Chat for Sales, Not Service

"Online chat" is one of the technologies bankers will encounter when they start evaluating systems for handling increased e-mail volume from customers. So-called instant messaging allows people to correspond with each other over the Internet in real time, as opposed to the delayed response that occurs with traditional e-mail. It has been proposed that bankers use online chat to answer customer inquiries.

Institutions have discovered, however, that online chat works better in a sales context, or for assisting online applications, than for traditional customer service or complaint resolution. "We only use it for sales and find it very efficient," says Ted Josephson, vice president of e-business at Bridgeport, Conn.-based People's Bank, the operating subsidiary of People's Mutual Holdings. "With potential mortgage customers, for example, it's very useful in explaining our mortgage products and how to apply for one."

NetBank Inc. sees similar advantages in using chat for sales. "There is no doubt that chat is the most expensive media in which to communicate with customers. But it can also be the most effective when you need a certain amount of back-and-forth communication," says Ginny Johnston, executive vice president for customer care at the Atlanta-based Internet bank.

In addition to the upfront costs of about $2,000 per service representative, plus a monthly fee of several hundred dollars per operator for an average system, online chat systems tie up a lot of employee time. "The problem with chat is that you respond to a communication and then have to wait until you hear back again from the customer. That's not always efficient," Johnston says.

Customers sometimes exacerbate this problem by finishing their chat sessions without signing off or notifying the agent they are through, which leaves agents hanging. NetBank deals with this problem by automatically sending customers a notice 45 seconds after their last communication, asking if they are through. If the customer does not respond after two notices, the chat session is closed.

Given those complications, institutions such as People's Bank and NetBank do not use online chat to respond to routine customer inquiries. "It can eat up your resources if your customers use it for trivial matters," says People's Josephson, who estimates his $13 billion-asset institution spends about $20,000 a year for online chat support.

— Lauri Giesen