-margin products. “Our live Web agents are eight times more productive than typical phone agents because they can service from five to eight customers at one time,” says Peter Sontag of Lowairfare.com, where text chat is a primary feature, differentiating it from competitors.
A year from now, text chat promises to be as important as e-mail in online customer service. American Airlines, Travelocity.com and Alaska Airlines are launching text chat in the first quarter of this year.
Fear of the `C’ Word Customer service operations managers are working to correctly position their various information channels – Web sites, e-mail, interactive voice response, phone representatives – in the most cost-efficient and customer-friendly way. PSE&G’s IT client services department and Expedia.com are among the companies analyzing the positioning of their various information channels. Expedia.com’s CRM director Tony Gonchar says, “As we get better at this business, we can assess where [an automated e-mail response] is appropriate.” Fearing the term “cost center,” managers are challenged to handle the most commonly asked questions and the least-profitable customers in the least-expensive way – by posting information to the Web site and directing customers there.
Voice Still Reigns, in Places Despite its cost, voice over telephone communication is still being made accessible to customers by many companies, such as those in retail as well as, obviously, in the telephone industry. “The majority are still calling in,” says Clay Weekes, director of retention at SBC Communication, a national provider of residential phone service and related products. “They want the personal touch going over their bill. There’s no way electronically you can show them a picture, go to page three of their bill, go line by line so you can explain it.”
Powerful Applications Empower Service For such telecomm clients as SBC Communications and SNET Wireless, CIC vendor CustomerLinx uses Quadstone’s analytical software to evaluate outbound sales calls on a daily basis, and improve the effectiveness of the calls as each day passes.
TRX is a reservation and customer support provider for a number of airlines and travel agencies, and its proprietary technology automates the quality control process in travel reservations to ensure the ticket is issued correctly and the customer’s preferences are filled.
The company has automated 97% to 98% of quality control in the ticketing process, compared with a traditional reservation where an agent has to key in 50% of the necessary data.
Applications Must Integrate Operations managers are requiring that new CIC applications integrate with other technologies used within the centers, for example, to be open and adaptable enough to integrate with product databases, customer databases, e-mail management, personalization engines and data mining tools. For one, home care and cleaning manufacturer Bissell found it a challenge to integrate its product and customer databases. Brian Verlinde, Bissell’s manager of e-commerce and CRM, says, “It has been somewhat of an implementation, having our Onyx customer database talk to our back-end database showing product availability [for when] a customer calls and wants to know where their order stands, or if this product available.” He adds the call center worked out the problem before they went live with Onyx.
Separation of Offline and Online Service A good one-third to one-half of clicks-and-mortar companies are outsourcing their e-commerce customer service or launching separate call centers to handle online customers. Why? “It’s too expensive to overhaul traditional call centers and replace legacy systems.” “Online shoppers have their own unique needs and means of communication.” “To bypass the union.”
Employees Most Critical to Success Despite their significant investment in technology, operations managers say well-trained employees are the most critical factor to the call center’s success.
Formerly called customer service representatives but now known by a range of monikers such as customer solutions reps, e-specialists and technical reps, these front-line employees are undergoing continual training on new hardware and software to boost their skill sets. “Despite all the sizzle, the most critical component is the right people, reps with the right skills,” says Jeff McDermott, CEO of CustomerLinx, which operates three CIC facilities staffing 1,000 “Linx Reps.” Seconds Yarussi, “It comes back to hiring and recruitment. Our people are willing to take on additional responsibilities, to share knowledge with each other and to accept change.” Of course, technology vendors say technology is equally important as employees to a call center’s success; at least they’re right in claiming the right technology gives a competitive advantage.
E-commerce Sites Experiment With E-service E-commerce companies are at the forefront of implementing the most state-of-the-art online service technologies. Forward-looking applications include: live video and audio interaction between rep and customer, such as eLive!’s product; virtual sales agents that guide the shopper through to purchase, as in Finali’s NetSages; voice over Internet, from Net2Phone and others; and animated voice navigators, such as the IVAN product from OneVoice Technologies. But these technologies have a long way to go to prove their usefulness in the market. In the meantime, managers are being challenged to deliver quality personal service to differentiate themselves from competitors and to satisfy the demands of customers. Says TRX president Trip Davis, “It’s a period of transition and implementation.”
Bissell helps customers help themselves online “How do I clean dried pet urine?” may not be your main concern, but it happens to be the fourth-most-popular question posed to Bissell, the century-old home care and carpet cleaning company, on its Web site’s frequently asked questions (FAQ) section. A customer clicking on the question will learn a couple of methods of attacking the stubborn stain, including using one of Bissell’s pet stain cleaning formulas in the Bissell Deep Cleaner machine. The customer is then asked how satisfied they were with the answer, from 100% to 0%, and is also invited to e-mail customer help for more personal attention.
Through a combination of automated tools and employee review, Bissell’s FAQ is continually being updated, based on customer satisfaction with question/answer results. The Michigan-based manufacturer is hoping an effective online self-service section, together with e-mail support, will help reduce calls to its internal customer call center, says Brian Verlinde, Bissell’s manager of e-commerce and CRM. “We need to communicate that we do have all these avenues available,” he says. “Once we do that, we can cut costs and give consumers what they want.” Through product literature, Bissell has begun to point customers to its site (www.bissell.com) for customer service, and is planning to announce its online help to a larger group of established customers through a marketing campaign in the near future.
Bissell’s implementation of this customer service solution was a tactic not only to reduce phone calls handled by its 15 customer service reps, but to cut e-mails to the department as well. With e-mail rates rising 400% from 1999 to 2000, Bissell implemented the RightNow Technologies solution to better manage and route e-mails and to post enough helpful information on the site to eliminate them altogether. The company saw a 30% drop in repetitive questions the first month of implementation, says Webmaster Pam Kozicki. Dan Nichols, director of marketing communications at RightNow Technologies, notes that with most companies, “Eighty percent of customers ask the same 20 questions over and over again.”
WEB SITE-CENTERED CRM STRATEGY Web self-service and e-mail management is not a hasty, stand-alone solution for Bissell but part of a Web site-centered customer relationship management strategy. In September the company outfitted its call center with Onyx e-CRM software, to help learn more about its customers and interact more effectively with them. The company has had to overcome the technology challenge of integrating product and customer databases on call center reps’ desktops. But it’s hoping its new suite of technology has positioned it for growth. Specifically, Bissell hopes to draw a larger share of its customers’ wallets: While a customer who buys a Bissell Deep Cleaner or Upright Vacuum may not need another machine in a decade or more, Bissell wants to be their regular direct source for cleaning formulas, parts and accessories. Traditionally selling through resellers, Bissell joins the multitude of firms boosting their consumer-direct initiatives.
To do this, Bissell needs to know more about the estimated 1 million active consumers in its database, a number of whom are there because they’ve bought and registered cleaning machines in the past year. In particular, Bissell is learning which of them have pets, kids and allergies – and therefore may have a need for specialty cleaning formulas. Campaigns from this data will likely not come for another six months, and will be centered on direct mail. One challenge the company is facing is getting its customers’ e-mail addresses – a drawback of posting self-help on its Web site is customers don’t need to e-mail their questions. The company has e-mail addresses on only 5% to 10% of its customers.
“This is new for Bissell – this database marketing, figuring out what customers want,” Verlinde says. “The overall goal of launching CRM is to extend the lifetime value of customers – to keep our customers happy and to keep them coming back.”
The Container Store organizes itself around customer service A year ago, an employee of The Container Store nominated the company to Fortune magazine’s “100 Best Companies to Work For” survey by claiming, “I love this company because `Customer Service is #1′!!…All customers can reach us by phone at any time.” Anyone who has called your average present-day customer service department can attest that that’s a bonus: Sometimes its nice not to be directed to a Web site help section.
The Container Store placed first in that esteemed survey, coming from nowhere to be named Fortune’s best employer of 2000. And the good news for customers is that the enthusiastic employee quoted above was right: This upscale retail chain specializing in home-organization products treats its customers as well as it does its employees. “We make our e-mail and phone number prominent on our Web site in case the customer needs to make a more detailed decision,” says John Thrailkill, the firm’s e-business marketing director. “We let them decide how much information to get from what source.” Seconds Amy Carovillano, vice president of distribution: “We don’t want them to feel they’re out on their own.”
To support this policy, The Container Store, which sells through 22 stores, five catalogs and a Web site (www.containerstore.com), staffs a 60-person customer solutions department at its headquarters in Dallas. As a privately owned, upscale retailer, The Container Store can afford to position its call center near the front lines of customer service. Its average customer is a college-educated female from a $75,000 household. Thrailkill says the customer solutions department has some significant expenses, but also handles calls from customers of each of the chain’s stores nationwide.
“We are privately held,” he adds. “So we can look at those things in a more forgiving, long-term way than companies that have to answer to stockholders.”
So when The Container Store began promoting products on its Web site in August, the company made no drastic changes to its customer service department or policies. There was no trying to defer least-profitable customers to an online frequently asked questions (FAQ) section, no hiding its toll-free 888-CONTAIN number or channeling customers through e-mail. Sure, the company posted FAQs on the site, but phone reps were still available to answer seemingly generic inquiries, up to 500 of them a day. Questions cover what a product is made of, what colors it comes in and, after it’s purchased, how to assemble it.
In addition, the department’s 200 customer e-mails a day are not brushed off with automated responses. A rep looks at every response, many of them auto-suggested by a Kana inbound e-mail management application, before they’re sent back to the customer. “Because of the nature of questions we get, we’re still not comfortable using that artificial intelligence,” says Carovillano, adding the company is exploring that feature for the future.
The larger reason the company makes its customer solutions reps so accessible is the nature of its business: The reps are not filling orders, they’re solving problems and suggesting solutions. They are less order-takers than salespeople. A typical customer calls for a solution to a space problem, such as with a pantry or closet. Reps are trained – three months in a store, 235 hours total – to find solutions for customer problems. And their solutions rang up $12 million in annual sales in 2000, 5% of the store’s annual revenues of $237 million.
Thrailkill says the reps are equally comfortable communicating by phone or online. At least half of them are also capable of designing and selling The Container Store’s highest-margin product, its elfa organization solution. Elfa represents 20% of all company revenues, a percentage growing toward 25%. Reps can walk customers step-by-step through the process of designing an elfa system, either on the phone or online. Using the Web site, a customer inputs some preliminary design information, which the rep turns into a design over a couple of days, posting a draft of the solution on a special Web page for the customer to see. Interacting with an online bulletin board system, the customer requests changes to the design on the Web page, and the rep makes further changes until the customer is ready to purchase. Carovillano quips that her reps are “fully closet-trained.”
This is gratifying work, one of the reasons the reps have an average four years’ experience with the company. Fortune magazine reported The Container Store loses only 28% of its full-time salespeople a year, compared with an industry average of 73.6%. Company executives view this culture of employee satisfaction as its primary reason for success. “Being able to offer this solutions-based approach – we need to keep that as our core competency,” Carovillano says. “Through hiring, training, through our ability to keep our employees happy.”
Call center helps PSE&G IT department serve internal `clients’ Two years ago, the IT client services department at New Jersey electric and gas provider PSE&G turned its business inside-out. To reduce costs and increase efficiency, the department took most of its computer technicians off the road and sat them at phones. The mandate: Help PSE&G employees solve their computer problems through a telephone conversation and, if necessary, by utilizing the company’s network to remotely access and repair the caller’s computer.
The change wasn’t easy. The department grew from five phone technicians in 1997 to 80 now. In the early days, many of the technicians were harsh to callers, if not rude, says Jim Yarussi, manager of IT client services. “We had to take the soft skills of the airline and banking industry and transport them into our technicians, so they’d use a soft feel to fix the problem over the phone.”
Yarussi is especially concerned about keeping clients happy (callers are not colleagues, they’re clients), because he doesn’t take his department’s future for granted. While his call center currently has a captive audience of computer users forced to rely on his technicians, that could change in the next couple of years. PSE&G is growing by adding services and buying electric and gas providers beyond New Jersey. Yarussi anticipates internal departments will have the option in the future of outsourcing their IT function.
So IT client services thinks of itself as an independent business, accountable for its costs and services. The department sets strict service goals, measuring its success using its Teloquent 4.0 call center solution and reporting on such metrics as call volume, call abandon rate, first-call resolution (“fix it right the first time”) and surveying clients. As an example:
– Goal: Ensure technicians fill out call records for 100% of calls; Current Achievement: 95%
– Goal: Solve 65% of problems on the first call; Current Achievement: 78%, Consistently meeting it
– Goal: Fix problems well enough so less than 0.5% of clients call back again with the same problem; Achievement: Consistently meeting it
– Goal: Keep number of clients who abandon call before a technician picks up at or below 5%; Achievement: Consistently meeting it
– Goal: 4.0 on client satisfaction surveys sent by e-mail after every call record; Achievement: 3.65
IT client services used to fix a problem in an average of four days; that average is down to a day-and-a-half. One incentive: Technical reps have to meet these goals for raises. Sal Cursi, one of PSE&G’s technical reps, says he and his fellow local-area network reps work to keep the average call between two and three minutes. The three weeks of network training helps, he says, as does the knowledge shared between the co-workers on a network bulletin board.
Yarussi likes to measure his results against service-centered industries. “If this were an airline, calls would lead to revenue,” he says. “We’re not a revenue center yet. But we want to be more than a cost center.” Either way, his department’s mission is important enough: One particular PSE&G unit buys electricity from Colorado and resells it. If the network is down, the company could lose millions of dollars.
Just as it has hit its stride, IT client services is about to turn its business inside-out once again: Department management has produced an internal study called “Call Center Consolidation Architecture” in preparation for its transformation into a customer interaction center (CIC) in the first half of 2001. The department is planning to raise the positioning of e-mail, interactive voice response and network self-service in customer interactions. The goal is to save money by servicing clients off-hours without having to staff technicians, and allowing clients easy access to information so they can solve many of their own technical problems, as well as place orders for their own products.
It’s a transformation that many call centers, both internal and outsourced, are experiencing. Bruce Bower, president and CEO of Teloquent, says, “We’re seeing a shift in focus from cost-containment. Now it’s the cost of lost opportunity.”
For the transition, PSE&G will likely migrate to Teloquent’s new Interchange product, an interaction center solution scheduled to ship in late March. The product brings together such communications media as telephony, e-mail, text chat and Internet self-help, allowing a CIC manager to perform centralized administration and reporting on activity.
PSE&G managers are not taking this pending change lightly. Yarussi says it’s been a monumental task weighing which problems to address through which media. “If a client is in an application receiving an error code, is it appropriate to have them send an e-mail?” he asks. “Then my rep gets it and has all these questions.” He adds nothing is gained by using e-mail if it’s not reducing costs or making the customers happy. But cost is the ultimate driver, he says. “If it takes a million to design it and you don’t realize the cost savings from your changes, that’s a problem.”
Text chat is the next stop for travel sites As sure as America Online transmits 656 million instant messages and ICQ supports 9 million people chatting every day, text chat promises to be the next killer e-commerce function, particularly in areas like travel, where high-priced products are sold. American Airlines and Alaska Airlines are moving to launch live text chat on their sites in the first quarter of 2001, allowing customers to initiate a chat session with a live agent. And falling just short of chat, Travelocity introduced “Shop With An Agent” collaborative browsing on its site in November, where a customer can call a Travelocity agent and request that the agent see the customer’s Web browser and push relevant Web pages as he or she shops.
American Airlines is implementing its text chat/shared browser function as an added service to top-tier members of its AAdvantage frequent flyer program, according to Elizabeth Crandall, the airline’s head of CRM. Alaska Air will offer the same to all customers as part of its increased attention to Web help, says Steve Jarvis, the company’s vice president of e-commerce. The airline opened a nine-agent, dedicated Web help center in September as part of its initiative to process 50% of sales through its Web site by 2003. The center’s director, Jim Quentin, says the text chat link will be positioned strategically on pages where customers are abandoning their online booking. He adds, “The beauty of it is, in a one-phone-line environment, you don’t have to get out of your session to call someone to get help.”
Add these to the travel sites that already use text chat for reservations or customer service, most notably Gorp.com, Lowairfare.com, Biztravel.com and Uniglobe.com. While the majority of these sites already offering chat report a need for the service, there’s no consensus yet on its value or return on investment.
Lowairfare.com has been the most vocal about the success of its text chat system, positioned as the predominant differentiating feature of its discount flight reservation service. As of the third quarter of 2000, Lowairfare.com, owned by 800 Travel Systems Inc., was reporting an 18% look-to-book ratio on its site, more than three times as high as Travelocity.com and nine times as high as the e-commerce average.
Of course, one possible explanation for this high ratio is that there’s not much to look at on the site, which doesn’t offer information on hotels, vacations or destinations. Travelers making a reservation through Lowairfare.com are given the option of using a live agent for assistance. Travelers type in their departure and arrival cities and dates of travel, and the Web browser splits into two windows, an itinerary on one side and a chat window on the other, with welcome text from a live agent, such as “Agent Brian.” Brian asks if the traveler is happy with the displayed itinerary. If not, Brian works with the traveler, with the hopes of creating an itinerary at a price satisfactory to the customer.
800 Travel Systems’ president and CEO Peter Sontag says the system gives the company the advantage of being able to process complex itineraries, such as trips with numerous destinations, which he says are not handled well by his competitors’ automated systems. Another advantage: A live agent can better assess a traveler’s needs than an automated system. As a result, 92% of travelers who begin a transaction at Lowairfare.com complete it, he says, a significantly higher percentage than the e-commerce industry average. Sontag even defends the cost to 800 Travel Systems of retaining 200 travel agents instead of improving the site’s automated features. “Our live Web agents are eight times more productive than typical phone agents,” he says, “because they can service from five to eight customers at one time.” Each agent can simultaneously engage in several chat sessions: When customer A is reviewing his search results, the agent works with customers B, C and D, until customer A sends another question or response.
At adventure travel service Gorp.com, executives are satisfied with the initial customer response to text chat, launched in April 2000. When a customer initiates a chat, an agent begins by asking preliminary questions to assess the customer’s interests. The agent can then take the customer to relevant sections of the site, or send pages showing trips. Gorp.com CEO Jonathan Guttenberg says chat accounted for 5% of all inbound communications in the third quarter of last year, and is growing.
Business travel booking site Biztravel.com is also experiencing roughly 5% of inbound contact through chat, compared with 80% by phone and 15% by e-mail, says Justin Shaw, the company’s vice president and general manager. But Shaw reports customers are using chat in trivial ways, more like instant e-mail, for instance to ask why a search didn’t turn up a particular flight. “They’re not asking questions that require interaction. There’s not a lot of back and forth,” he notes, adding his customers, more than 75% of them business travelers, seem to be choosing to use the phone for more involved inquiries.
These e-commerce sites note a number of reasons why they’ve implemented chat. As mentioned, many Internet shoppers accessing from home only have one phone line. Also, judging by the popularity of ICQ and other chat applications, a significant number of Web users consider it easier and more preferable to just use their keyboard rather than pick up a phone. And then there’s the potential cost savings. Dan Nichols, director of marketing communications at RightNow Technologies, whose RightNow Web customer service product offers live chat, cites Forrester Research data showing each telephone contact costs $33.00, compared with $7.80 per chat. “Chat is being used…to minimize shopping cart abandonment where a customer has a question prior to a sale,” says Nichols, adding that none of his travel clients are currently using it.
One challenge to implementing chat is hiring agents who can do it, and making them available throughout the long Internet shopping day. And while the goal is for an agent to manage numerous chats at once, this becomes difficult with complex purchases, including travel. “Chat is still unproven in the travel service world,” says Trip Davis, president and CEO of TRX Inc., which handles e-commerce customer service for a number of major airlines and travel agencies. “It should enable a service rep to handle between four and eight customers at one point in time.” But, he explains, a travel agent must be able to focus on a customer’s itinerary, which requires looking up multiple fares and schedules. “For travel service, chat technology is premature,” Davis says. The reservation process “creates the need for one-to-one interaction between a system and a customer and a person and a customer.”
When the results are in, text chat in the travel industry may make more sense for a supplier Web site – airline, hotel, cruise – than an agency processing more complex itineraries. It seems to work wonders for Lowairfare.com, an airline consolidator with limited inventory.
