Talk Isn't Cheap

February 1, 2012 12:00 AM

In one 40-hour work week last year, a single customer service rep at, a fast-growing retailer of parts and accessories for household appliances, racked up 1,693 live chat sessions with online customers—the high for the week. It appeared to be a stellar performance, even at a retailer whose customer service reps routinely handle as many as 10 to 15 live chat sessions simultaneously.

But there was more to those performance numbers. ApplianceZone, which has grown more than 10-fold since 2007 to surpass $12 million in sales by 2010, invites customers after each live chat session to take an exit survey to rate the quality of their chat experience. The live chat rep, whom ApplianceZone did not name for publication, brought in nearly 300 completed exit surveys. The feedback wasn't all good.

"This rep had the high chat volume, but her overall quality score was low," says Jessica Staser, vice president.

The problem? The rep came across too often like a robot, as she sped through sessions providing many canned answers.

"Customers said they felt like they were talking to a computer," Staser says. "A lot of customers said the person on the other side of the chat session was robotic."

The anecdote illustrates why retailers, while benefitting from the power of live chat to offer personal service to many customers, must also provide their reps with the right mix of skills and information to do their jobs well. It comes down to a blend of information and ongoing improvement of agent skills, enabling chat agents to provide customers with the assistance they need in a friendly, personable way.

Power to the agents

Like other retailers using live chat, ApplianceZone provides its live chat agents, as well as agents engaging customers via phone or e-mail, with extensive information that flashes onto their computer screens. The information, stored in back-end databases, covers order and shipping status, available inventory, product details, current promotions, and, for repeat customers, their past shopping behavior and content recorded in prior chat sessions. Agents may also have access to a shopper's clickstream activity on the retailer's site and product recommendations based on each customer's expressed interests and shopping history.

To help live chat agents handle large volumes of customer sessions, retailers often provide a repository of canned answers for addressing some of the most common questions—such as what's the retailer's return policy or how to track the status of an order. Contact centers often refer to such a storehouse of information and scripted answers as a "knowledgebase." C3, a contact center services provider whose clients include the car rental company Dollar Thrifty Automotive Group Inc., uses database technology from Israel-based nanoRep and live chat system provider LivePerson Inc. to let agents access from their computer screens information stored in a knowledgebase.

While an agent is either on the phone or in a chat session with a client, she can search the database for similar questions and answers compiled from past chat sessions. "Our agents can now reach into the database without putting someone on hold," says Ken Condren, C3's vice president of technology. "In the old days, they would have to put the customer on hold while they asked their supervisor for help." The nanoRep database is designed to improve with age, as new content from the LivePerson chat system is automatically added to it. C3 can cost about $100 per month per agent for a team of 25 to 30 chat agents. NanoRep's monthly fees for its knowledgebase range from $199 for 1,500 customer service answers per month to $990 for up to 30,000 answers per month.

ApplianceZone has built up a knowledgebase with Bold Software, its live chat system provider, which also provides software that updates the knowledgebase with comments recorded in chat sessions. (Bold Software was acquired last month by LogMeIn Inc., a provider of Internet-based customer support for personal computers, smartphones and other devices.) Bold's live chat software starts out as low as $9 per agent per month, the company says.

Not wrong, but ...

The knowledgebase is part of the ApplianceZone's overall administrative database, which it built in-house to provide access to information from multiple sources, including the order management system, inventory records, product descriptions and shipping systems. The database also connects with some 30 drop shippers that ApplianceZone uses to fulfill orders.

In the case of the errant live chat agent, however, ApplianceZone discovered during a review that she had over-relied on canned answers, Staser says. The answers weren't inaccurate, but the agent should have sensed in a number of cases that the customer needed more personal and helpful service—to ensure the customer could find the right parts for her particular model of dishwasher, for instance, or to track a shipment that the retailer had to place on back-order with a manufacturer.

Such reviews of live chat agents' performance can also show that they need to get better at gathering the information a customer needs. The review process, Staser says, is an important part of an agent's ongoing skills development. "We print the chats out and go over each one with the agent," she says. "It could be that the agent did not know a certain research process, or that she felt a canned response would work just as well."

In other cases, retailers have learned the hard way that agents without connections to the right company information can leave them without the tools they need to do their jobs effectively. That's what retail chain Petco Animal Supplies Inc. discovered when it launched a new live chat system for its e-commerce site last year.

Going holistic

Petco, like other retailers with live chat, trains its customer service team to handle sales as well as service inquiries from customers. Petco for years has relied on Sutherland Global Services to provide customer service and sales agents. Those agents are trained in Petco's products and policies and have direct network access into the retailer's back-end databases for order status, product details, and in-store as well as online inventory availability.

When Petco launched a new live chat system last fall from LivePerson, it decided to use LivePerson's live chat sales agents. But though the agents were skilled, they didn't have the access to information they needed to really help customers and close sales, says Katie Grisko, Petco's senior business systems analyst, who oversees the retailer's live chat operations. "They understood sales, but didn't have the tools and information they needed," she says.

Instead of building new network connections to LivePerson's agents, Petco switched its live chat sales operation to the already connected Sutherland. Petco now has 25 Sutherland live chat agents who can handle both sales and service. In addition to providing all live chat agents with access to Petco's customer history and inventory databases, "we've trained them to be more diverse, not really sales-focused," Grisko says.

Rather than emphasizing product sales, she adds, Petco's live chat agents are now better equipped to comprehensively address a customer's interests. "We found that it was a lot about knowing the customer, the pet type, and what works for the customer as a solution, instead of just focusing on a product," she adds.

The new arrangement works well, Grisko says. Although it's still a challenge to constantly familiarize agents with new products, the information agents can access from their computer screens has helped to both boost online conversion rates as well as provide some unexpected benefits for Petco's loyalty programs and its 1,000 bricks-and-mortar stores.

"We went into this live chat expecting to increase online conversion rates, and the incremental conversions and incremental revenue are both solid numbers," Grisko says, without providing details. "But we also found a lot of usage in support of stores and loyalty programs."

With their access to inventory availability, for example, Petco's live chat agents can assist customers who would prefer to see something in a nearby Petco store before purchasing it. And with the LivePerson software set to notice when an online shopper is having difficulty entering a correct log-in name or password to sign in as a loyalty club member, a live chat window will pop up and ask if the customer needs assistance in getting her log-in information. For security purposes, the live chat agent will send such information, if requested, to the e-mail address the customer has on file.

Even with access to tons of information in back-end databases, however, in some cases live chat agents provide the best service by passing a customer to a more suitable agent. At ApplianceZone, chat agents can see on their computer screens other agents that may be available to take over a session, though the typical route is to forward a customer to a supervisor. Shift supervisors can view other agents' chat sessions through the Bold Software interface, and may join or take over a session that appears to need extra help.

Bike experts for bike buyers, which sells skiing equipment and operates several sites for other types of outdoor sports gear—such as for snowboards, for mountain bikes, and for road bikes—set up its LivePerson live chat system to route chat requests from each web site to agents specialized in that site's product line. "When chats come in from each sport site, the bike chats go to our bike experts," says Mike Sherwood, director of customer experience at, a unit of Liberty Interactive Corp.

The routing system forwards chats as well as customer service phone calls based on the web page a customer is on, so that someone on a page showing mountain bikes is automatically routed to a bike expert, if one is available. The challenge for Backcountry is having enough available experts in any given area, though with 270 agents (half handle chat, half phones), the system has worked pretty well, Sherwood says.

One way it addresses any voids in the availability of experts is to rank all of its agents based on their level of expertise across multiple sports, with the highest rating a 10—for a multi-sport expert, for example, who rides mountain bikes, climbs and camps in the summer and skis in the winter. If a customer requests a chat session from a mountain bike page and no bike expert is available, the routing system will search for an agent with the highest score. "Our routing system will look for who's available who's a 10, and if no 10 is available, it will look for an expert who's a 9 or an 8," Sherwood says.

Top dog

Retailers also can learn from reviewing chat sessions how agents can better help customers. Using its LivePerson live chat system to run reports on chat sessions, and seeing which resulted in sales conversions and which appeared to leave a customer unsatisfied, Petco has been able to develop better ways to assist customers on particular products lines, such as fish aquariums and dog collars and leashes. "We realized that many agents didn't really know what a customer needed," Grisko says.

By reviewing chat session content regarding dog collars and leashes, for instance, Petco developed a flow chart that agents can use to match a customer's pet needs with the right products. Agents now use the chart to determine, for example, how big a dog is, whether the dog pulls on a leash when it's being walked, and whether a customer prefers a long leather leash or a retractable fabric leash. "This has helped conversion rates, but it has also helped to keep customers happier and probably results in a happier dog, too," Grisko says.

LivePerson's live chat software starts at about a few hundred dollars or less per month for small retailers, and runs up to several thousand per month for mid-size companies, according to Barry Lamm, director of excellence for LivePerson.

More retailers are learning directly from customers how effective chat sessions are. Backcountry, for instance, routinely asks customers to comment on how Backcountry could improve its customer service. Each live chat session includes a built-in invitation in the chat window to fill out a brief exit survey, and the system automatically forwards to a supervisor any survey form on which a customer checked off having a negative chat experience. Though such cases are not common, Sherwood says, the supervisor in that situation would discuss with the agent what occurred during the chat and then contact the customer to work things out.

"We get one chance to make a problem right for a customer," Sherwood says, "and if we do it well, we'll get the customer for life."




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