Fewer Busy Signals

May 10 2000

Looking to cash in on the bargain basement tech stock prices at an online brokerage? Already a savvy trader but unsure of how much margin you can trade on? Financial services are leading the pack in offering multiple customer service channels.

In 1999, San Francisco-based online brokerage firm saw a 209 percent jump in online transactions - averaging 133,000 per day. Hence it was no surprise that the company's cost of services, which includes customer service activities, increased 117 percent to $107.1 million.

According to Connie Dotson, chief service quality officer at E-Trade, over 300 customer service associates were hired in the past quarter alone. This raises the headcount to approximately 1,300 employees under her wing. Dotson is in charge of managing all of E-Trade's customer service, including online self-service, chat, e-mail and call centers; the main thrust is directing customers online.

"A lot of our customers are self-directed and the online help is just part of how we do things," Dotson says. "The Knowledge Center, a database of E-Trade's products and services, uses a natural language-based search engine called Ask E-Trade." The database is updated regularly by product development staff; it also links to outside information sources like the Securities and Exchange Commission and the Chicago board of Options Exchange.

E-Trade is also investing in other technologies, such as text chat; voice over Internet; and "co-browsing," where a rep can take over a consumer's browser. These enhancements may be functional by the end of the year at the earliest. "The human touch is absolutely necessary, but you want to absolutely maximize the online options," Dotson says.

Telephones rang off the hook in mid-April when Nasdaq took most investors for a ride. To service peak times, E-Trade has cross-trained employees not normally in Dotson's department to provide customer service. In addition, E-Trade routes telephone inquiries to call centers with the lowest volume. For instance, new customers often want to speak to a real person to walk them through the online trading process for the first time.

Yet, these options are leading edge. Only 37 percent of Web businesses currently have three or more customer service channels, according to Jupiter Communications. And phone support, as evidenced by E-Trade's push toward online solutions, is on the decline; only 50 percent of financial services Web sites offer toll-free phone service, down from 92 percent in 1998.

Indeed, according to Dotson, 99 percent of E-Trade's contact with its customers happens electronically. And that number will probably remain constant. While Jupiter analyst Cormac Foster readily admits that there's a significant cost savings in online customer service options, he also anticipates a decline in quality if the technology is not used appropriately.