CUSTOMER CARE, INTERNET STYLE.

From today's vantage point, it's hard to believe that only a decade ago, surfing the Internet was a hobby reserved for university researchers and technology wizards. Only five percent of homes in the United States had personal computers. Paying a bill or requesting a service was handled via old-fashioned postal mail or the telephone.

Time marches on, and one can't help feeling a bit overwhelmed. A Forrester Research study has found that today, only 10 years later, a full 60 percent of American homes own or have regular access to a personal computer. Additionally, researchers now believe that by the end of this year, a full 50 percent of the U.S. population will be online, using e-mail as a primary communications resource -- generating more than 500 million messages a day. In the U.S. alone, over 50 million e-mails will be product-inquiry or customer-service-based.

The Internet is increasingly becoming the mainstream medium for selling and purchasing goods and services, for providing technical help and for caring for customers.

Fixed-Line Limitations

For decades, customer service over the telephone centered on answering customer complaints regarding quality of service, the performance of a product or the monthly bill. Customer service agents were, for the most part, busy with complaint resolution.

As our homes, offices, schools and retail operations have embraced increasingly sophisticated technology to improve everything from learning to productivity and the bottom line, customer care has changed and continues to evolve. Now, customer care is no longer merely the answering of complaints from a customer who is unhappy; it is also about answering questions from a customer who is uncertain how to navigate through a software package or program a device such as a DVD player or a mobile phone. Answering some of these questions may require the assistance of a diagram on a Web page that is "pushed" to the consumer by a customer service representative, the download of a user's manual or a recorded explanation delivered via streaming video. The traditional phone set alone has become a limiting device for customer care agents and the customer.

The Internet has become the medium that has taken customer care to the next level, where voice, video and data can be combined to improve communication, understanding and customer satisfaction. As increasingly high-tech and sophisticated Web-based tools such as streaming video conferencing and virtual agents become available, the Internet will continue to evolve as the customer service solution of choice. Additionally, as a bonus for service providers, customer care over the Internet is helping control the costs associated with providing customer care in a new age of competition, mounting customer inquiries, increased consumer expectations and dwindling customer patience.

New Methods

Since the 1990s, techno-wizards have been working hard to turn Internet technology into one solid, simple global communications system. While there remain some issues regarding quality of service, these limitations are disappearing.

To take increased advantage of Web-based customer service, companies are looking at their contact center operations and determining how to transition to an IP-enabled contact center.

An IP contact center essentially routes voice communications internally in the same fashion as current data communications -- everything is converted to IP data packets and transmitted over the same type of network that a personal computer uses. The traditional analog phone is no longer necessary, and is replaced by either an IP phone or a multimedia PC.

An IP contact center uses voice-over Internet-protocol (VoIP), which links direct phone call capability to business Web sites. Essentially, VoIP is the same as making a phone call over the Internet while browsing a business' Web site, a method that has led to the ultra-high service level concept of collaborative browsing with skilled customer care agents. Additionally, live text chat with agents has become a method of choice for personal, Web-based customer service.

The continued evolution of the Internet-enabled contact center will bring greater customer care variety, including:

* Improved self -service. The customer will be better equipped to find his or her own answers -- search engines, natural language processing and virtual representatives will better help customers help themselves.

* Deferred service. The customer places a question and waits for information to be delivered at a later time--e-mail, queued Web response, scheduled callback, Web seminars or chat sessions.

* Assisted service. Live, real-time interaction with an agent, including live text chat, voice-over Web applications, collaborative browsing and streaming video conferencing.

Should You Go It Alone?

The idea of investing in and operating contact centers in the future -- especially those that are IP-enabled -- may seem overwhelming to you, particularly in light of some of the complex and expensive technologies emerging. Ultimately, the decision to go it alone with an in-house operation or to partner with an outsourced support operation will be based on how comfortable you are with the price of the technology, salaries of the service representatives and the office space to house your center. In addition, you must consider the time and expense to manage what is becoming a highly mobile workforce in a relatively tight labor market.

In today's dynamic and expensive Web-powered marketplace, outsourcing is becoming an increasingly attractive option for customer care, particularly among the more high-tech methods of customer communications. The technology is constantly changing and the demand for superior customer service is becoming increasingly important, particularly during today's flattening economy.

By oursourcing, a company can concentrate its knowledge capital on growth strategies, pricing, product development and delivery issues.

Many service providers today are realizing that resources devoted to internal support of processes like customer service are expensive and difficult to execute well in a tight labor market with high turnover. Outsourcers are experienced and effective at managing highly mobile and often very remote human resources. Some companies have successfully turned to locations such as India and the Philippines for agent support.

India, for example, has an extremely well-educated and technology-savvy workforce. Contact center workers have been educated to speak unaccented English. Because the cost of living is far less than in North America and most European countries, operating a contact center there is beneficial for the provider, who can enhance profitability, and the customer, who receives quality service and a faster response time. In the end, the local economy benefits from the creation of additional jobs.

When deciding whether to outsource their contact center functions, companies should consider several issues:

* Teaming with a service provider can free up resources. This allows the service provider to focus on its core competencies and grow the business. After all, without customers, there really isn't much need for customer care.

* Economies of scale can lessen your risk exposure. As internal call centers evolve to provide both inbound and outbound services, staffing requirements will fluctuate in new ways. Service providers looking to meet these staffing challenges will find that outsourcing the contact center functions -- and the staffing fluctuations that go with them -- can save money and increase efficiency. Because of economies of scale, the staff size of an outsourced contact center can more easily ebb and flow with planned customer service programs, eliminating the need for utility managers themselves to be concerned with staffing fluctuations.

* Customer care should be accountable. In exchange for your business, an outsourcing company can provide you with predictable costs and performance guarantees.

* Capital investments in technology can be lessened. A partnership with an outsourcer gives access to advanced technology without additional capital expense.

We've Only Just Begun...

A recent study by IDC indicated that currently only 40 percent of U.S. and Canadian businesses with Web sites conduct commerce activities on the Internet. While that number is predicted to rise to 50 percent within a year, there is still huge potential for Web-based customer contact, particularly as other studies indicate that it is the single most popular medium among consumers. The same study predicts that while 50 percent of the populations of the U.S. and Canada will carry wireless devices by 2003, less than 10 percent of Web sites have any special accommodations for wireless users. It's obvious that despite the distance customer care has already traveled over the Internet, the journey has still really only begun.

Randy Mysliviec is senior vice president of marketing at Convergys Corporation (www.convergys.com). Convergys is a provider of outsourced, integrated, billing and customer care services. Convergys contact centers handle more than 1 million customer interactions each day.