The rapid growth and evolution of the Internet as a customer contact
channel has had profound implications on the way traditional companies
conduct business. Today, those who haven’t turned their “bricks-and-mortar”
business into a “clicks-and-mortar” operation are steadfastly losing customers
to those who have.

Why? Quite simply, because we live in an era of convenience. Now that
most companies are leveraging the Internet as a sales channel, there is
a realization that the ability to succeed hinges largely on the ability
to properly support one’s online customers.

These customers have many choices.If a website is difficult to navigate,
lacking in features, or is unresponsive to customer needs, it will not
only be underutilized, it will be abandoned. It is far too easy for an
online customer to try the competition’s products or services if one cannot
find what they need from the first site they select.

Facing Challenges

What does this mean for the utility industry? As energy providers across
the U.S. begin facing competition as a result of deregulation, more than
ever, call centers within utility companies need to provide exemplary
service to meet customers’ high expectations. Soon, utility companies
will be faced with many of the same challenges as today’s leading retailers
or telecommunications companies – the challenge of attracting and retaining
customers. With this in mind, the utility sector needs to be prepared
for an increased demand for assistance on their websites.

In preparation for this shift to the Web, utility companies more than
likely already have the most important building block in place – the call
center. However, there are critical steps to extending the call center’s
reach beyond the telephone – and that is developing a strategy for transforming
the call center into a complete customer interaction center.

The Reality of Customer Loyalty

With the utility industry facing deregulation, electric and natural gas
companies will experience an increased need for Customer Relationship
Management (CRM) to help retain current customers and recruit new ones.

Case in point: According to J.D. Power and Associates Cross-Industry
Call Center/Customer Satisfaction Report, consumers are twice as likely
to switch service providers when offered a discount unless they receive
superior customer service1. The report also found that special promotional
offers, especially those based on price, could reduce consumers’ willingness
to remain loyal to companies with which they do business.

The good news is, utility companies are in a strong position to retain
existing customers. Another study by J.D. Power and Associates/Navigant
Consulting Inc. cited that 65 percent of residential customers are extremely
or very satisfied with their electric utility provider2.

Quality of service is critical in building and maintaining customer loyalty.
However, as competition and consolidation increase, some companies will
be left behind as others march aggressively ahead.

Transforming the Traditional Call Center into a Full-Service Customer
Interaction Center

Providing quality customer service is the lifeblood of a company’s call
center. However, the emergence of the Internet as a new channel for customer
contact has given rise to a whole new level of customer contact within
many organizations. In addition to customer service, the Internet allows
companies to manage activities such as order processing, account management,
statement presen-tation, bill payment, and frequently asked questions
(FAQs) about products and services.


Figure 1
APAC Customer Services’ fully interactive voice and data environment
larger image

Figure 1

The prospect of building Internet capabilities into the call center is
daunting for many companies. For this reason, many choose to outsource
their customer care functions – both traditional phone-based services
and Web-based support.

Current investments in the call center – such as Customer Relationship
Management (CRM) and Computer Telephony Integration (CTI) – can provide
the same benefits to Internet interactions as they do for inbound and
outbound telephone calls. Companies can expand their call center operations
by either purchasing Web-based functionality and integrating it into the
existing infrastructure or by utilizing solutions from an Application
Service Provider (ASP) specializing in Web-based customer service software.

Before going into detail on the various Internet-based communications
channels, it is important to understand the CRM and CTI capabilities that
are instrumental in today’s call center operations.

Customer Relationship Management (CRM)

Many call centers use CRM software to manage customer interactions. CRM
applications can include capabilities such as sales force automation (SFA),
help desk, technical support, relationship management, and others. Each
of these applications revolves around a workflow process that is normally
tailored to the specifics of the business. Usually, CRM applications implement
CTI capabilities, giving them the ability to “pop” the appropriate screen,
based on the customer’s phone number or the information collected from
an Interactive Voice Response (IVR) system. The screen that is displayed
on the customer service representative’s (CSR) desktop gives them the
appropriate set of customer information, as well as the application capabilities
required to complete the customer service interaction.

Again, the capabilities of existing CRM applications can be leveraged
for Internet-based communication. A CSR should be presented with the same
information and tools for Web-based interactions as would be presented
for telephone calls. This eliminates the need for a representative to
undergo costly training on different systems.

Computer Telephony Integration (CTI)

The telephone plays a significant role in the Internet-enabled customer
interaction center. Therefore, it stands to reason that CTI systems will
also play a role. The most common CTI application is known as “screen
pop,” which delivers the basic capability of displaying customer contact
data on a CSR’s desktop simultaneous to the arrival of the customer’s
telephone call. The basic premise of a “screen pop” is to give the representative
the information they need in order to complete a customer service transaction,
avoiding the inefficiencies and frustrations of having to repeatedly ask
a customer for the same information. This holds true for Internet-based
customer service requests. For example, if an email requires a response,
the representative should be provided with the same “screen pop” of customer
contact history and information that would appear for an incoming telephone

Multichannel Communications for the Customer Interaction Center

Many Web-based communication channels present opportunities to achieve
greater levels of service and to reduce costs. For example, email is an
asynchronous communication medium, meaning that a customer is not actively
waiting for a response. This time interval presents opportunities to provide
a more informed and appropriate response.

A Web-based text “chat” session, which can be considered “near synchronous”
(i.e., an answer to a chat question is expected within a minute or two)
also presents opportunities. Even the action of handling multiple media
types within a single customer service organization presents opportunities,
as indicated by:

Content Analysis

In the case of email and chat, it may be valuable to perform sophisticated
content analysis before an incoming message is presented to a CSR. This
may include a knowledge base search, which would attempt to identify similar
questions for which a reply has already been created and could therefore
be reused. It may also provide the opportunity to analyze messages waiting
in a queue for detection of similarities so that a response can be created
and then sent in bulk. This is common when a customer base, as a whole,
experiences an event such as the roll-out of a new service or a special
promotion. This form of content analysis is not generally applicable in
the case of a telephone call, where a customer is actively waiting on
the other end of the line.

Blending Media Types

The “blending” of multiple media types also presents opportunities for
greater service and reduced costs. Media-blended environments, coupled
with the asynchronous nature of email, will increase the efficiency and
effectiveness of a customer interaction center while achieving greater
economies of scale. For example, since it is typically acceptable to allow
longer wait times for email replies, gaps in telephone traffic can be
filled by having CSRs respond to email inquiries. If you consider a call
center comprised of hundreds of agents who experience an average idle
time (or time spent in a “ready” state) of 10 percent, the payoff is significant.
Even if only half of the agents, in a 200-person call center, are skilled
to handle email, you will essentially have 10 CSRs dedicated to email.
This is significant when you consider the cost of hiring, training and
retaining 10 agents.

Proactive Support and Cross Selling

The Internet provides a great forum for proactive customer service, up-selling
and cross-selling. For example, if an important customer has submitted
an improperly completed form multiple times, a notification can be sent
to a representative. This would give the customer interaction center the
opportunity to proactively contact the customer while they are still on
the website and possibly still experiencing difficulties. While this may
sound intrusive, there are a number of ways to ask the customer if he
or she would like to interact with a live agent before actually contacting
them. If a customer has exhibited a certain behavior on the website (i.e.,
remaining on a particular page for a long period of time or looking at
a series of related pages), a notification can be sent to a representative
or intelligent software program. This would give the CSR the equivalent
capability of being able to “walk up” to a customer and ask, “May I help

Which Communication Channels are Right for Your Customer Interaction

Offering the customer a choice is key. Some might feel that Web-based
text chat is the best form of communication between the customer and CSR,
since it does not require special hardware or software to be installed
on the customer’s computer. Others believe Voice Over Internet Protocol
(VOIP) is preferable because real-time communication by voice is more
natural and doesn’t require a second phone line. The telephone and email
are certainly the most widely used form of communication between agent
and customer. The correct answer is to let the customer choose.


The telephone – including toll-free services, IVR, and outbound solicitation
– has been at the forefront of customer communications for the past 20
years. Therefore, when thinking about Internet communication channels,
one must not forget the telephone, as it continues to be one of the most
heavily used forms of communication. But patterns are shifting, and by
2003, more than 70 percent of households will be online3, with research
supporting that the majority of customer service inquiries will migrate
to the Internet as well. However, it is still important to consider how
an Internet customer can effectively use the telephone to communicate
with a CSR.

For example, most websites provide at least a customer support telephone
number. More advanced sites have “call-me-back” capabilities, giving the
customer the opportunity to request a phone call from the customer interaction
center. However, if you consider the power of an Interactive Web Response
(IWR) system, in-depth information can be collected from an online customer
much like an IVR system. When a “call-me-back” is requested, the customer
interaction center can then assign the most appropriate agent to place
the phone call. Statistics such as position in queue and expected wait
time can be provided to give the customer a visual representation of their
“virtual” call, as well as provide them with information on when they
can expect to receive the phone call. “Call-me-back” capabilities can
also be designed to give the customer the option of scheduling a phone
call for a later time.

Email Response

Email is certainly the most practical and common form of communication
on the Internet today. The growth of email can be attributed to the fact
that it is easy to use and extremely convenient – no special hardware
is required, and in many cases, no special software, just a browser.

According to Forrester Research, 71 percent of consumers using customer
service now turn to email to resolve their issues, while 51 percent use
the telephone4. Not only are these two channels used most often, they
are also the most preferred.

As a result, Internet sites are starting to receive email by the thousands
on a daily basis. Customers are realizing that it is more convenient to
write a quick email than to sort through an IVR, wait in queue, and deal
with potential transfers between CSRs – often common of a telephone-based
experience. Furthermore, email can be sent 24 hours a day, seven days
a week.

From a customer perspective, sending an email puts more responsibility
on the customer interaction center to properly manage it behind the scenes.
In 1999, Jupiter Communications reported that an astounding 46 percent
of emailed customer service inquiries went unanswered or were not responded
to within five days5. As companies begin to leverage the same technologies
and processes that have been established and perfected within their call
centers, these numbers will improve. If nothing else, the simple fact
of competition will drive them to support customer email.

Shared Browsing and Application/Form Sharing

Shared browsing can be considered the most basic form of application
and form sharing. It gives the customer and the CSR an opportunity to
co-navigate a website, so that they both see the same Web page at the
same time, regardless of who clicks on a link. This gives the CSR the
ability to “guide” a customer through the website. Shared browsing, in
its simplest form, is a relatively lightweight feature – a Java applet
or ActiveX control is dynamically loaded when the customer accesses the
customer service portion of the Internet site. In a more sophisticated
form, shared browsing can allow a CSR to actually enter data into a Web
page on behalf of the customer, though this is more complex in terms of
security and performance.

Sharing HTML-based forms extends the capabilities of shared browsing
by allowing not only sharing of Web pages but by also allowing a customer
and CSR to interactively complete HTML forms. The CSR sees what the customer
types; the customer sees what the CSR types. The two can work collaboratively
to accomplish the task at hand.

Voice Over the Internet Protocol (VOIP)

One of the primary benefits of VOIP is that, in the case of Web-based
customer service, it removes the need for a customer to disconnect their
Internet connection to make a call. It also has cost saving implications
since a public switched telephone network (PSTN) phone call is never required.
However, there are issues with VOIP. First, it requires an Internet customer
to have a VOIP-enabled application, speakers, and a microphone installed
on their computer. Secondly, the loss of fidelity and synchronization
due to the necessity of voice compression and network hops lowers the
quality of VOIP to a level that may not be acceptable for some customers.
Nonetheless, VOIP, which is a technology still in its infancy, will only
continue to improve and increase in popularity.

Though proprietary protocols exist, most VOIP applications implement
H.323, a standard for real-time multimedia communications and conferencing
over IP and ISDN networks. This allows customers to use any H.323 compliant
applications such as Microsoft NetMeeting and Netscape Collabra as VOIP

Web-Based Text Chat

Web-based text chat, also known as “text conferencing,” is important
considering that not everyone has two phone lines or a computer equipped
with a microphone and speakers. If both of these conditions are true,
a user must disconnect from the Internet in order to speak to a CSR, and
this can be a hassle. If they choose to communicate with a CSR via chat,
however, they are able to communicate in near real-time for quick resolution.

The basic functionality of chat is to allow a customer to ask questions
via their browser and view text-based responses from a CSR in near real-time.
Similar to the case of handling email, chat also gives the customer interaction
center the opportunity to invoke text analysis capabilities. Suggested
responses can be automatically inserted into a chat session, alleviating
the agent from answering repetitive questions. Scripts can be executed
within a chat session, automatically helping a customer through a series
of questions that will ultimately help the CSR deliver better service.

Similar to shared browsing, Web-based text chat comes in many forms.
Chat technology can consist of an HTML form, a Java applet, a browser
plug-in, or a stand-alone application. Standards such as H.323 also support
chat, enabling interoperability between H.323 compliant applications.
If chat is to be supported within a customer service environment, it is
most practical to support a range of approaches, enabling customers with
less sophisticated chat capabilities installed on their computers to communicate
with CSRs.

Is Your Website Customer-Friendly?

Having the right communication channels in place is futile if customers
aren’t aware of your website, or if the are not using it to its fullest.
Attracting customers to the site is of paramount importance. Ultimately,
a strong website will help build relationships with customers and empower
them to accomplish their goals at a time and place that is convenient
for them. Also, a strong website will off-load CSRs and provide additional
up-selling and cross-selling opportunities for the company. A useful,
customer-friendly site will keep customers from turning to a competitor,
thereby improving customer loyalty.

What makes a website successful? It is a combination of things, including:

  • A visually stimulating and intuitive interface

  • Customer-empowering functionality

  • Access to valuable and timely information

  • The provision for assistance

A talented graphic artist can create the right look and feel, but it’s
a good IT manager and customer service manager who will integrate the
right capabilities into the company’s website to empower the customer.
Here are several levels of functionality to consider:

Self Service

This is the backbone of e-commerce – the ability for an online customer
to easily purchase a product or service. Usually, self service is very
specific to the business behind the website, requiring integration with
back-office applications. However, off-the-shelf technologies from a host
of e-commerce vendors offer functionality such as electronic payment,
profiling, publishing, cataloging, legacy integration, and membership.

Self Help

Self help allows customers to answer their own questions without interaction
with a CSR. In its most basic form, self help can simply be a list of
Frequently Asked Questions (FAQs). In a more advanced form, self help
can provide context-sensitive help, search a knowledge base, or even detect
user problems and automatically suggest solutions. Providing self help
capabilities can eliminate the frustration that users experience when
they’re unclear about how to accomplish a task or they simply get stuck
with a question.

Assisted Help

No matter how useful the self help capability, there will always be cases
where a customer will need human assistance. And the more choices they
have in how to achieve that assistance, the better. In the case of choosing
an energy provider, the customer is making a choice that is of high value
to them; therefore, it is desirable to have highly trained CSRs to assist
with their inquiries. Assisted help takes on many of the different channels
mentioned above – phone, email, chat, VOIP, shared browsing, form sharing,

Interactive Web Response

A website can have functionality similar to an IVR, which is typically
used to collect information about a voice caller or provide basic self-service
functionality. If an online customer requires assistance from a CSR, the
Web pages that the customer has visited as well as any other essential
information can be collected and given to the agent as “attached data.”
Furthermore, this information can be used to determine the skills required
to adequately address the customer’s inquiry. Due to its similarity to
an IVR, this capability has been coined IWR – Interactive Web Response.
Though, in essence, an IWR embodies the entire functionality of the website,
the process of collecting data relevant to the customer’s inquiry is the
one that is most directly analogous to its voice counterpart, the IVR.

Making the Leap

The customer interaction center transcends the traditional call center
and offers communications through some or all of these media. It is not
just about taking phone calls or answering email. It is about communicating
with customers in the form they choose while making a consistent, lasting

Recognizing that in most cases major change is difficult to achieve instantaneously,
it is important to consider the foundation required to support the migration
to Web-based customer care. From a people and process standpoint, the
foundation lies ultimately on the CSRs and the methods by which they deliver
customer service. These resources should be leveraged yet retooled to
support new customer interfaces.

From a technology standpoint, the foundation consists of an IT infrastructure
that is flexible enough to accept change. This entails an infrastructure
layer that abstracts the particulars of a customer interface or communication
channel and presents a unifying “interaction model,” enabling the use
of common business applications.

The Outsourcing Advantage

Many of the communication channels mentioned, such as email and chat,
are software-enabled yet require a human touch. Because of the people,
processes and technology needed to run a successful customer interaction
center, many companies choose to outsource their customer service operations.
The strategy of outsourcing allows an organization to focus on its own
core competencies while entrusting an experienced partner to service its

Outsourcing, specifically of CRM functions, offers the following advantages
vs. an in-house customer interaction center:

  • Outsourced CRM provides dedicated support for your programs without
    the need to develop an expensive infrastructure.

  • Outsourcing provides the ability to employ advanced technologies
    for competitive advantage without the financial burden of purchasing,
    installing, and maintaining expensive systems.

  • Outsourcing allows a company to focus its attention on key internal
    issues and develop internal core competencies.

  • Programs can be added, subtracted, or expanded without battling internal
    restrictions or physical limitations.

  • By eliminating the need to physically develop facilities and personnel,
    companies can react more quickly to changing market conditions and
    make decisions based on long-term needs, not physical plant or human
    resources issues.

  • Freed from the need to develop internal expertise, the demands on
    available human resources are diminished, while talent and access
    to leading practices are retained.

  • Lastly, it is always easier to be the customer than the manager.

But, the question often remains, “How do you know when to implement an
outsourcing arrangement if you already have an in-house facility?”

This question is one that should be addressed in a careful, considerate,
and objective fashion, so as to avoid any appearance of impropriety, and
to make certain that the client gains the most from the transition. Since
not every company will find outsourcing the proper move, not every moment
is ripe for making a shift in your customer service platform.

One of the driving factors leading to outsourced customer care functions
is the issue of technology. Simultaneously the lifeblood and the bane
of a customer interaction center’s existence, technology advances require
a constant investment in order to stay current, let alone to take a leadership

If a company is experiencing difficulties getting database and programming
support from its IT department, this is a warning sign. Internal IT priorities
are not always in line with call center needs, and if the IT relationship
isn’t sufficient now, it will likely not improve in the near future. Outsourcing
can offer significant opportunities for improvement in this area.

Facilities are another key component to success. A company faced with
increased competition might find itself expanding quickly and needing
more space, yet finds none readily available. In today’s business world,
companies are usually loath to invest in more “brick and mortar” which
means your expansion needs could likely meet a brick wall.

Finally, personnel issues are central to successful operations in the
customer interaction center. Tight labor markets often mean difficulties
in recruiting. That in turn may well affect a company’s ability to staff
up to meet service level targets and expanded hours of operations, all
the while maintaining a profitable profile.

Outsourcing all or some of your customer care services can remedy many
of the aforementioned maladies.


Whether a company manages its call center in-house or chooses an outsourced
partner, Web-enabled customer care is now a business imperative. By recognizing
that a full-service customer interaction center can help attract new customers
and build loyalty, while increasing profitability and productivity, companies
will have a competitive advantage. The utility industry, specifically,
places great emphasis on customer feedback in order to help determine
policies and procedures for their call centers. So, whether the company
is adding new technologies, re-engineering websites or consolidating call
centers, today’s utility companies must have high-powered plans in the
works to compete and succeed.


1 J.D. Power and Associates, “2000 Cross-Industry Call Center/Customer
Satisfaction Report,” Used with permission.

2 J.D. Power and Associates/Navigant Consulting, Inc., “2000 Electric
Utility Residential Customer Satisfaction Study,” Used with permission.

3 Forrester Research, “Customer Interaction Outsourcers,” January 1999.

4 Forrester Research, “Driving Sales with Service,” November 1999.

5 Jupiter Communications, “Customer Service Survey Results of 125 Websites,”
3rd Quarter, 1999.