The verdict is still out on interactive chat agents
U.S. businesses lost more than $6.1 billion (US$) in potential Internet sales in 1999 because of poor online customer service, according to a study by Market Analysis Firm Datamonitor. Statistics like this have prompted many companies to consider improved online customer service technologies, such as interactive chat agents.
Curtis Cole runs a small silk flower business. Key to his business is a laptop computer that serves as his main communication hub for e-mail and Internet connection. When the latest bout of e-mail viruses started making their way around the Web, he decided to upgrade his virus scanning software.
He'd heard that McAffee offers several anti-virus programs that might suit his needs. He checked the Web site and found a subscription-based service appealing. What he couldn't find was information about protection from the latest viruses.
Fortunately, McAffee had recently installed an interactive chat agent, called Lori, that answered his questions while he surfed the site. For Cole, that meant not logging off the Internet to free his phone line. For McAffee, Lori means fewer abandoned shopping carts and less time handling repetitive, routine calls.
An interactive chat agent is an artificial intelligence (AI) program that assists call center agents by answering questions and providing information. Lori, for example, is programmed to answer customers' most frequently asked questions. The purpose of these agents is to increase customer loyalty and reduce the cost of customer interactions.
"Chat agents are comparable to sales representatives," says Tom Rearick, vice president of product development for Sunnyvale, Calif.-based eGain Communications, Inc. "I dislike the term self-service because it's an oxymoron." Still, interactive chat agents are a form of self-service customer care.
Interaction quagmire
U.S. businesses lost more than $6.1 billion (US$) in potential Internet sales in 1999 because of poor online customer service, according to a study by Market Analysis Firm Datamonitor. Statistics like this have prompted many companies to consider improved online customer service technologies, such as interactive chat agents.
Interactive chat agents solve some of customers' poor online customer service experiences, but not all. Customers who find themselves with only the option of using an automated agent may feel their satisfaction is not paramount, according to Bryant Downey, co-founder and CTO of Cincinnati, Ohio-based Cintech Solutions, Inc. "A lot of customers are still not comfortable with chat technologies, and companies don't always use them in the best way," says Elizabeth Harrell, an analyst for Cambridge, Mass.-based Giga Information Group.
"The first moment customers feel they have hit a road block, it has to be a no-brainer for them to reach a live person." Unfortunately, technology often leaves customers to muddle through and find the answers on their own.
"It's very easy to look at technology as a panacea to reduce customer care woes. I think that companies have to be cautious because a certain amount of that personal touch with your customer gets lost when you automate customer care," Downey adds.
On that point, Rearick points to the advantages of automating technology. For example, two-thirds of all shopping carts are abandoned before a purchase is made. He says that when previous client, NextChange, installed a live chat agent, the company saw a 25% drop in shopping cart abandonment.
"Agents divert the first call from the live rep and reduce support costs enormously," says Rearick. But he notes that the agents are not enough to maintain a healthy relationship with a customer. "When customers come asking for help, they are looking for two things: someone to solve their problem, and someone who can fill an emotional need."
Taking on Responsibility
The idea of automation is appealing, but Downey cautions against the effectiveness of technology. "A number of companies are building products that fit into existing CRM systems and putting together a database from the information within that existing system," he says, "but it's a hands-on, and labor intensive process."
He adds that companies have only one opportunity to make an impression with an automated chat agent, and "you either succeed or fail tremendously." Giga's Harrell echoes that sentiment saying, "For customers who can get their answer quickly and easily, automated chat is great. But those customers who can't, will come away more frustrated than they were when they started."
Is the Truth in Numbers?
Statistics from Giga Information Group conclude that the cost of the average voice call is about $10; the cost of a text chat transaction is about $6; and the cost of self-service, which is the category that chat agents fall into, is about $.50 per transaction. However, Downey says those saving are less dramatic when you consider the time needed to implement and hone the technology.
According to research firm IDC, large enterprise contact center CRM budgets are predicted to be more than $12 billion by 2004. Clearly companies will be investing a lot of time, money and resources into their customer service initiatives.
"You're facing a large challenge introducing information into agent technology," he says. It typically takes as much as six months to pull information from disparate sources and make it consistent across the organization. "A lot of benefit is derived from setting up a FAQ and self-help area and trying to unify the way data is entered into those areas before a chat agent technology is implemented," he says.
In theory, automated chat agent technology is an excellent resource for companies that have a large number of repetitive contacts with their customers. However, as Downey pointed out, caution should be exercised when deciding if agent technology is right for your company. "Look at your own assets, and then find a vendor that can help you build on those assets," says Downey.
Jerri L. Ledford has been a freelance journalist specializing in technology for more than seven years. Contact Jerri at: JerriLedford@cs.com.
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