Online 'agents' evolve for customer service

April 2, 2001 —

SHOPPING AT HOME on the Internet offers many advantages, not the least of which is avoiding holiday mall traffic in December. However, filling out your holiday list at home has its drawbacks too -- namely the lack of customer service.

More and more, e-tailers are looking to answer customers' questions in timely and increasingly human ways. Online customer service agents are springing up all over the Web, and although the technology is in its infancy, the future looks bright.

"Right now it is a very niche type of thing, and it often is implemented quite badly, which gives [online agents] a bad rap," says Robert Mirani, a research director at The Yankee Group, in Boston. "But if you're providing support and a customer has a problem, the [online] personality can narrow down the problem, at the very least. Even if you don't get it solved, at least when the customer calls for help, it eats up less time and cost."

Online agents have evolved in complexity beyond the Ask Jeeves model, in which a user types a question and, if it is understood, the search engine generates a list of related URLs.

One company investing heavily in a newer version of the agent concept is Finali, whose "socially intelligent," automated netSage technology anticipates users' needs, based on where they go on a Web site. Finali's agents have been used on a trial basis on Dell's site and are assisting customers visiting luggage e-tailer ebags.com this season.

Finali's offering represents a step forward. The Denver-based company's SageServer hosts netSages, who greet customers, gather marketing data, guide users across the Web site, offer FAQs and order-status reports, and put customers in touch with support representatives at any point in the transaction.

"You don't type questions and have it read them," says Finali President and CEO Bob Burgin. "In this social interaction model, the agent offers to help you with things it already knows the answer to."

The new breed of agent is highly customizable, allowing e-tailers to brand them as they wish. The "agents" also aim to assist and reassure customers by emoting: If an agent can't answer a question, it expresses disappointment and tries again or it pushes the user toward another channel of service. If the customer expresses interest in a product, the agent can suggest related items. If a transaction is completed, the agent can thank the customer and urge him or her to come back soon.

Finali and other companies, such as eGain and NativeMinds, are blazing a trail in adding social interaction to search and online support, but it's an area that still needs to mature, according to one CRM (customer relationship management) analyst.

"If you implement the ability for a Web site visitor to chat with a person on the other end, you can really control that. The person on the other end can recover if there's a mistake," The Yankee Group's Mirani says. "With a virtual personality -- a bot or a chatterbot or whatever you call it -- if it fails, it doesn't recover very gracefully."

Online agent vendors are hoping their technology will address two chief issues: getting potential customers to become customers, and cutting the costs associated with servicing those customers.

According to Ashu Roy, CEO and chairman of Sunnyvale, Calif.-based eGain, two of every three online shopping carts are abandoned with no purchase. One of eGain's customers, syndicated e-commerce site Nexchange, has seeen instances of shopping cart abandonment drop by 30 percent since deploying eGain's online agent technology. CEO Del Ross says the online agent was a key factor.

"Ideally, you'd like a human to greet everyone who comes into a store, but obviously that's not economically feasible," Ross says.

Atlanta-based Nexchange's experience with eGain Assistant is proof that online agents are moving to the front end of multichannel CRM systems, Roy says. "Extensions of existing telephone-centric service software platforms are not going to be feasible for the escalating demands of the Internet and Web service communications," he says.

As for cutting costs, Finali's Burgin repeated one tantalizing key statistic: After implementing Finali's online agent technology, clients have seen the average cost of service calls drop dramatically. The average call to a live customer service representative averages about $4, he says, whereas each automated interaction costs about a quarter.

Online agents' role in CRM should continue to grow, analysts say, as e-CRM vendors enhance the technology by incorporating more social interaction functionality.

InfoWorld