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In tough economic times, companies are turning to e-service to alleviate the high cost of customer service. E-service handles customer service interactions over the Internet -- chiefly through email and Web self-service. Email customer service systems use automation to organise and respond to customer inquiries via email Web self-service lets customers look-up answers to questions they may have about a company's products or services by interacting with what's basically an online help system.

In the past seven months, the number of sites offering searchable self-service has grown from 13 percent to 32 percent, according to a report from Jupiter Research. Jupiter also found that 92 percent of the sites offering self-service offer email as a customer support option.

When used properly, e-service can reduce the cost of service and improve its quality.

"Most enterprises consider self-service a success if they can use it to deflect anywhere from 10 to 25 percent of the interactions usually handled through their call centre," says Christopher Olin of Kana, an e-service vendor.

From some perspectives, e-service can also be considered an advantage for the customer. Web self-service suits people who would rather look up information on their own than talk to a service agent. And both Web self-service and email let customers get answers to their questions while they're online. Most Internet users don't like to switch to the phone to resolve customer service problems. That's particularly true for consumers with dial-up lines because they can't simultaneously talk on the phone and stay online. Self-service facilities are also available around the clock, whereas live help usually keeps regular business hours.

However, e-service has its pitfalls, most of which revolve around auto-responses.

Auto-response is a feature of e-service that automatically analyses customer queries and offers a solution. It goes farther than an auto-acknowledgement, which is an automatically generated email that lets customers know their message has been received and when to expect a response from a customer service agent.

Auto-response systems can easily misinterpret customer queries. Sometimes the customer's wording is the problem -- an incomplete or inaccurate query will inevitably prompt an inappropriate response. But customers with complex circumstances are also poorly served, as self-service systems often can't analyse anything that veers from the standard. Boilerplate answers are usually too general and can ignore major facets of the customer's situation or request.

And off-target auto-responses can have consequential results.

"Usually customers aren't angry when they first send in their email but it's something in the company's response that makes them angry," says Anand Subramaniam of e-service vendor eGain Communications.

An auto response that ignores a customer's issue comes off as a rebuff or a cavalier lack of concern. The inevitable result: lost customers or customers who won't buy as much.

As a result, enterprises that have experience deploying e-service applications are moving away from auto-response.

"In the past, we saw more companies using auto-response because they were thinking about managing online growth instead of thinking about the long-term value of the customer," says eGain's Subramaniam. But as online activity matured, companies learned that auto-response was counter-productive for retention, and they now don't use it as much, he adds.

Many service-oriented enterprises find that replacing valued customers is just too expensive to risk alienating them with an auto-response system.

Auto-response is chiefly a risk when it's pushed beyond its limited capabilities. If used properly, it can still be a valuable customer service tool. Here are five guidelines to setting up a successful auto-response system:

1. Keep it simple. "Start by looking for high volume, low complexity activities. Those are perfect for self-service," says Timothy Hickernell senior program director at the Meta Group.

2. Manage expectations. Avoid using language that indicates that an auto-response is a certain answer. Auto-responses work best when they are positioned as suggestions. They may help customers solve the problem so they don't have to wait for a thorough response from a customer service agent.

3. Build a strong knowledge base. "Any auto response is only going to be as good as the system's search capability and knowledge base. If it's only a FAQ, it won't work," says Joanie Rufo, research director at AMR Research.

4. Test. Test the auto-response system thoroughly before unleashing it on customers. The best way to test answers is use them in auto-suggest implementations that support live customer service agents by proposing potential solutions that the agent can use to respond to customers.

5. Make it easy to escalate. When customers are stymied by an auto-response, they will quickly look for a way to contact a real person who can better evaluate their situation. The best way to prevent customers from becoming frustrated is by facilitating real contact with an obvious button or link.

Above all, keep in mind that auto-response is not an end in itself but only one option within e-service. Enterprises don't need auto-response at all to get the benefits of e-service. And unless auto-response is used carefully, it's probably wise to avoid it.

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