By CIOinsight

Bad E-mail Response Equals Bad Customer Relations




Customers expect swift responses to e-mails, and they are often disappointed.

It was a cold January afternoon, and Martha Rogers was shopping online for garage shelves at Target.com. She was ready to process the order when she realized that shipping charges for the $800 shelves totaled $400. So Rogers sent an e-mail asking if she could pick up the shelves at a nearby Target store, instead. She didn't like the response. "After a few hours, I received a canned message about how shipping charges are determined," she says. "It didn't address my question at all."

The scenario would probably annoy any shopper. But Rogers, coauthor of Return on Customer: Creating Maximum Value From Your Scarcest Resource (Currency, 2005), and a principal of the Peppers & Rogers Group, a Norwalk, Conn.-based consultancy that helps companies improve customer relations, found the e-mail particularly infuriating. "I know how these systems work," she says. "It saw the word 'shipping' in my message, and sent me the pre-written response. But that's not what my question was about. It's insane that companies aren't better integrated than this."

Rogers' frustration is understandable. While email is the fastest-growing channel for customer service, expected to increase from 2.9 billion messages in 2005, to 7.2 billion by 2010 (according to Zach McGeary, an analyst at Jupiter Research), a third of all U.S. companies don't even bother to open the customer e-mails they get, let alone respond to them. Meanwhile, roughly 45 percent of companies that do answer e-mail take up to 24 hours; the rest can take as long as three days. The reason, says McGeary: Only about 25 percent of all U.S. companies have deployed an email response management system. "Companies aren't investing in the appropriate technologies," he says. "They are still relying on Outlook or other homegrown applications."

Unfortunately, software alone isn't the answer. While e-mail response systems are designed to cut costs by automating message routing, either to live agents or with an instant response to the customer, they have a host of limitations. Most cannot handle more than one query per message, leaving customers to either resend their query or pick up the phone—exactly what these systems are meant to prevent. In fact, according to a 2005 survey sponsored by the International Customer Service Association, most companies that provide e-contacts never see a decrease in telephone call volume. Moreover, automatically generated e-mail answers are often wrong, because the system merely looks for one or two keywords instead of understanding the nature of the actual query. Finally, these systems rely on knowledge management systems to route messages and generate responses. That's great if such a system already exists, but not so great otherwise. That's why virtually all companies that use these systems must continue to rely on live agents.

ERM systems can offer definite advantages, as long as they are properly designed and managed. The real value of these systems lies not just in the ability to bypass agents, but also in speeding up the routing process through automation and the ability to track results. ERM systems can generate reports about e-mail traffic volume that can help companies make better workforce planning decisions, and help agents better assist customers by providing information that's more relevant. A good ERM system can even gather data that can be used to offer better products and services, though few companies have yet to reach that level of sophistication.

Ask your call-center manager:
  • How many customer e-mail inquiries do we receive, and how quickly do we respond?

    Ask your COO:
  • Do we need an e-mail management system?



    A successful ERM system hinges on knowledge management—and timely human interaction.

    When it comes to customer service, companies face a Catch-22. While the goal is to steer customers away from the telephone (which can cost anywhere from $15 to $40 per call), often the opposite occurs. "Here's what happens," says Rosanne D'Ausilio, an industrial psychologist, and author of Customer Service and the Human Experience (Champion for the Human Press, 2006). "I send an e-mail, and I get back a near miss. Maybe it answers one of my questions, but not all of them. So I pick up the phone and call the company. The agent who answers has no idea what I have already gone through. This drives up costs, and leaves customers angry."

    Most companies strive to solve customers' inquiries with just one interaction, known as first-call resolution. According to D'Ausilio, the best companies have a first-call resolution rate of roughly 86 percent. But, she says, "What does that remaining 14 percent cost? It could easily be in the millions." D'Ausilio isn't exaggerating: According to a 2005 study by the International Customer Service Association, fully a third of all customer inquiries took more than six tries to get a satisfactory response, involving multiple e-mails and telephone calls. That can quickly eat up any gains from an ERM system.

    In a perfect world, an automated e-mail response system would accomplish three things: First, it would send an acknowledgement to the customer, letting him know his message had been received and a response is on the way. Second, it would figure out what the customer had asked, by picking out keywords. Finally, it would either send a pre-written response directly to the customer, or direct the problem to a live agent. But even in that perfect world, the system can only operate on information that already exists in its database, which means that the true success of any ERM system depends on the breadth of the company's knowledge management system. In fact, says Jupiter's McGeary, creating a knowledge base that answers basic questions (such as product information) could reduce e-mail inquiries handled by agents by 15 percent. If such a system doesn't exist, companies can use a pre-built knowledge base offered in most ERM software applications (which will need to be customized) or build one on their own—an arduous task to say the least.

    That's the strategy at Cabela's Inc., a $1.6 billion sporting-goods retailer based in Sidney, Neb. The company has been steadily adding information to its knowledge database for several years, and integrated its database with an ERM system from RightNow Technologies Inc. last May. After customers fill out a form-based message on Cabela's site, the ERM system determines the nature of the message and offers answers in the form of FAQs. "The database delivers recommendations before customers even send the message," says Ron Spath, Cabela's vice president of customer relations. In 2005, that meant 110,000 fewer e-mails—a decrease of 30 percent from 2004. All remaining messages—more than 266,000 in 2005—are routed to agents and answered within three hours.

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    That live interaction is key to making ERM work. "One of the worst things you can do is send a meaningless response," says Stephanie Jones, senior vice president of the client practice at Connextions, an Orlando, Fla.-based call-center-services provider that offers outsourced customer service support to companies such as Napster LLC and AstraZeneca plc. "Nothing makes a person pick up the phone faster."

    At Charles Schwab Inc., the $4.5 billion financial services company, messages are tracked through software from ERM vendor eGain Communications Corp., but, as a policy, customers never receive canned responses. "We could do it," says Brian Muir, vice president of desktop strategy and solutions. "But we know that a percentage of those answers will be wrong, and we can't live with that."

    Ask your IT team:
  • Is our knowledge base available to customers?

    Tell your executive team:
  • Poorly automated customer service tools will drive up costs and anger customers.



    ERM systems can improve workforce management and cut call-center costs.

    At 1-800-Flowers.com Inc., e-mail response management is all about efficiency. The Carle Place, N.Y.-based company, which gets an average of 2,300 e-mails a day (that figure quadruples during holidays), has had a system from ERM vendor Kana Inc. in place for six years. "We wanted software that would let us streamline our e-mail," says Lou Orsi, the company's director of vendor relations and strategic projects. While the system used to send out only automated messages to customers, repeated complaints forced the company to rethink its strategy. Now, all messages are handled by live agents. Kana's software assigns each incoming e-mail a case number, prioritizes messages by keyword (cancellations and order changes get top priority) and provides reporting on message volumes. "That makes it easier to manage the workflow," Orsi says. "The system connects with our scheduling software so we can figure out how many people should be handling emails at any given time."

    That's important, because although the company's name makes its telephone number unforgettable, 60 percent of the firm's orders now come in over the Web. Though Orsi won't say how much the system has saved the company, it's key to the firm's continued success: Revenues increased by 11 percent in 2005, to $670.7 million, and the firm attracted 3.3 million new customers—though profits remain slim.

    In addition to improved customer service, Jupiter Research's McGeary says that companies that deploy ERM systems can handle 54 percent more e-mail per hour than those without one, "and do it with up to 39 percent fewer full-time people." Jones of Connextions agrees. When one client of Connextions first signed on, most calls were handled over the phone, "but now almost everything we do is over email," Jones says. As a result, both order fulfillment and customer inquiry response take place in less than 24 hours. "Their support costs have been cut in half," Jones says.

    To get the most from an ERM system, pay close attention to design. Set customer expectations by explaining how queries should be crafted, with appropriate keywords. Using Web forms instead of free-form e-mails can alleviate this issue because they force customers to use language the system can understand. Be sure to define a large number of rules in the system's rules engine (the mechanism that connects keywords with knowledge-base data) to help the system create the most accurate responses. Finally, every e-mail acknowledgement and response should include a way to contact a live agent if customers need more help.

    Ask your call-center reps:
  • What kinds of questions are we typically getting from customers?

    Tell your product managers:
  • Coordinate with call-center managers to develop content for the knowledge base.



    Self-service tools will gain adoption as ERM systems evolve.

    Considering that only about a quarter of all U.S. companies have deployed a formal e-mail management system, it would seem that the ERM market is poised for significant growth. Not so, according to Gartner Inc. "We are moving away from stand-alone systems toward an integrated multichannel solution," says Gartner analyst Esteban Kolsky. Instead of separate systems for e-mail, chat and telephone support, "customer interaction hubs" would treat all incoming communications equally, by translating them into a common language and placing them into a single queue.

    It's a lovely idea, but some observers are skeptical. "It would be wonderful if the e-mail and Web chat and telephone people were all able to make notes to the same file on a customer, but silos still exist," says author D'Ausilio. Even Kolsky admits it will take a while for such an application to materialize. "Though we see this as a model for the future, it isn't clear how far into the future we're talking. No one is actually doing this now."

    What's more likely is the continued evolution of customer self-service tools that will encourage customers to find answers online without ever having to contact the company, by phone, e-mail or otherwise. That's the plan at Schwab, says Muir.

    For example, "we knew that one of the most popular messages we would get concerned reordering checkbooks," he says. Although the company could have crafted a response to that query, Muir instead built a tool that lets customers reorder checkbooks on their own.

    No matter how good automated services get, they will never replace the power of human interaction. "We may have virtual agents, but we will never have virtual customers," says D'Ausilio. And as for Rogers' garage shelves? "I found the same ones at Bed Bath & Beyond—and saved $500," she says.

    Ask potential vendors:
  • Does your company plan to offer applications that merge call-center and e-mail applications?

    Ask your web team:
  • How might self-service tools reduce the number of customer queries?

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  • This article was originally published on 02-06-2006