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Companies ponder customer-friendly IM


By Scott Kirsner

(IDG) -- Cut your call center costs. Create happier customers. Enable your phone reps to skip the no-brainers and handle more complex questions. New technology is the answer.

You've heard this all before, but it's coming around again. Instant messaging (IM) software, recently discussed in this column as a tool for interemployee communication (see "IM is here. RU prepared?," below), is also opening up a new channel for serving customers. But is there any payoff?

If you haven't yet used an IM tool, such as AOL Instant Messenger, ICQ, MSN Messenger or Yahoo! Messenger, it's worth a few minutes of experimentation. (AOL Time Warner is the parent company of Originally a venue for frivolous chatter among preteens, IM has begun earning its stripes as a productivity tool in many corporations. Analyst Michael Osterman of Black Diamond, Washington-based Osterman Research refers to it as "real-time e-mail." You always know whether someone you'd like to talk to is online, and you can get speedy answers to questions tapped out in an informal shorthand or assemble quick digital quorums. INFOCENTER
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Now, several vendors are touting IM as a superior way to communicate with customers -- either to market new offerings or to answer their questions. A few companies, including Alaska Airlines, Intel and New Line Cinema, have begun small tests of IM as a new mode of interacting with customers. The potential uses are wide-ranging: from notifying passengers about delayed flights to promoting new movies. Companies could even set up intelligent "bots" -- software that automatically responds to questions -- that would preinterview job seekers or spit out account balances on request, 24 hours a day.

Much of the interest in IM as a customer service tool is attributable to one thing: bloated, overdesigned Web sites. It takes too many clicks, and too much time waiting for irrelevant pages to download, for customers on dial-up modems to get the information they need. "You had a thousand different agencies designing Web sites in their own ways," says Stephen Klein, CEO of ActiveBuddy, a New York City company that provides technology for building IM bots. "They changed the navigation constantly because users weren't finding this or that. It has become a black hole."

Instant messaging, by contrast, is conversational. IM vendors say that when customers or prospects can't find information on a Web site, their first impulse is to call the toll-free number, which is costly for the recipient. But with IM, a customer could send a message that asked, "What are your hours?" and get the reply, "All our branches are open from 8 a.m. to 6 p.m. weekdays." An automated answer delivered by IM costs just a fraction of an answer delivered by a human being on a toll-free line, according to Francis deSouza, the CEO of IMlogic, a Somerville, Massachusetts-based software company.

"The Web is a wonderful publishing medium," says deSouza, "but IM is much better for interaction. And it takes some of the load off your call center. One e-tailer we talked to said 17 percent of its calls are about the status of packages. If you could take those calls away, it's a huge cost savings."

Today, vendors estimate there are more than 100 million users of IM worldwide. Gartner expects that by 2005, instant messaging will be used more often than e-mail, which could mean that companies that understand how to use IM to talk to customers could gain an edge.

"Clicking on links to get an answer to a question isn't in our DNA," says Klein of ActiveBuddy. "Conversing and asking questions is." Klein and others expect IM customer service to eventually evolve the way that automated-response phone systems have. Customers might first encounter a bot that would try to answer their questions, and if it couldn't, or if the customer hit zero for an operator, she would be bumped to a live agent÷still interacting over the IM software.

Some of the bots designed using ActiveBuddy's tools are not only helpful but fun to chat with. SmarterChild, the company's showcase bot, will supply you with movie times and weather forecasts, and is always willing to play a few hands of blackjack. Intel's YourDigitalBuddy is a bit more of a huckster, looking to tell you about the company's Pentium 4 processor. A typical utterance: "The Pentium 4 processor has reached the 2GHz mark, giving you the ultimate in PC computing experiences and truly putting you at the center of the world."

Other bots might zap you with updates as an important FedEx package crossed the country, tell you how much Enron stock one of your mutual funds held, or quiz you on your work experience and then ask about your availability for an in-person interview.

Adopting instant messaging as a new mode of communication could give companies a permanent place on their customers' desktops. Citibank, for example, might be included on your AOL "buddy list," always available to answer questions about your account. And if the Lands' End bot was friendlier or more helpful than the L.L. Bean bot, that could tip your loyalty. (Of course, all bets would be off if L.L. Bean decided to eschew bots for real humans.)

But IM, still a fledgling technology, has some drawbacks. There's still not a single technical standard for IM clients, which can make developing software for them needlessly complicated. And information sent to IM clients themselves isn't very secure -- but neither is information sent via e-mail. It will also be tough to measure the immediate impact of an IM customer service option, since it won't reduce call center volume overnight.

If this were 1999, companies would be falling over themselves to be the first in their industry to deploy customer service over IM. But in 2002, "convincing a company to implement IM will be tough," says Osterman. "There's a lot of caution, and IT expenditures are static right now." Companies that overspent developing their Web sites will be skeptical about spending more money to reach customers through a new, supposedly more "straightforward" channel.

That skepticism is well-justified. Companies shelled out millions to build nifty Web sites, and customers who wanted quick answers went right back to the toll-free number. Those in a rush always hit zero for an operator. Even if bot software gets really good÷and Klein says it ought to be able to answer at least 90 percent of customers' questions -- there will still be some harried nudnicks who always hit zero for a real person. And then, even though you'll have reduced your telecommunications costs by dealing with customers over IM, you've still spent money to develop new software and train your call center reps to use it.

Inexpensive, skunk-works-style projects are probably the best way to approach IM customer service right now. One good test is to build a simple IM bot that can answer your company's list of frequently asked questions, or provide information about account or delivery status. Before going too far, though, it's essential to make sure that enough of your customers are using IM, and that they would use the features you're considering. Customers might not care to banter about brownies with a Betty Crocker bot, but they might relish receiving tips from Mr. Goodwrench about what maintenance is necessary at 100,000 miles.

Instant messaging could eventually help some companies deliver a higher level of service less expensively, market themselves in a more conversational mode and enhance loyalty. But proceed carefully. I asked CrystalBallBuddy, a bot that Klein created to supply oracular Magic 8 Ball-type replies to questions, whether "customer service via IM [would] be relevant to companies."

The bot's not-ready-for-prime-time response? "I'd suggest customer wait a while before customer service via IM be relevant to companies."


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