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Case Study: How an ISP Used Online Chat to Lower Customer Service Costs and Achieve an 80% Customer Satisfaction Rate

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Company: Earthlink, Inc.
Contact: Dave Flammia, Director of Call Center Innovation
Location: Atlanta, GA
Industry: Internet (B2B, B2C)
Annual revenue: $1,300,000,000
Number of employees: 2200

Quick Read:

Earthlink is one of the country's smaller Internet service providers, serving just over 5 million customers. As such, it needs to differentiate itself—and has decided to do so by providing superior customer service. As a public company listed on NASDAQ, it is also under constant pressure to improve service without adding costs.

An early adopter of chat technology, Earthlink has sought to actively offer efficient online customer service via chat technology, encouraging customers to help themselves. In the process, it has been able to shift customer support away from the phone channel, increasing customer satisfaction and dramatically reducing expenses. The cost of each service chat is about one-third that of a phone contact.

The Challenge:


The Internet sector is one of the most competitive. How does a small ISP stand out? By marketing and truly offering an efficient self-help experience for its tech-savvy audience.

"We really pondered how do we make self-help more useful to our customers, and we saw proactive chat as giving us an edge," said Dave Flammia, Earthlink's director of call center innovation.

In September 2006, EarthLink sought to develop a service application to reach customers who were likely to abandon online self-service, or skip it altogether. If successful, the service would allow the ISP to reach out to online customers proactively—before they reached the point of frustration—providing Earthlink with additional opportunities to build customer loyalty.

The Campaign:

Earthlink's customer support center is a vital operation that impacts the company's bottom line. In a typical week, almost three million consumers visit Earthlink's Web site, which highlights the firm's available service offerings—a big opportunity to increase loyalty with good service.

Flammia saw the Web site as a place where customers and potential customers could be pushed toward an interactive chat experience, giving his company a chance to demonstrate its reputation for superior customer service.

"Chatting with an agent is literally that," said Flammia. Working with Live Person, a hosted technology firm that specializes in chats, Earthlink helped to develop a software program that automatically targets customer "hot leads," so that a service opportunity was offered to customers when it appeared likely that they needed it.

A hot lead includes a customer who needs password help, clicks on a voice support phone number link, or sits on a knowledge base article for more than 90 seconds ("someone whose online behavior indicates they need help," as Flammia described it.) At that point, the customer receives an invitation to chat, but only if there are chat agents available to help.

The initial program actually reduced Earthlink's call center costs. That's because each chat costs about one-third of a typical customer support phone call; moreover, chats usually last about 15 minutes and result in a first-contact resolution rate that, on average, is higher than similar voice-support contacts.

Chat support costs less in part because each agent can typically chat with at least two customers at once, and support chats are specifically routed to agents trained to handle the particular problem.

Between September 2006, when the program began, and early this year, Earthlink averaged an invitation rate (the number of invitations offered divided by hot leads triggered) of between 40% and 44%. But Earthlink realized it was leaving potential "conversions" to chat on the table.

Over an eight-week period earlier this year, Earthlink was able to raise its invitation rate from 44% to 97%—that is, almost every time that a customer was determined to be a hot lead for chat support, an invitation to chat was offered. The company considered that rate a success because it significantly reduced customer support phone calls.

Over those eight weeks, Earthlink had to increase its support staff by about 75 people—but thought it worth the effort due to the increased level of customer satisfaction and higher conversion of voice support to chats.

Earthlink markets this service by strategically placing invitations to chat on its Web site. Also, the company has taken most phone numbers off email invoices and billing documents and replaced them with a link to launch a live chat.

"Customers are online already, so we've learned that it is easier for them to chat rather than pick up the phone and call us," Flammia said.

The company considers conversions to chat a win-win. "Everybody wins... our customer's win because the chat invitations target specific customer needs, thereby increasing their overall satisfaction. We win by including a comment section in our chat exit surveys, enabling us to learn from our customer feedback," Flammia said.

Earthlink anticipates it being able to bring proactive chats even further in the future. "We think that the next wave for interactive chats is that customers will be offered smart use of forms." Flammia predicted." There will be avatars that use logic to answer typical customer questions, as a form of automated help, and if that doesn't work, live chat agents will be immediately available as the next line of support for our customers."

The Results:

Reinventing Earthlink's customer call center to focus on chats has resulted in a 20% reduction in costly customer calls while consistently delivering a high level of customer service. Subscribers who use the chat channel represent an upscale demographic and demonstrate a higher propensity to buy additional Earthlink services.

The company boasts a chat customer satisfaction rating above 80%, which is derived from its exit surveys. About 12% of consumers who chat with Earthlink agents complete the exit survey, a very high rate compared with industry benchmarks.

Lessons Learned:

For companies thinking of launching chat services, or for those that already offer it, Earthlink's experience offers some lessons:

  • Be strategic in terms of where your launch points are for chats on your Web site and where your self-help tools are. Make sure it is rewarding from the perspective of your customers.
  • Train your online customer service representatives to efficiently handle the problems usually mentioned in chats. Good training for your reps will lead to a good resolution rate, which makes the experience rewarding for the customer. "We have found customers will continue to utilize chats as a primary customer service method (vs. phone calls) as long as the reps can solve the problem," said Flammia.
  • At the same time, be wary about expecting your reps to handle too many chats at once. While some Earthlink reps can handle three customers at once, Flammia said, the company has found two simultaneous chats to be the "sweet spot."

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