Web serviceswhitepaper

The Insider’s Guide to Next-Generation Customer
Service on the Web

by Greg Gianforte, RightNow Technologies

 2002 RightNow Technologies, Inc.

Contents

Executive Summary ........................................................................1
A Changed World ............................................................................2
Great Expectations ....................................................................2
First Generation: Static, Internally-Driven Information ....................3
Second Generation: The Email Black Hole ......................................3
The Next Generation: Immediate Answers Online ...............................5
The Future of eService .....................................................................7
About the Author ............................................................................9
About RightNow Technologies ...........................................................9


Executive Summary

Superior customer service is a critical differentiator in an increasingly
competitive marketplace. Companies that give customers what they want
when they want it will increase customer satisfaction and ultimately gain
greater marketshare, generating more revenue and enjoying higher
profitability. But how do you deliver extraordinary customer service within
the real-world constraints on your human and capital resources?

For more and more companies, the answer involves the Internet. These
companies – which range from those with fairly conventional business
models to those using the Internet as their primary vehicle for delivering
their products and services – have discovered that the Web can play a key
role in the delivery of superior customer service. They’ve also discovered
delivering customer service via the Web is remarkably cost-effective.

Actually, no one really has a choice whether or not to provide
customer service on the Web. Customers already made that decision for
us. The Web is where they go first. Before they pick up the phone or send an
email, they check the Web site. And, as time goes by, that tendency will only
increase. Companies that don’t respond to this trend will clearly suffer.

Web-based customer service, however, presents challenges as well as
opportunities. Web customers have very high expectations when it comes to
getting fast access to accurate information. The Web is also a 24x7 medium.
So online customers expect superior service day or night. Companies that
successfully satisfy the heightened expectations of online customers
gain a significant competitive advantage over companies that fail to
do so. And they can make huge productivity gains at the same time.

This paper briefly describes the business changes triggered by the Internet
and the resulting emergence of the Web as a primary channel for customer
service. The new demands of customers require the use of new Web
customer service solutions. Business leaders who want to succeed in the
rapidly evolving business environment must embrace these solutions in order
to satisfy the growing number of customers who turn to the Web first when
they have a question or problem.

1

A Changed World
With the advent of the Internet, the dynamics of business have changed
forever. Traditional business influences and differentiators such as location,
convenience, and switching costs have become much less relevant. For
businesses and organizations around the world – from banks and mortgage
companies to manufacturers, universities and service companies – the
playing field has been quickly and radically leveled.

In the new business environment, one of the only ways left to differentiate
your organization from the competition is the quality of your customer
service. Superior service gives customers a real reason for doing business
with you. That’s why industry analysts agree that Internet-based customer
service (also known as “eService”) is one of the biggest and most crucial
opportunities available on the Web today.

Great Expectations
The key to taking advantage of this eService opportunity is to meet the
increased expectations of today’s Web-connected customers. In addition to
seeking products and services that are better, cheaper and more convenient,
online customers are also looking for impeccable service. That’s why any
company with a Web site must provide eService that’s 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 anything else.

• 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 their eService content is driven by
the actual questions their customers have most – not by what
company staffers think customers might be most interested in.

eService that lacks one or more of these qualities will fail. Frustrated
Web site visitors will click elsewhere in search of good service. Or they’ll pick
up the phone – thereby driving customer service costs higher than they
would be if customers could find answers to their own questions online.

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eService that succeeds in all these areas, on the other hand, has already
been proven to result in increased sales, more repeat business, greater
brand awareness, and ultimately, stronger customer relationships and
loyalty.

Virtually every business and organization benefit from superior Web
customer service. Unfortunately, many companies have failed to evolve their
eService strategies to meet growing customer expectations. These
companies are typically stuck in first- or second-generation content
paradigms.

First Generation: Static, Internally-Driven Information

Most companies initiate their online presence with static information. This
first-generation content typically includes such basic content as phone
numbers, addresses, and fixed text taken from brochures and other
promotional materials.

While this was a useful approach in the early days of the Web, it has become
counter-productive. First of all, it serves the marketing needs of the company
rather than the service-and-support needs of customers. Customers need
answers to very specific questions that are often not anticipated by
the authors of marketing materials. Second, Web visitors quickly notice
whether or not the content of a site changes over time. If they see that the
content is always the same, there is little chance they will return to the site
for new information. Finally, first-generation sites typically have only the
most rudimentary search capabilities – if they have any at all. So, even if the
information customers seek is on the site, there is little chance they will find
it quickly.

Thus, an exclusively first-generation approach to Web site content will
actually drive customers away from the site and force them to regularly use
slower, less cost-efficient communications channels.* Frustrated Web site
visitors are easily lured by competitors offering better, fresher information
online.

Second Generation: The Email Black Hole

As organizations begin to experience more traffic on their Web sites, they
typically enter a new phase in their approach to online customer service.
This brings about a second generation of Web service – one that relies on
email management and manual knowledge bases. Customers browse around
the site and soon abandon their search, so they hit an email or “Contact Us”
button and submit their question or issue. These emails are gathered in some

*
Studies by Forrester Research, Harvard University and others indicate that answering a
customer’s question on the Web site costs a company less than a dollar – while taking a phone
call or answering an email can cost $20-30 or more.

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generic mailbox for routing to the appropriate customer service
representative.

Almost without exception, this email load rapidly becomes a customer service
disaster. As more customers visit the site, more and more emails are
generated. The volume of emails quickly overwhelms the limited
support staff responsible for answering them. Customers wait days for
answers to even the simplest questions. Sometimes, the answers never
come. Again, rather than becoming a vehicle for improved customer
satisfaction, the Web rapidly becomes a vehicle for customer dissatisfaction.

Remarkably, even today’s more Internet-savvy companies are stuck in
second-generation mode. Their online success bears the seeds of their online
failure, as email response becomes an increasingly intractable bottleneck.

Although email communication is an essential element of any effective
customer service solution, it’s important to note some basic truths about
second-generation, email-centric eService strategies:

1) Email inquiries are a symptom of ineffective Web content. Large
volumes of email result from online customers not being able to find
the answers they need. In other words, improved Web site content is a
better cure for email backlogs than mere improvement in email
management.

2) No matter how fast you respond to an email, you’re still trying
to play catch-up. Even if you respond to an email within 2-3 hours,
you’re still not coming close to the level of service you would have
provided if you had been able to answer the customer’s question on
their first site visit. So you’re giving the customer 2-3 hours to be
dissatisfied and check on what the competition has to offer. Of course,
in most cases, companies don’t respond that quickly. So they allow
customers a day or more of unhappiness and comparison shopping.

3) If you respond to emails manually, you’re spending much more
money per incident than you would if you had answered the
question on your site. While somewhat less expensive than a phone
call to a toll-free number, manual email replies are still costly in
comparison to today’s effective eService content systems. Thus, again,
the solution to the problems faced by second-generation sites has
more to do with better content than it does with better email
management.

This last point highlights a more general problem with most companies’
overall customer service strategies: over-reliance on manually managed
knowledge bases. These knowledge bases typically consist of information
gathered from the organization’s internal subject-matter experts. While
somewhat useful, such a knowledge base has several inherent weaknesses:

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• Conventional knowledge bases are internally driven, which means they
do not adequately reflect the real day-to-day questions that customers
have on their minds.
• Conventional knowledge bases are expensive and time-consuming to
develop and maintain.
• Without diligent and constant management, such knowledge bases
quickly go out-of-date, which means they contain information that is
no longer valid.

For organizations to graduate from fundamentally flawed second-generation
eService, they must re-examine how they implement and manage their
support and service knowledge bases. They must also look for new ways of
making the information in those knowledge bases accessible to their
customers online.

The Next Generation: Immediate Answers Online

The next generation of eService addresses the shortcomings of earlier online
customer service strategies, allowing organizations to take full advantage of
the Web. This next-generation approach is already being used by companies
in every market segment to both improve service and realize significant cost
reductions.

Three characteristics distinguish these new, more effective eService
strategies from their predecessors:

Automated, “self-learning” knowledge base technology ensures
customer-driven content
Rather than forcing internal support staff to try and guess what customers
want to know, next-generation eService solutions implement advanced
knowledge base automation technologies to let customer queries themselves
drive online content. Every time a customer asks a new question, a
knowledge item is added to the Web site. This results in five powerful
benefits:

1) It ensures that every issue of concern to customers is immediately
reflected on the Web site.
2) It allows organizations to “seed” their eService content with just a few
knowledge items and “grow” it from there over time – instead of
having to undertake a massive and costly project to build some kind of
comprehensive knowledge base before they launch their eService
solution and start enjoying the benefits of eService.
3) It dynamically captures all the relevant knowledge in the heads of
customer service representatives (CSRs) and subject-matter experts,
so they only have to answer each question once.
4) Consistent information.

5

5) Prevents knowledge from being lost when a valuable employee leaves
the company.

This transfer of knowledge from the minds of internal staff to a company’s
eService Web site seems simple, but it is an extremely powerful strategy for
reducing costs and improving service.

The use of advanced, automated search and content organization
techniques to ensure ease-of-discovery by customers
The good thing about organically building an eService knowledge base is
soon you’ll have up to 90% of the answers your customers want on your site.
The bad news is, without the right search and browsability features, finding
those answers will be like looking for a needle in a haystack.

Current innovations in knowledge base management, however, allow you to
easily overcome this problem. This is done in several ways, including:

Dynamic ranking of knowledge items by frequency of use
If large numbers of customers ask the same three of four questions
when they come to your site, then it’s clearly logical to put those
answers at the top of your eService content so that they will be the
easiest to find. By tracking the behavior of site visitors, it’s a fairly
simple matter to make this happen. Also, customer needs change over
time. For example, a retailer might get more questions about returns
in January than in July. Dynamic ranking accommodates such changes,
so that the site’s eService content continues to reflect the present
needs of customers.

Natural language, “fuzzy” logic and other search techniques
Most sites have very weak searching capabilities. But there is a wealth
of readily available technologies that help customers pinpoint specific
knowledge items even when they aren’t sure of the exact search terms
to use. These natural language and “fuzzy” logic tools create a high
comfort level for customers who are in the midst of trying to solve a
problem and solve it quickly. They also keep customers coming back to
the site for service – resulting in higher long-term cost reductions.

Intelligent content categorization
Just as it’s difficult for a company’s internal staff to fully anticipate
exactly what kinds of questions customers will have, it’s also tough to
anticipate exactly how they will logically group knowledge items and
topics. But this kind of logical grouping is crucial to the browsability of
the site. Therefore, rather than arbitrarily creating categories and
forcing customers to guess what headings or sub-headings a given
item will fall under, today’s most successful eService sites track
customer behavior on the site and categorize content based on those

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behaviors.* This further speeds eService and reduces potential
customer frustration.

Leveraging the knowledge base across multiple channels
In addition to presenting immediate answers to customers on the Web,
this type of powerful, comprehensive and easy-to-search knowledge
base serve other purposes as well. It is ideal for automating replies to
customer emails – reducing the need for CSRs to do so manually. It’s
also extremely useful for the CSRs themselves to quickly find answers
for the customers they’re helping, whether they’re doing so by email
or by phone. Armed with such a knowledge base, even brand-new
CSRs become extremely productive right away. Smart companies
understand this and leverage their eService knowledge base across all
their service and support channels.

Using these simple but powerful techniques, organizations of all types and
sizes transformed their Web sites into highly effective customer service
channels. In fact, a recent study by the independent research firm
Doculabs found companies implementing next-generation eService
solutions have been able to answer more than 86% of their Web site
visitors’ questions online without the need for additional human
intervention. In other words, with the right eService knowledge base
automation technologies, you can solve almost 9 out of 10 customers’
problems. That’s a remarkable finding. And it’s been corroborated in case
after case.

Clearly, the time has come for organizations to re-evaluate their Web service
strategies. With the substantial bottom-line returns it has been proven to
deliver, next-generation eService is perhaps the most compelling technology
investment available today. And with customer satisfaction foremost in the
minds of market-savvy executives, eService has become much more than
just a “nice-to-have.” It is an indispensable tool for capturing and retaining
marketshare in a fiercely competitive global business environment.

The Future of eService

As companies enjoy the benefits of effective eService – and as customers
become more and more used to finding the answers to their own questions
online – eService will certainly continue to evolve. This evolution will be
characterized by even higher statistical efficiency in the percentage of
questions answered and even lower per-incident costs. It will also be
characterized by a more engaging and interactive end-user experience.

*
For example, if customers want to find information on your site about “late fees” first look
fruitlessly under “payments” before finally finding it under a “terms and conditions” heading,
then it makes sense to move that knowledge item under the heading where the majority of
them searched first, i.e. “payments.”

7

Some trends that are already starting to emerge include:

The rise of live chat
Internet users are becoming more accustomed to text chat online, especially
through the growing popularity of instant messaging. This will make live chat
an increasingly useful communication channel for customer service. CSRs
respond to site visitors while they are browsing, quickly providing needed
tips or advice so the customer successfully continues his or her self-directed
online service session. Live chat may also be complemented with co-
browsing techniques, whereby CSRs can see what the customer is currently
seeing and direct them to an appropriate page or link.

Special-purpose eService content
In addition to text-based knowledge items, companies will make greater use
of other types of useful eService content. One example of this that is already
becoming quite popular is the map/location-finders. These tools give
customers a visual presentation (as well as driving directions, in some cases)
of a local retailer or distributor. Presenting this information in the form of a
map, rather than a mere street address, makes it more compelling and
increases the likelihood the customer will actually end up at the location to
make a purchase. Streaming video and other multimedia content will also
likely become part of the online customer service experience.

Wireless support
As the Internet extends beyond the wired desktop, so too will eService. This
will lead to an even greater ability to deliver accurate answers to customers
on an anytime/anywhere basis. It will also allow organizations to further
leverage their investments in eService knowledge bases.

Customer service organizations that fail to embrace evolving eService
technologies do so at considerable risk. It is common knowledge that it often
only takes one bad service experience to lose a customer for life. eService
provides the most effective means of reducing that risk. Forrester states,
"To compete, companies will need effective channels of communication with
customers - giving customers a choice of when and how they interact with
the company." Fortunes will be made and lost based on the ability to satisfy
customers on the Web. Those who rise to the challenge and take advantage
of eService to achieve competitively superior customer-focused Web
strategies will emerge as the ultimate winners in the global online
marketplace.

8

About the Author

Greg Gianforte is founder and CEO of RightNow® Technologies, a Bozeman-based
provider of Web customer service systems. Greg holds a BE in Electrical Engineering
and an MS in Computer Science from Stevens Institute of Technology. He has taught
Computer Science at Montana State University as an adjunct professor. Greg co-
authored Reducing the Cost of LAN Ownership and The Business of Running a Network
published by Von Nostram. Prior to RightNow Technologies, Greg was founder and
CEO of Brightwork Development, a LAN Management software pioneer acquired by
McAfee (now Network Associates) in 1994.

About RightNow Technologies
RightNow Technologies is a leading global provider of proven eService solutions that
deliver rapid time-to-benefit and quick ROI. RightNow’s comprehensive eService
solutions include Web-based self-service, email response management, live chat and
collaboration, and service analytics. These solutions feature integrated product
architecture, highly intuitive interfaces, and centralized workflow management – all
based on a proprietary customer-driven, self-learning knowledge base.

RightNow also offers a Web-based location tool, RightNow Locator, which directly links
a company’s Web presence with its real-world locations, providing customers the
information they need to purchase products or obtain services locally.

RightNow customers include Air New Zealand, Ben & Jerry’s, British Airways,
Enterprise Rent-A-Car, Fujitsu, Maxtor, Nortel, Orbitz, Ping Golf, Remington, Sanyo,
Social Security Administration, Sprint, and more than 1,100 other organizations in a
wide range of vertical markets.

Founded in 1995, RightNow has offices in Bozeman, Dallas, London, and Sydney, and
an associated office in Tokyo. RightNow’s products are available in 15 languages
worldwide. For further information visit www.rightnow.com or email
info@rightnow.com.

Headquarters United Kingdom Office Australia Office Japan Office
RightNow Technologies, Inc. RightNow Technologies (UK) RightNow Technologies Mitsui & Company, Ltd.
40 Enterprise Blvd. Ltd. (Australia) Pty Ltd. Mitsui RightNow Technologies
PO Box 9300 1st Floor Level 15 IT Solution Division
Bozeman, MT 59718-9300 58 Herschel Street 99 Walker Street 2-9 Kanda Nishiki-cho
Slough, Berkshire North Sydney, NSW 2060 Chiyoda-ku
Main Phone +1-406-522-4200 SL1 1PG Tokyo, Japan
Toll Free 1-877-363-5678 Main Phone +62 2 9657 13 66 101-0054
Fax +1-406-522-4227 Main Phone +44 (0) 1753 89 Fax +62 9657 13 53
4900 Main Phone +81 3 3233 2130
Fax +44 (0) 1753 89 4901 Fax +81 3 3233 2150
Dallas Office
RightNow Technologies, Inc.
1501 Luna Road, Suite 138
Carrollton, TX 75006

Main Phone +1-972-323-5600
Toll Free 1-877-277-3898
Fax +1-972-466-0752

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