In its second-largest acquisition, Amazon buys the company for $970 million.
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“The individual turned out to be a wonderful actor. He was credible, and he was able to come up with poses and gestures that were striking and engaging enough so that people just smiled when they saw him on the site,” says Reeves. That actor got the job: he’ll be “The Product Adviser” when Dell rolls out the application for general use on its web site in several weeks.
Hold the ham
Finali has learned from virtual agents that predated NetSage. Remember the animated paperclip? It broke the rules of social behavior by interrupting unasked, and doing it over and over. Shoppers will have to choose to engage NetSage where it’s offered, and the figure is equipped to guide users to live chat or live phone help at Finali’s customer contact center as needed.
Still waiting to be answered is an interesting set of questions on what happens when a virtual technology that strives mightily to approximate a real human-to-human conversation runs up against its unavoidable physical limits. With all videotaping of the actors completed within one or two days, for example, a NetSage’s entire repertoire, look, and clothing are fixed in time. Will regular users expect the Sage to grow and change as time passes?
“A lot of the failure of these kinds of virtual social interactions has been in having the same character say the same thing at the same moment over and over again. There’s nothing socially pleasing about that,” says Reeves.
Buy.com tackles that problem by updating “Ian Stone” regularly, says Brent Rusick, Buy’s senior vice president of operations. “On a quarterly basis, we change what Ian does and expand the role the Sage plays. And though we’re not developing it right now, a logical progression for the use of the Sage on our site would be to move it out of the help area into the sales area. That’s where we see this technology going.”
NetSages either up on sites now or in development interact with users in text. Voice can be added, says Reeves, but that raises question about the extent of broadband access on the user end, and whether voice is always a good idea. “One of the largest errors companies are making in this arena is using all the bandwidth available for voice and full motion. The figure might tend to be a little more socially present than the user might want,” says Reeves.
Nevertheless, Reeves sees “unlimited” potential for the humanized presence in e-commerce. “Wherever social interaction works in commerce in real life, it could work in automated versions as well,” he says. “It tends to work well for interactions that have a bit of complexity. Filling out a long form, for example, is one of the hardest things to do on the web. A social presence can get people to stick with the form longer, or work through an error; it can encourage people that they’re doing great and that there are only two more pages to go.”
Deflecting customer calls
From the perspective of Jon Acton, director of benchmark research at Purdue University’s Center for Customer-Driven Quality, and a board member at Benchmark Portal Research, NetSage is already starting to answer one of the most critical questions for retailers: does it save labor and therefore money?
Retailers can expect to pay upfront to get into the game, in addition to paying ongoing monthly fees. There’s a one-time implementation fee of $50,000 to $70,000 that covers the cost of developing a NetSage solution specific to the client’s goals and using tape from the stock library. Going beyond the library to cast and tape a new NetSage adds another $10,000. In addition, there’s a volume-dependent monthly charge per interaction with the Sage that amounts to “pennies per use,” says Don Runyan, Finali’s president.
There’s also a monthly $5,000 to $10,000 fee for Sage “optimization,” basically, refinements to the Sage’s programming based on customer interactions of the previous month. The goal is increasing the Sage’s effectiveness to further reduce reliance on more expensive live help. “You continue to develop intelligence about how the customer shops and as you do, you want to include thayt is the Sage so it continues to provide the right directions to customers,” says Bill Duclos, Finali’s vice president of operations.
Finali’s customer contact center, to which the Sage hands off queries it can’t handle, charges the company a monthly fee depending on use.
To the bottom line
Those charges add up fast, but so can ROI. According to Finali, Buy.com already has exceeded the break-even point on its investment in “Ian Stone,” a character from the stock library. “Some technologies focus on how to answer calls more efficiently, but this model is built on avoiding calls and e-mails altogether,” Acton says. “I’m working with a retailer right now that gets 20,000 e-mails a day. Sure, you can go to the frequently asked question area and try to figure things out, but what a rats’ nest it usually is trying to figure out which question applies in your case. If a technology like Finali’s could save 10% of those e-mails from coming at a cost of $5 to $10 per response, that saves as much as $7.5 million a year and that money drops directly to the bottom line. If that happens, I’ll become a raving fan.”
Such gains will require flawless execution from Finali and any others in the space, based on science that’s only just beginning to be applied online. “This technology turns up the volume on social interaction online. That means it turns up the volume on the potential to lead to great things as well as bad ones,” Reeves says. “We’re working to make certain that when that social bandwidth is increased, we’re headed in the right direction.”