IM for Business Takes Off

Technology can boost but also overwhelm e-biz

If theres one valuable lesson Alaska Airlines Jim Quentin has learned, its this: Be careful when you reach out to consumers with cutting-edge technology; the experiment may soar in directions you never expected.

The airline, one of the first to sell tickets online and to promote Web-based check-in, in January made a move to improve online service by allowing customers to interact with agents using instant messaging. The response was sky-high—but not exactly what the airline intended.

Instead of using the real-time chat as an aid for navigating trouble spots on the site, many customers bombarded the call center with inquiries on everything from current weather conditions in their destination city to the name of the man portrayed in the airlines logo. The effect was the opposite of what Alaska Airlines intended, as customer service agents found themselves waylaid answering pointless questions.

"The first day, there was something like 400 to 500 chats that werent beneficial to us or to the customers—they were not solving any pain points; they were just chats," said Quentin, manager of Alaska Airlines Web help center, in Seattle.

Aiming Higher

Instead of grounding the IM capabilities, however, Quentins crew made some tweaks, reining in the number of points where customers could initiate chats on the site. Months later, as a result of the changes, IM is no longer a quirky nuisance but a useful tool that helps customers through the rough patches on the companys site so they can more easily complete a variety of Web-based transactions.

While certainly one of the first, Alaska Airlines, a division of the $2.2 billion Alaska Air Group, isnt the only company experimenting with business applications for IM.

The technology lets people detect if contact is online, then initiate an exchange with individuals or a group in real time, much like a phone connection.

IM has achieved near-cult status among consumers—particularly with teenagers—thanks to services pioneered by America Online Inc. and now Microsoft Corp. and Yahoo Inc. As enterprise software vendors release products that integrate the technology into call center and customer relationship management applications, IM is starting to land on the radar screens of companies looking for cost-effective and easy-to-implement ways to improve customer service.

Answering customer instant messages, experts say, can be less expensive than taking their phone calls—either over the traditional voice network or via the Web—because agents can handle more than one session at once. And because its immediate, it can be more effective than e-mail, particularly in situations where customers may be frustrated or impatient.

"Instant messaging gives customers more choices about how they communicate with the companies they do business with," said David Ferris, president of Ferris Research Inc., a San Francisco market research company specializing in messaging and collaboration technologies.

"At the same time, it opens up options for companies to drive down the cost of interacting with customers, or for the same costs, to improve that interaction."

Analysts expect a boom in IM in the corporate space over the next year. A lot of that growth will be fueled by Microsofts announced plans to fold Windows Messenger—which extends IM capabilities to telephony, videoconferencing and collaboration—into its Windows XP upgrade, due in October.

According to Forrester Research Inc., of Cambridge, Mass., by next year, IM tools will displace many browser-based customer service chat systems, which cant deliver the same kind of immediate interchange.

International Data Corp., of Framingham, Mass., is equally bullish on the technology, projecting that more than 2 trillion instant messages will be passed between consumers and businesses by 2004, with a total of nearly 400 million IM clients in use in that time frame. Business use, while currently only 20 percent of the IM traffic, should grow to be 50 percent of all activity by 2004, IDC says.

Taking Flight

If Alaska Airlines experience is any indication, e-businesses embracing IM may experience a slightly bumpy ride before the technology begins to pay off.

The idea to implement IM came on the heels of the airlines launch last November of, an online customer portal intended to simplify and streamline the process of customers entering preference and purchase information. Instead of finding things easier to navigate, however, customers initially were getting stuck within the profile screens and were unable to complete Web transactions.

Within a few weeks of the launch, complaints escalated, and Quentins team quickly went in search of a fix to avoid alienating the airlines best customers. After considering several voice-over-IP products, Quentin determined he wanted a more cost-effective option.

Quentins team launched a full-scale evaluation of several IM products, including those from Cisco Systems Inc. and eShare Communications Inc. Alaska Airlines ended up going with FaceTime from FaceTime Communications Inc., of Foster City, Calif., a hosted service that, much like a telephone switch, manages and routes IM messages from consumer networks such as Microsofts and AOLs to the appropriate parties within an enterprise.

Up, Up and Away

The fact that FaceTime is a hosted service meant the airline could be up and running quickly with IM. The chat capabilities were put online within a month. After the initial unexpected response to IM from customers, Quentins team realized it had made a mistake by putting the icon for IM capabilities at too many points on the site—18 altogether. That led to the flurry of wasteful interaction. Within 72 hours, Quentins team scaled that back to only four key areas where users typically got stuck: in the creation profile; upon purchase; at Web check-in; and in, an area where customers can trade Alaska Airlines points with partnering airlines. A fifth area, for redeeming frequent flier miles, will be released this month, with IM capabilities.

"We learned very quickly that you should only put chat on the site at strategic points where customers legitimately need help," Quentin said.

IM volumes at Alaska Airlines are still pretty low—about 100 to 150 chat sessions a day. And Quentins team hasnt yet attempted to quantify customer satisfaction. Still, Quentin said, the company believes the IM technology is paying off. Web representatives are improving the customer experience, sometimes multitasking to help two or three people at once. And they are able to use the FaceTime technology to push pages to customers in real time. So, for example, if they had a question about the best price for a given flight, they would automatically be presented with the Web specials page featuring low-cost fares.

"Sometimes, a picture is a whole lot better than words," Quentin said.

The airline aims to conduct 20 percent of its business online by years end, and Quentin said the new IM capabilities are just another tool to help it reach that goal. After that, he said, its anybodys guess how and where IM technology will next spread its wings.