Online service: A change worth chatting about

Staples, a four-year veteran of chat, and Overstock.com, which just added proactive chat technology, are two of the enterprises who have seen success with the online channel. It's a technology ripe for innovation, according to one analyst.

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Visitors to the Overstock.com Web site get more than access to discounted items. When they run into trouble, they get online agents helping them through the process.

Initiating a chat session with a customer proactively can be effective if it's done right, but businesses need to be wary of being intrusive, said John Ragsdale, research director with Cambridge, Mass.-based Forrester Research.

While chat remains predominantly a "save the sale" technology, businesses and vendors alike are beginning to innovate, said John Ragsdale, research director with Cambridge, Mass.-based Forrester Research. For example, financial services are beginning to see chat and Web collaboration tools as an avenue for wealth management services. Typically, customers would go into a bank branch, meet with a financial adviser and discuss options. With chat and collaboration, a customer can work from the comfort of home with an online agent to assemble a financial portfolio.

The advances in chat and collaboration do create some potential pitfalls, however. In fact, Ragsdale predicts that 2005 will see the first major consumer lawsuit over "e-slamming," a term used to describe what happens when a customer's long distance service is switched to another provider without that customer's permission.

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Many of the collaboration tools currently in use don't offer an audit trail, so an agent who gets incentives based on sales can continue to enroll customers even after they've abandoned the session.

"We have some interesting consumer issues there," Ragsdale said. "Until someone gets burned I doubt there's much that will change."

Chatting up the B2C crowd

Chat technology, however, remains most firmly entrenched in large business to consumer organizations. Framingham, Mass.-based Staples Inc. has been using chat for the past four years and currently has seven pages on its Web site where customers can request to chat with an agent. Staples plans to increase that to nine pages with a new site design.

The search results, check out and review order page are areas where customers tend to have the most questions. According to Woodard, adoption of the technology by customers has been promising. However, it is difficult to determine how much money the technology saves the company by intercepting calls to the call center, Woodard said.

"These tend to be immediate questions, not the type that they would send an e-mail about," he said. "We think there is some migration from phone to chat but the important part is making the online experience easier."

Staples runs a chat application from Mountain View, Calif. -based eGain Communications Corp. which allows the company to measure chats per hour and handle time that helps determine staffing. However, the company also tracks user experience metrics, such as the quality of experience and whether or not the customer's question was answered, more closely than call deflection.

Yet, call deflection may be a misleading metric, according to Ragsdale. While chat is generally considered far less expensive than a phone call, at least a phone call provides immediate interaction. Chat can require an agent to wait two or three minutes for a response. Additionally, while agents may be able to handle several phone calls at once, the handle times for chat run much longer.

Getting proactive

Salt Lake City-based Overstock.com's proactive chat approach is already paying off, said Tad Martin, vice president of merchandising and operations for the discount online merchandiser.

Overstock.com uses technology from New York-based LivePerson Inc. with a rules engine based on certain online scenarios. For example, a chat window appears to ask customers if they need help in the event of an error message on the checkout page. Currently, the customer service department determines how the rules engine is applied but it is done in collaboration with the marketing department.

According to Martin, Overstock.com measures how many customers accept chat invitations, how many are converted into sales and the net benefit. The company also offers "click to chat" functionality and roughly 10% of contacts go through the chat channel.

The staffing problem

Adding chat technology to a business, whether customers demand it or not, creates more headaches for the call center manager who needs to find new staff.

There are very few companies with a blended workforce that can alternate between chat, e-mail and phone, Ragsdale said.

Overstock.com staffs roughly 50 agents for proactive chat a day. Agents begin learning inbound phone skills, move on to e-mail response and are eventually trained on chat. Better performing agents are then offered the opportunity to move to proactive chat.

Chat also offers a unique opportunity to capture customer feedback, Martin said. In fact, buyers for Overstock.com meet weekly with teams of agents to learn more about customer buying behaviors and the company has access to all the online conversations.

Staples.com also has a dedicated chat team.

"It's a very different medium," Woodard said. "When you're first deploying it, you have to change your mindset from a contact center mentality. Grammar and spelling count but it's a live medium. We knew from the beginning your best e-mail associates are best at chat."

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