Priceline.com, the online travel service, has bet its business model on the fact that Web-savvy customers like to help themselves -- in this case, to deals on airfare, hotels, car rentals and the like. The US-based company has extended that model to its customer service operations, adopting an e-service strategy to complement its telephone-based call center. If customers run into trouble during a travel search, they're encouraged to try self-service or e-mail options -- more cost-effective ways to handle services issues -- before resorting to a phone call.

Like Priceline.com, companies everywhere are leveraging e-service technologies -- Web self-service, chat, e-mail response management, collaboration tools, remote diagnostics -- as an alternative to the phone for interacting with customers. One reason is that customers today want the additional channel options that e-service offers them. According to a 2005 survey from Service Excellence Research Group (ServiceXRG), 60 percent of high-tech customers attempt to solve their own problems through self-service knowledge bases before trying interactive channels.

Some vertical industries have been leveraging e-service technologies for some time, and cost reduction has been the primary driver. Conventional wisdom says you can push customers from the phone to lower-cost channels and watch service-delivery expenses drop. However, companies are finding that customer service doesn't conform to such a simple paradigm. To be effective, e-service deployments require considerable investments of time and money -- in knowledge-base creation and maintenance, sophisticated search technologies, incident tracking and workflow tools, and channel integration -- so customers get the same experience regardless of how they contact providers. So although the cost benefits that can result from e-service initiatives have not declined, businesses are increasingly looking at other reasons to justify investments.

In a recent survey conducted by ServiceXRG, 90.4 percent of respondents said customer satisfaction is the leading driver for implementing services such as remote control, chat and collaboration, while 94.4 percent named customer satisfaction as the primary driver for self-service.

"Four or five yeas ago, call deflection was the primary driver [for our e-service initiatives], but now we're looking at what additional value we can bring," says Paul Esch, director of global support services at Nokia. Nokia has invested considerably in its third-party e-service portal and underlying intelligent search and knowledge base.

Large companies making e-service part of their CRM and other customer-facing initiatives have seen solid returns and customer adoption, but they continue to face significant technology and process challenges, according to John Ragsdale, an analyst at Forrester Research Inc. Those challenges include the need to provide agents with a single view into customer interactions, ensure that customer data is consistent across channels, integrate support channels so customers can easily move from one to another, and streamline processes so contacts can be easily escalated along with their associated inquiry histories.

Multichannel integration challenges have been eased by application suites built on systems that provide a common knowledge base, queuing and routing capabilities, and a unified view into customer interactions, regardless of which channel they come from. These suites are available from e-service vendors such as Kana Software and eGain Communications, as well as enterprise application vendors such as Oracle, says Ragsdale. Meanwhile, switch platform vendors, such as Genesys Telecommunications Laboratories, are offering e-mail response, Web collaboration and other e-service tools as part of their infrastructures. Users still face the task of integrating customer-facing databases with front- and back-office databases that inform customer transactions, such as financials and order fulfillment.

To enable knowledge-base queries and create FAQs, Priceline recently deployed Kana Customer IQ, says CIO Ron Rose. That product, along with Kana Response, an e-mail management system deployed in 1999, and Kana's call management application, make up Priceline's Customer Assistance Resolution and Escalation System, or CARES. The system is designed to deliver consistent information whether the customer searches FAQs, sends an e-mail or places a call. It replaces a homegrown call management application and provides a unified view into customer data, as well as into mainframe systems related to its supply chain.

"Handling e-mail workflow is fundamental to anyone whose business relies on the Web -- and these days, that's just about everyone," says Rose. Yet a new study from JupiterResearch says not enough companies do so: According to the research, 92 percent of all Web sites offered e-mail for customer support in 2005, but just 41 percent used automated response to acknowledge receipt of requests. Nearly 40 percent of companies took three days or more to respond to e-mail or didn't respond at all.

Rose says the new IQ module frees agents to deal with more complex problems. And its business-oriented authoring tools free IT from having to develop content for Priceline's FAQs; product management teams can do it instead.

Priceline opted to deploy modules individually rather than choose one monolithic system. "If we were a greenfield company, we might have gone with a system with tighter integration, but we needed flexibility," Rose says. The biggest integration challenges involve bringing legacy mainframe financials and supply chain systems together with the contact center suite, he says.