It has been five years since South Australia’s Department for Transport, Energy and Infrastructure rolled out EzyReg.

The system is designed to save the department’s customers long delays at their local motor vehicle office by enabling registration renewals and 24 other public and commercial transactions to be conducted online. Now 30 per cent of South Australia’s 1.1 million vehicles are being renewed online, with 60 per cent of vehicle owners opting for the recently introduced three-month short term registration. The correlation of these trends has been a lifesaver for the department, since the three-month registration has nearly quadrupled the number of registration transactions the department is processing.

Without EzyReg, registration offices would have been bogged down in queues, while its introduction has both streamlined operations for the department and increased customer satisfaction, says Sherree Goldsworthy, director of driver and vehicle licensing with the department.

The three-month registration was introduced “as a response to a community need and in response to the fact that rego and insurance are getting very expensive,” she says. “And it meant the potential for a lot more people to come into our centres. EzyReg isn’t necessarily cheaper – it’s never as simple as saying that you throw this process online and halve your costs – because you also have to look at your audit tasks and your back-end work when you do online registration. But it has certainly delivered benefits to the people of South Australia.”

Self-service culture

Whether it is for car registration, bill payment, policy creation, online document lodgement or interactive quotations, the provision of new channels for customer self-service has gained currency in recent years as early e-business visions are finally supported by technologies mature enough to make them into reality. Increasingly, wired businesses are looking for ways to streamline online customer interactions and the often significant benefits of customer self-service have made it a rallying cry for companies fighting to do more with less. The US-based Help Desk Institute suggests the median cost of handling a customer enquiry through a call centre is $20; via email, $16; and, via online self-service, $5.

Another research firm, ServiceXRG, found a similar reduction in costs: with first contact by phone at $49.10; email $36.70; and web self-service costing the company just $11.60.

Surveys suggest customers also value the empowerment provided by self-service capabilities. ServiceXRG, for example, recently found that 60 per cent of users try to use self-service capabilities to solve their own problems before requesting formal help from support.

The same survey, however, also found that only 23 per cent of those people found what they were looking for. Clearly, if companies provide the right self-service functions, they can take those customers out of the support stream – reducing costs while maintaining customer satisfaction.

Some of the biggest self-service success stories are coming from overseas. Consider United Airlines, which is the world’s second largest carrier transporting 200,000 passengers every day. Working to cut costs under the protection of a three-year restructuring bankruptcy (from which it emerged in February 2006), United introduced a voice recognition system to reduce the cost of handling over 70 million calls that its 6,000 call centre agents, spread across 26 global contact centres, receive annually. “Our customers demand more of us every day and segmentation of how we interact with them individually is becoming the norm,” says Jerry Kolacinski, United’s senior enterprise architect for global voice and data infrastructure.

“We needed flexibility, wanted quality and were concerned about capacity because we take so many calls annually. We needed a low-cost solution for a big problem and it had to enhance our customer experience.”

United ultimately extended its Genesys call-centre environment with a voice-recognition system that lets customers query schedules, enquire about frequent-flyer points and conduct other transactions without human agents. When they do need to talk with a person, computer telephony integration ensures that customer-related data travels along with the call so customers do not have to repeat themselves.

Happier customers are not the only benefit, however: the system now reroutes more than 25 per cent of incoming calls, or around 17.5m calls per year, away from human operators.

That has slashed the cost to United per call, from about 65¢ each for a human agent, to around 15¢ per call using voice recognition. That equates to about $8.5 million in annual savings, delivering a massive return on investment and cost savings that can be diverted elsewhere in the company.

“This was a fairly large endeavour for our company to be able to put in something that is so customer facing and has so much impact,” Kolacinski says. “But our customer satisfaction is increasing, so we must be doing something that’s okay.”

"“It’s never as simple as saying that you throw this process online and halve your costs”"

Sherree Goldsworthy, director of driver and vehicle licensing, South Australia’s Department for Transport, Energy and Infrastructure

By all accounts, self-service is one of the shining lights of the internet age – a one-time promise writ large on the landscape of cost-efficiency and automation. Behind it, however, lies an often unrecognised truth that must not be ignored: the invisible customer may be cheaper to maintain, but they are also much easier to lose.

Switching companies

With self-service technologies giving companies less physical exposure to their customers than ever, it is easy for companies to miss many of the warning signs that might normally be picked up during visits to a branch office or enquiries placed to the call centre.

Left ignored – particularly when it comes to web-savvy customers who know just how portable their custom has become – it is entirely possible that your first indication a customer is not happy will be when they call to cancel their service. “It’s very easy for customers to move in our industry and you’ve got to have excellent service to make sure they stay with you,” says Greg Wilson, CEO of Primus Telecom. “We’ve got to track their calling patterns and intentions in case they want to move to another provider or they want to change what they have today. Even keep an eye on the way in which they want to interact with us.”

That vision can often get lost in the translation between business initiative and technological execution. In many cases, this shortcoming stems from the fact that major customer-related initiatives are often generated at the executive level but left for execution by staff at much lower levels. While the self-service imperative may trickle down as part of an overarching customer relationship management vision, its implications may simply be lost unless specifically addressed.

Control of CRM projects needs to be reinforced at all levels of the organisation to ensure new technology is accompanied by increased clarity of customer vision. Without that clarity, even the most ambitious CRM, customer self-service, e-commerce or other project can quickly become separated from the business drivers that spawned it and that is a danger sign for potential customer loss.

Self-service initiatives, in particular, require careful monitoring, Gartner senior analyst Geoff Johnson warns.

“We expect to see self-service increase as a metaphor in the future,” he explains. “There’s a trigger often linked to hype or inflated expectations, but this rapidly moves to the trough of disillusionment about outcomes. There are two views of the world, about the way we manage performance of customer satisfaction and management of customer service.

“Sometimes it’s hard to make those come together. It’s the individuals that are very close to the customer who know the nitty gritty and who you need to make sure have some input into this model.”

In many industries, technology advancements have made self-service more of a necessity than a nicety.

Banks, for example, would simply not be able to sustain the same levels of profitability if they had not successfully shifted a large percentage of their customers on to internet banking with its lower overheads and intrinsically scalable design. However, internet banking can also cause conflict between customers and their bank if those customers feel self-service offerings are poorly designed and are not meeting their needs.

The desire to maintain personalised banking despite growing promotion of internet banking led ANZ Banking Group, to conduct regular customer satisfaction exit surveys of its more than 1.2m active online customers and to extend its phone support hours to a 24-hour operation that ensures customers are never left without a person to contact. Regular usability testing also ensures that online fluff does not obscure the features that increasingly savvy customers require.

Personal contact

“One of our challenges is ensuring that we still maintain that personal touch even as the functionality keeps growing,” says Barry Vase, the bank’s head of retail banking e-commerce.

“When the internet boom kicked off, this kind of site was a novelty, but customer needs have changed. Now they just want to get into the site, do their work and get out.” The implications of diminished customer contact become particularly significant in outsourced contact centres. While most contracts with outsourced call centre operators hold them to tight performance metrics, those metrics do not usually include anything related to customer retention.

Keeping customer contact inhouse, on the other hand, can be more effective in keeping up with customers – and keeping them up with you. “Your average interaction with members is about seven to eight minutes on the phone as you up-sell and cross-sell to more appropriate products,” says George Savvides, CEO of Medibank Private. “There’s a lot of value in that transaction that I don’t want to lose.”

With customer numbers growing across the board and increasing expectations pressuring call centre staff, the push towards self-service has resonated at every level of today’s businesses. Increasingly sophisticated online services, often supported by organised knowledge banks where commonly-asked questions can be located with a few clicks, now divert a good proportion of enquiries that would previously have kept customers languishing in painfully long phone queues.

Momentum for self-service has also been gathering inside company walls, with HR departments providing intranet-based links that allow employees to enter their own time sheet data, address and banking details. Self-service password resetting has also become popular, slashing IT support costs by allowing users to reset their passwords without taking up the valuable time of help-desk staff. Gartner research has suggested that between 20 and 50 per cent of all help desk calls are related to resetting passwords. At an approximate cost of $51 to $147 per episode and $400 to $600 per user per year, the cost of users forgetting passwords is significant and a simple self-service engine can all but eliminate them.

Also enjoying the benefits of self-service is file restoration, a task that previously devoured help desk staff time when employees would ring to ask for an accidentally deleted file or directory to be recovered from a recent back-up. Self-service interfaces, built into many disk-based back-up products, let employees recover their lost files using the intranet without involving help desk staff.

Hidden pitfalls

Such self-service points all help to ease expensive pressure on IT staff but they may potentially carry their own risks as well. After all, regular contact with IT help desk staff and HR staff is an informal opportunity to gauge an employee’s mood and to address any issues they may be having.

Workplace conflict or the risk of employee defection can be identified and dealt with early on. Good communication between IT staff and business managers can be of benefit here. An employee who systematically deletes all of the files in his working directory, for example, probably is not planning on sticking around much longer and should be dealt with before he causes any more damage.

The desire to provide cost-effective customer service is common to every organisation but the way in which it is pursued can easily make or break its long term prospects. So while executives are taking the initiative to introduce CRM projects that likely include self-service, it is incumbent upon IT executives to both highlight the dangers of customer loss, and to assist the effort by providing systems that minimise that risk. In many cases, growing stores of customer-related information are proving to be a fertile source of information about customer behaviour.

Customer analytics technology, such as the SAS Institute application used by Primus and many other companies, has proved extremely adept at spotting trends in customer behaviour and extrapolating those trends to current and future customer behaviour. For example, the pending expiration of a fixed-term service contract is a major trigger point for many customers to start looking elsewhere.

Many companies begin their customer retention efforts around this time, highlighting possible up-selling opportunities designed to lock in the customers for a longer time.

Another tip-off might be rapid payment of credit card balances – suggesting that a customer is clearing their obligations so they can make a clean break without penalties.

Other customer channels may prove equally informative: repeated hits to your company’s product information websites, for example, suggest that the visitor is comparing your company’s products to decide which is best for them. However, that customer’s information search is also likely to include your competitors’ websites.

"“One of our challenges is ensuring that we still maintain that personal touch even as the functionality keeps growing”"

Barry Vase, head of retail banking e-commerce, ANZ Banking Group

If that person is an existing customer of yours, such activity may well suggest an intention to churn. For this reason, it’s advisable to try to get some sort of personal identifier, no matter how minimal, from customers conducting more than cursory product examinations.

The key in designing such analytics is to remember that customers are increasingly intelligent and increasingly merciless in their choice of providers.

Government agencies are immune from such worries, but most other companies need to make sure their customer-related projects are always approached with a hint of paranoia: assume customers are going to leave if they are not happy and then figure out how your systems, processes and products can work together to keep them happy.

As with many business-driven projects, this imperative requires ongoing teamwork between the executive branch, sales and marketing executives and IT staff to make sure that any self-service implementation is tied with appropriate customer monitoring and reporting infrastructure.

Throw in a measure of good, old-fashioned customer service and you are likely to go far.

“The old ways of dealing with people are still working and still available to use and are viable, but you’ve got to change,” Primus Telecom’s Wilson says.

“Companies have to change the way in which they do their business; get used to using the internet, SMS, or whatever form of communications needed to get their message to customers and back as well.”