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The Guide to eService 

The Guide to eService

The Guide to eService

By Donna Fluss
ICCM Weekly

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eService has come a long way!

Internet-based customer service, also known as eService or web based self-service, has evolved since 1996, when it was considered an afterthought of eCommerce, to an essential element of every company’s customer service and customer relationship management (CRM) strategy today.

I’d like to say that the maturity and expansion of this sector of the software market is the result of companies recognizing the great value eService offers to customers. The reality, though, is that this market has grown because of pressure on enterprises to reduce sales and service costs by minimizing human-assisted transactions. (It costs approximately $250 per live sales call compared to less than $5.0 per web sale and less than $ 0.25 to do a web self-service transaction and $ 5.50 for a phone inquiry.)

Customers Benefit from Companies’ Self-Interest

The motivation behind eService market growth may have been self-serving for corporations, but the outcome has been positive for both enterprises and their customers. Companies have reduced their servicing costs by deflecting customer transactions to the less expensive internet channel. And customers who choose to use eService are able to help themselves when they desire. Even though there has been much progress in the last couple of years, there is still tremendous room for improvement of technology and implementation. According to a recent study by Empirix Inc. one out of every seven web self-service transactions fails to complete and satisfy the customer. To realize the greatest value from eService investments, corporations must prioritize customer needs and wants over their own desire to reduce costs.

eService Functionality

eService functionality is intended to benefit agents and customers. Modules include:

1. E-mail Response Management Software (ERMS) – automates the handling of customer emails. The basic applications manage email flow in and out of an organization and use key words” to route and queue transactions. The advanced ERMS use natural language processing (NLP) to identify and understand the content and intents contained in an email transaction and use this information for routing and to provide a fully automated response. At a minimum, ERMS should come with the ability to acknowledge receipt of incoming emails automatically.

2. Frequently Asked Questions (FAQ) – enables customers to search for a specific question and answer.

3. Web self-help (also known as web self-service) – allows customers to look up information or log trouble tickets by themselves.

4. Chat – enables customers and agents to type and send messages to each other while in a specific web site (similar in functionality to instant messaging (IM).

5. Collaboration – allows customers and service agents to communicate interactively in a web environment (e.g. joint form filling).

6. Universal Queue – functions as a funnel bringing together all transactions (web, email, phone, chat, fax) into one queue. Once in queue, the application applies business rule workflow, routing, queuing and reporting. The software allows organizations to standardize the handling of transactions regardless of channel of origin.

7. Outbound email campaign management software (CMS) – enables organizations to issue email campaigns and to receive and process the responses.

8. vRep or “Bot” software – a form of self-service where the vRep or Bot takes on a personality, intended to humanize the interaction with the customer.

9. Knowledge Management (KM) – allows customers (and possibly employees) to search a knowledge base to find an answer to a question. KM is often the underpinning of a web self-service offering. The more advanced KM environments offer sophisticated authoring and administrative tools for creating and managing the content. Another differentiator of both KM and web self-service applications is the technology used to facilitate the “look-up” or search. The most common, basic (and hated) form of look-up is “key word search.” It’s difficult to use because success depends on the system user inputting the “right” word to obtain the relevant answer. One step up is “key phrase search,” where customers can type in a few words in the hope of finding the information they need.

The most sophisticated web self-service and KM applications today are using “natural language search” capabilities that allow customers to enter a free-form sentence, such as: “Please tell me everything about growing apples and, by the way, where is the best place to see apple trees.” The newer NLP-based KM and web self-service offerings are much better than previous solutions, but advancements in technology are still needed to improve accuracy and customer satisfaction.

Some eService vendors, like Kana, eGain, RightNow and Talisma, also allow agents to log phone-based inquiries into their applications. Even though vendors offer this capability as a selling point, it isn’t the primary or ideal use for any of these applications and this functionality, is rarely used.

Any vendor that offers multiple modules should also provide a single administration and development environment. The vendors that have grown “organically” and developed their own software, like RightNow and Talisma, do offer this. Vendors such as Kana and eGain, which are the result of mergers, are currently working on standardized administration and development environments.

eService Market

There are over 100 vendors in the US and abroad that are active in the eService market, representing a great opportunity for prospects. It’s also a challenge to figure out who to use and for what purpose(s). Vendors fall into the following general categories, each providing different functionality albeit with similar marketing messages:

  1. Best-of-breed eService suite providers
  2. Best-of-breed point solutions
  3. Contact center infrastructure providers
  4. CRM suite providers
  5. Enterprise Resource Planning (ERP) providers
  6. eService Application Service Providers (ASPs)

eService Vendor Categories

Best-of-breed eService suite providers – these vendors generally offer at least four of the modules listed above. The primary types of functionality found in eService suites are: ERMs, chat, web self-service and a universal queue that allows the eService suite vendor to integrate their own channels, but not phone-based transactions. If a company wants to implement eService functionality to improve quality, a suite makes a lot of sense. Vendors include: Brightware, eGain, Kana, RightNow and Talisma.

Best-of-breed eService point solutions – vendors of this type offer one or two of the eService modules listed above. While the breadth of functionality is limited, these modules may be superior to what you will find in a suite. The price of point solutions is generally more reasonable, as system users pay for exactly what they need, unlike a suite where purchasers pay not only for the functionality that they want but also for other pre-packaged capabilities that, at best, they may need someday. The downside of many best-of-breed providers is financial instability and lack of viability. Vendors include: Banter, Island Data and NativeMinds.

Contact center infrastructure providers – these are the old and new switching, Automatic Call Distribution (ACD) and Computer Telephony Integration (CTI) vendors, including those that sell large switches and vendors that sell “all-in-one” solutions. Besides doing an outstanding job of handling phone calls, these vendors offer products that also manage data-based transactions such as emails and chat sessions, sometimes even providing FAQ. Infrastructure providers concentrate on managing the movement of transactions but generally do not go beyond key word-based routing. Customers who want advanced analysis and processing of emails, for example, must purchase and integrate an ERMS. Vendors include: Aspect, Avaya, Interactive Intelligence and Nortel Networks.

CRM suite providers – these vendors sell sales, marketing, customer service and sometimes other functionality, like Employee Relationship Management (ERM). CRM suite functionality has improved greatly during the past three years and many of these vendors have much to offer to prospects, particularly for eService. But this is a “Catch 22” in that prospects are forced to invest in a great deal of functionality and infrastructure that they may not be ready for or even need. Vendors include: Amdocs, Chordiant, Onyx and Siebel.

ERP providers – these are the classic enterprise resource planning vendors that are building CRM and eService functionality. This is an eclectic group of vendors, very different from each other but all lagging behind the leading eService offerings in the market. They present a compelling message of integrated front and back office products; the catch is that as of yet, while the three major players are all working to deliver strong eService products, there is still work to be done. Vendors include: Oracle, PeopleSoft and SAP.

eService ASPs – these vendors rent or lease eService functionality. When they first entered the market in 2000, many of the offerings were functionally inferior to the products available for sale. However, during the last couple of years, the surviving eService vendors have developed decent products. The risk is that these vendors are relatively small and their financial viability remains questionable. Vendors include: eAssist, eGain, LivePerson and RightNow.

Best-of-Breed vs. Suite — ROI Considerations

The debate continues over whether best-of-breed is more or less preferable to either an eService suite or a CRM suite that includes eService functionality. What is clear is that regardless of whether a suite or point solution is purchased, integration of eService applications with legacy and other operational and supply chain systems is required to deliver the greatest benefit to the enterprise.


What isn’t debatable is the need to demonstrate quantifiable value and benefits from eService investments. CFOs require hard dollar savings and cost avoidance as financial justifications for investing in an eService application. Acceptable savings categories include productivity improvements, such as reduction in agent talk time or handle time, or cost avoidance, such as a reduction in call volume or live sales visits. Of course, there are also soft benefits that need to be considered when making a technology decision. Improvements in customer satisfaction and loyalty are two very important criteria that are hard to quantify but are critical for a corporation to consider.


eService functionality is a requirement for all companies as it improves service quality by allowing customers to use their channel of choice and, when properly implemented, will reduce the cost of service. The good news is that eService functionality has matured significantly during the past two years, even though there still remains room for improvement. However like most CRM offerings, the success of the initiative is dependent upon understanding and prioritizing customer needs and optimizing the functionality to meet each enterprise’s specific requirements.

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