December 26, 2000, 9:55 AM

Web chat is the latest boom in e-service. But what does it do for your bottom line?

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Vendors have taken a Web hallmark-the chat room-and adapted it for use in call centers and other operations, where reps can handle two to six sessions at a time. Depending on the software, a retailer can carry on a live conversation with a customer and take control of the shopper’s browser to point out product features, send supporting information or suggest accessories.

Customers entering HelpLive at Rock.com choose one of four options-order status, finding music, technical help or general questions. Agents not only see the customer’s click stream but have some idea about the question being put to them. If Macklin’s staff is busy handling other sessions, would-be chatters enter an automated queue that tells them what’s happening and gives them material relevant to their questions. Once inside the session, a shopper having trouble finding an item or filling out the order form can get that assistance. Many systems offer a routing feature that directs customers to agents who handle certain requests or problems especially well.

1-800-Flowers, one of the first e-retailers to take the interactive plunge in 1998, worked with eShare Technologies to retrofit the software maker’s chat room application for e-commerce. “When eShare came to us, they had no product,” says Sharon Cain, project manager for interactive services. “We were the guinea pig, but there was no one offering this. Anything was something better than what we had.”

Eight months after its staff sat down with eShare, 1-800-Flowers went live with the chat feature and saw its e-mail volume drop by 40%. In a year’s time, the software has undergone two major upgrades. These improvements have given telemarketers more functionality in pushing pages to customers and managers more reports for tracking how the system is used.

An ongoing issue is that call center staffers trained to speak well often don’t write well. Even though customer service reps who regularly handle chat sessions are the floral and gift retailer’s most highly skilled and can draw about half of their replies from a database of boilerplate content, the upcoming holiday season will require more than twice as many staffers. That’s led 1-800-Flowers to begin looking for an English teacher to train seasonal agents on the ins and outs of grammar and punctuation.

Seasonal demands aside, having an existing customer support operation has made all the difference in deploying Web chat, says Chris McCann, senior vice president at 1-800-Flowers. “We realized, in terms of our customer service strategy, that we had a strong advantage with a call center already in place.”

A customer service strategy is where e-retailers need to start, says Erin Kinikin, an analyst with Giga Information Group. Simply tacking on Web chat and other products as stand-alone features usually means they’re operated by separate staffs and prone to customer service mix-ups when one part of the operation isn’t aware of previous phone calls or e-mails to another part. All pieces need to share a database rich with customer histories. “Interactive customer service is really a portfolio of technologies,” Kinikin says. “And customer service is more and more about matching the appropriate technologies to the appropriate customer. The differences in cost are dramatic-from pennies per customer for self-service to nickels or quarters for e-mail, to tens of dollars to talk to a live person.”

Even among companies heavily marketing Web chat products, the choices vary widely. Products range from hosted services available for $250 to $600 monthly per service rep to robust enterprise systems that cost $100,000 or more and feature Web chat, e-mail management and call center tie-ins. But for the moment, forget about a single customer service solution. “No one vendor,” says Kinikin, “provides all functionality across all channels.”

A few companies, like eGain, Acuity of Austin, Texas, and Genesys of San Francisco, offer a broad suite of e-service technologies, minus call center automation. Customer management vendors like Silknet Software and Octane Software also have moved into the market with new Web and e-mail products. The latter vendors, says Kinikin, “really do the best job of covering the gamut, but their Web products aren’t very deep and may have scalability problems. Silknet’s system has some Web collaboration and can answer e-mails, but it can’t automatically suggest replies. And Octane won’t have chat until the end of the year.”

For now, most of the action in customer service is occurring among niche players, like eGain, FaceTime, eShare, LivePerson, Webline and Aspect Telecommunications. With Y2K cramping resources this year, many retailers have turned to these vendors to turn on chat alone. That’s made outsourcing especially popular. More than half of eGain’s clients, are part of its hosted network. “The niche players are growing faster than the enterprise players for now,” says Tim Harmon, vice president at the Meta Group in Burlingame, Calif. “But there are no real leaders, and the smaller players will be gobbled up. The niche vendors will either be acquired or will extend their offerings to compete successfully.”

In fact, an integrated market is already starting to take shape. EGain’s acquisition of Sitebridge improved its capabilities to link browser to browser. The combined company, though still lacking a call center product, “can pipe any online request into a call center infrastructure,” says Harmon. Acuity, thanks to its recent purchase by Quintus, stands to go further by integrating its Web-centered products with its new parent’s customer support software tying call centers and e-mail systems. Similarly, Melita International, a telephony systems company based in Norcross, Ga., acquired eShare earlier this year.

What these companies see, Harmon and Kinikin say, is the bigger picture. Customers not only expect fast answers but good answers that put earlier contacts in context-whether e-mail, a phone calls or chat sessions. A database combining all three is a powerful tool for understanding what customers want and what will motivate future purchases. “Most retailers deploy new applications independently-they’re just trying to fix a problem,” says Ryan Rosenberg, vice president of marketing at eGain. “They fix the problem, but don’t move on to the opportunity.” •

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