online customer services solutions buyer's guide 2005

8/9/2019 Online Customer Services Solutions Buyer's Guide 2005

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Buyer’s Guide: Online Customer Service Solutions (2005)

Table of Contents

1. Introduction ...................................................................................................... 2

1.1 About E-consultancy ...........................................................................................3

2. Executive Summary .......................................................................................... 3

2.1 Further Reading...................................................................................................4

3. The Market ........................................................................................................5

3.1 Market Definition..................................................................................................53.2 Market Value ......................................................................................................53.3 Market Growth......................................................................................................63.5 Return on investment: the benefits of online customer service best practice . . .7

5. Finding the Right Company and Solution ..................................................... 8

5.1 Introduction..........................................................................................................85.2 What does your organisation really need?...........................................................85.3 What kind of a vendor are you looking for?..........................................................85.4 Is there sufficient buy-in within your own organisation?.......................................95.5 What additional resources may be needed to manage the software?.................9

6. Market Positioning Charts .............................................................................11

6.1 Explanation for Chart 1 – Business Model ........................................................116.2 Explanation for Chart 2 – Business Focus.........................................................126.3 Explanation for Chart 3 – Geography.................................................................136.4 Explanation for Chart 4 – Company Culture.......................................................14

8. Supplier Marketplace and Profiles .............................................................. 15

8.1 SAMPLE VENDOR PROFILE............................................................................15

1. Introduction

E-consultancy’s buyer’s guides are the ideal starting place for anybody researching new suppliersin interactive market sectors.

They contain in-depth vendor profiles, to help you quickly evaluate suppliers and serviceproviders, as well as market analysis to help you put things into perspective.

Vendors are selected for the report based on a combination of factors, not limited to but including :

• Analysis of capabilities (services / products)

Copyright © E-consultancy.com ltd 2005 – not for distribution to non-subscribers without written permission 2

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• Clients• Experience (qualifications / trade bodies / case studies / client lists)• Expertise (by sector / topic),• UK status (a UK office is preferred, occasional exceptions are made)• Ability to take on and fulfil new projects• Recommendations from trusted sources (or anecdotal evidence to the contrary)• Google visibility• Business model (a high % of turnover should be related to these services)• Company website

E-consultancy does not explicitly recommend any of the suppliers featured in these guides,principally because it is impossible for us to work with all of them to form a first-hand opinion. Butwe do believe - based on an intensive and careful selection process - that the chosen vendorsrepresent quality.

Buyer’s Guides are updated on an annual basis, so the information contained within is recent andthus valid.

Send any questions or comments to [email protected].

1.1 About E-consultancy

E-consultancy is the UK’s leading online publisher of best practice internet marketing reports, research and how-to guides. It also publishes buyer’s guides and has a directory of 100,000+third party internet marketing white papers.

Since moving to a paid-content model in 2003 E-consultancy has amassed thousands of payingsubscribers, around 30,000 registered users and 115,000 unique users sessions per month. Itsweekly newsletter is sent to 21,500 users. Subscribers pay from £99 per year to access theexclusive and highly practical content, which helps internet marketers get the most out of their websites.

E-consultancy has around 70 events lined up for 2005, including roundtables and monthly

‘Supplier Showcases’, where six suppliers pitch to an audience of pre-qualified buyers (typicallybetween 100-200) in a Central London venue. E-consultancy also provides a range of in-housetraining programmes, such as seminars and workshops.

E-consultancy also offers a range of web consultancy services to companies including major FTSE100 brands and small start-ups, including market and competitor research, websiteoptimisation, customer journey analysis and strategic planning.

http://www.e-consultancy.com/about/

2. Executive Summary

The UK market for Online Customer Service Solutions is now growing exponentially asorganisations increasingly realise that they can gain significant competitive advantage fromthe latest technologies.

Vendors and other market experts report that sales growth has accelerated over the last fewmonths, with the financial services sector leading the way on spending.

After several years of slow progress for many vendors, the market has now reached a ‘tippingpoint’ because many organisations are now confident that the technology can help them reducecosts and increase sales, as well as delivering a host of less tangible benefits.


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E-consultancy estimates that the now-buoyant UK online customer service solutions marketwill grow by 100% in 2005 to £120m, from a base of around £60m in 2004.

*This figure reflects the total revenues of the vendors operating within this market including thosecompanies for whom OCS solutions are only a proportion of their total income. It also includesmoney spent in-house by organisations striving to improve their online customer servicecapabilities.

Trends within these markets include:

• Widespread use of OCS solutions by companies in the financial services and telecomssectors (known for being early-adopters of technology to get the competitive edge).

• Increasing importance of web analytics to help businesses understand their customers and improve their value proposition. OCS is a natural next step for companiesthat understand how visitors are behaving online, to push them towards becomingcustomers by increasing interaction / self-service.

• Growing uptake of these solutions by SMEs due to increased appreciation of the

benefits and more affordable pricing models. These tools might generate someinstantaneous cost benefits for a FTSE100 telco with a 4,000-seat call centre, but theyare also readily available to smaller businesses.

• Use of OCS software to ensure compliance with regulators by reducing the risk of inaccurate information being passed on to customers. An auditor’s dream.

2.1 Further Reading

E-consultancy publishes reports, hosts events and provides internet marketing consultancyservices to help companies work smarter and get the best out of the web. Some related reportsto help you improve the customer experience include:

• Online Marketing Masterclasses – Presentations (November 2004)

• Usability & Accessibility – Roundtable Output

• Email Marketing – Roundtable Output




http://www.e-consultancy.com/publications/online-marketing-masterclass-2004/masterclasses.asp

http://www.e-consultancy.com/publications/usability-and-accessibility-roundtable/


http://www.e-consultancy.com/publications/email-marketing-september-2004/




http://www.e-consultancy.com/publications/online-marketing-masterclass-2004/masterclasses.asp







3. The Market

3.1 Market Definition

As its name suggests, this guide is broadly focused on Online Customer Service (OCS)solutions. The market predominantly includes vendors specialising in web self-servicetechnology, offering solutions that meet the informational needs of customers and customer-facing staff such as call centre employees.

The market includes vendors who, typically, specialise in virtual interactive assistants,intelligent FAQs, knowledge management and/or email response management solutions.

This market is a discrete part of the larger e-services market and, despite inevitable overlap,operates separately from the wider CRM market that is more geared towards internal functionssuch as customer data and marketing automation.

In terms of company profiles, this guide concentrates for the most part on vendors with a UKpresence whose focus is online customer service solutions and therefore does not cover the

largest e-service players such as Oracle, Siebel Systems or PeopleSoft.

3.2 Market Value

E-consultancy: Online Customer Service Solutions UK market was worth £60m in 2004, tosurpass £120m in 2005

Our valuation of £120m for 2005 reflects the total revenues of the vendors operating within thismarket including those companies for whom OCS solutions is only a proportion of their totalincome.

In some cases revenue figures have been estimated, for example where OCS solutions within

the UK represent only a fraction of a company’s total income and the breakdown of revenues isnot made public.

The total also includes money spent in-house by organisations as part of their IT or marketingbudgets. We reached our total after directly consulting with key figures (largely CEOs anddirectors) working within this market.

Previous forecasts have not concentrated on the UK, which continues to lag the US somewhat(the US market was expected to grow to $2.8bn by 2007, according to a 2003 report by Jupiter).


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3.3 Market Growth

The market could be growing as much as 300% per year…

The consensus within this industry is that the market is in the ‘early majority’ phase of its lifecycle

and has now reached a ‘tipping point’.

Large organisations are now deciding ‘when and how’ they should introduce latest generationOCS solutions rather than debating ‘if’ they are a good idea.

Leading UK vendors are generally extremely bullish about their growth prospects for 2005,anticipating growth rates of up to 300 per cent .

E-consultancy believes the market as a whole will double in size this year largely on the back of asurge in interest from financial services and telecoms companies, which want to gain acompetitive advantage by improving customer experience. This is beneficial to customer lifetimevalue and loyalty, plus, it almost immediately reduces the offline customer service cost base inmany instances.

Vendors also report growing sales in the entertainment, public sector , automotives andhealthcare verticals.

After a disappointing start to last year, vendors typically report that the market finally turned thecorner in the last quarter of 2004. Many of the players who are still operating in this marketsurvived what was an initially slow uptake of their solutions by reducing their costs andsometimes taking on debt.

As the corporate appetite for online customer service tools increases, vendors are now bolsteringtheir sales capabilities either by recruiting new staff or forming partnerships with other companiesas an additional channel to market.

Among those most upbeat about the prospects for the market is Dr Davin Yap, one of the

founders of Transversal. He said: “Organisations are starting to get it. Right now we are getting to a point where it is starting to pick up in terms of people setting aside time and budgets for customer self-service initiatives. That wasn’t the case a year ago but it is now. I estimate that themarket is increasing by 200-300 per cent a year.”

Alf Saggese, Senior Vice President (EMEA) at KANA, added: “Investment in customer service isset to increase rapidly during 2005. As businesses realize that the real ROI on CRM comes from

providing positive and rewarding customer experiences, decision makers will focus their attentions on the technologies that improve their existing CRM systems and deliver better service.”










3.5 Return on investment: the benefits of online customer service bestpractice

Online Customer Service Solutions can offer organisations a number of advantages ranging from

highly tangible cost savings to softer benefits such as improved brand perceptions. The actualtime it takes to make your money back will vary between technologies and vendors.

• Reduces customer service costs

o The cost of the average customer interaction by telephone is estimated to bebetween 20 and 40 times more expensive that a web self-service interaction

o Increased availability of phone operators for most valuable customerso Minimising burden of email by grouping and automatically diverting to most

appropriate customer service staff o Reduce call centre training costs

• Increases revenue

o Generate leadso Opportunities for cross-selling and up-selling either online or by escalating to a

sales agento Boosting conversion rateso Ability to take customer along ‘a path to purchase’

• Increase customer satisfaction and customer retention

o A happier customer is more likely to spend moneyo Software enables users to get answers to questions more quicklyo Increases customer loyaltyo A happier customer is less likely to defect to a rivalo It is cheaper to retain customers than acquire new ones

• Improving customer and competitor intelligence

o Gain invaluable data about customer behaviour and attitudeso Information can be more insightful and actionable than traditional web analyticso Learn what your business proposition is missingo Increase knowledge about what rivals are offering

• Minimises risk of regulatory breaches

o Minimise potential for human error o Reduced risk leads to greater shareholder value

• Enhance your brand

o Seamless customer experience and slick technology will help to maintain andimprove perceptions of your company

o Build relationships through engaging users in an efficient & entertaining way





5. Finding the Right Company and Solution

5.1 Introduction

In order to identify the right vendor it is important to understand that different companies havedifferent areas of focus. For example, the company may have a core proposition around either anemail response management system or virtual interactive agents. Other vendors may offer asuite of services covering the whole OCS solutions spectrum.

So, in order to get the right fit with your own organisation, the first step is to identify exactlywhat services, solutions and expertise you need. The detailed company profiles and marketpositioning charts contained in this guide will help you to find the right match.

This section contains some key considerations to keep in mind and some pitfalls to avoid.

5.2 What does your organisation really need?

It is essential to ensure that the technology and solutions you are buying will address anidentified need or issue. Rather than being wowed by a particular piece of software, you shouldensure that the software you purchase will help you meet your business goals in as tangible away as possible.

• Are you looking for a suite of solutions to revolutionise your customer service capability,or do you have a particular piece of technology in mind aimed at addressing a specific tactical objective?

• Do you have a firm grasp of the relative costs of servicing customers by different channels and the potential impact of OCS solutions?

Phil Hall, Director of Elzware, said: "When buying into this technology it is important to berealistic about the capabilities of the conversational interface. Hal or Holly will not be reborn as aself learning and fully autonomous deliverer of all relevant information. The buying organisationshould focus on business topics first, reducing expensive calls to humans and increasing interactivity and feedback. Worrying about whether the technology will pass the Turing Test isirrelevant."

5.3 What kind of a vendor are you looking for?

Suppliers come in different shapes and forms and it is useful to have an idea of the supplier’s

background as an organisation.

• Do you want a global vendor with experience in many markets or would you prefer towork with a smaller company, which operates only in the UK?

• Some companies have had a rocky journey trying to establish themselves in thisemerging market… does the vendor have the stability and resources to service your needs effectively?










• Are you confident that the suppliers you are talking to have experience – and references – in the area your business is trying to address?

• Does the company offer a trial period so that you can properly assess the potential benefits weighed up against the costs and problems?

• If necessary, is it easy to integrate the technology with your existing third party software?

5.4 Is there sufficient buy-in within your own organisation?

These solutions can potentially impact and benefit many different departments of the buyingorganisation including, most obviously, Customer Service, IT, Marketing and Sales.

For example, if self-service analytics are bringing in insightful information then it is no good if it isnot being disseminated to and read by the relevant people within the organisation. Similarly,measures need to be taken internally to ensure that important stakeholders are involved in theimplementation process.

Phil Hall, of Elzware, says: "When dealing with information silos within an organisation it canoften be a struggle, as with any information service, to gather effective data. The application of formal processes to ensure that the right people are asked, and the right people are answered within an organisation is very important."

• What departments will need to buy into these solutions to give the technology the best chance of success?

• Is the initiative being sponsored by someone senior enough within the organisation tomake sure that there is sufficient co-operation to get maximum value from thesesolutions?

• How can you demonstrate the ROI internally so that we can increase the scope of the project and introduce different solutions?

5.5 What additional resources may be needed to manage the software?

The purchasing company needs to be aware that there may be more to managing the OCSsolution than simply ensuring successful implementation. You will need to be sure about whatinternal capabilities you will need to guarantee that things run smoothly.

•Is a technical specialist required to set up and run the system? How many knowledgeengineers, if any, have to be hired to ensure that the software is used to its potential?

• Does the technology update itself or will the company need to keep investing?

• Do you have the processes and resources in place to manage calls when there areescalations?

• If the customer service is around non-virtual live chat, do you have enough staff in placeto service customer needs?










• How much internal manpower will be needed to integrate the technology?

• To what extent does the vendor provide support if there is a problem or query?





6. Market Positioning Charts

6.1 Explanation for Chart 1 – Business Model

The vertical axis of this chart indicates whether the profiled company is more geared towardscustomised software or off-the-shelf software.

The horizontal axis indicates to what extent the vendor sees itself as a consultancy servicecompared to being a provider of software. For example, a position in the bottom right quadrant of this chart indicates a company that has a consultancy approach and offers customised solutions.The red circle indicates the company’s current position while the blue circle denotes where it isheading.


Online customer service consultants& solutions providers

Off-the-shelf software/solutions

Bespokesoftware/solutions

We sell software

Wherewe

are now

Where weare going




6.2 Explanation for Chart 2 – Business Focus

The vertical axis of this chart indicates whether a vendor is focussed purely on customer serviceor offers a wide range of business software solutions.

The horizontal axis shows to what extent the company concentrates on one particular customer service solution. A position in the bottom left of this chart therefore indicates a vendor whose

business is built around one particular customer service solution.


Focus on onlinecustomer service

solutions

Broad range of business software and

solutions

Full range of onlinecustomer service

solutions

Focus on a single coreproduct/solution

Where weare now

Where weare going









6.3 Explanation for Chart 3 – Geography

The vertical axis of this chart shows the extent to which a company’s staff are all in one location.

The horizontal axis indicates what proportion of the company’s work is in the UK.


Majority of our staff arein one location

Our staff arespread around many

locations

All our work isin the UK

A small proportion of our work is in the UK

Where weare now

Where weare going




6.4 Explanation for Chart 4 – Company Culture

The vertical axis of this chart shows the company' preferred working style in terms of whether they are more process-oriented or flexible and ad hoc.

The horizontal axis shows the company’s size relative to its rivals in the market place.


Flexible, ad hocapproach

Predictable & Process-driven

Small compared tocompetitors

Large compared tocompetitors

Where weare now

Where weare going









Please detail to what extentintegration with other software is possible, for example call centretechnologySupport informationDetail about type of UKsupport you provide, e.g.24-hour support desks,web self-service support

Additional Supportive InformationOther information

Types of Tools/Solutions Offered(Answer yes, no, n/a, or add more detail / services where relevant)Knowledge base softwareWeb self-service solutionsIntelligent FAQsMulti-channelCommunication platformsEmail management (routingand automation)Automated SMS/IntegratedAlertsWeb ChatCollaborative BrowsingVirtual Agents/AssistantsAnalytics/customer insightservices/online datacaptureSurvey/reporting toolsKnowledge-base search

capabilitiesCall-me button capabilityPush-to-talk buttonIntegration with sales &marketing (e.g. cross-sell/up-sell)Voice self-serviceMulti-language supportOther (please specify)Product/Solution (1)Product/Solution nameOverviewFeatures

Costs & Pricing methods(please be as specific as

possible)Return on InvestmentProduct/Solution (2)Product/Solution nameOverviewFeaturesCosts & Pricing methods





(please be as specific as possible)Return on InvestmentProduct/Solution (3)Product/Solution nameOverview

FeaturesCosts & Pricing methods(please be as specific as

possible)







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