What Is Knowledge Management?
What is knowledge management and why is important for CRM? There are many definitions, but essentially knowledge management technology helps companies to capture, organize, manipulate, and share explicit and implicit data.
In CRM systems, knowledge management adds the ability to learn from each customer interaction. In CRM, information can be turned into actionable knowledge which can be made available to employees for customer profiling and personalization, or to the actual customer for self-servicing. Over the past few years, knowledge management technology developments have propelled the use of customer self-service, which enhances customer retention rates while driving down customer service costs.
Driving the impressive growth of customer self-service is the boom in knowledge management software, which is exploding in its own rights. IDC predicts the two market segments that make up knowledge management software—knowledge management access and knowledge management infrastructure—will carry the worldwide market from $1.4 billion in 1999 to $5.4 billion in 2004. According to IDC, the knowledge management access software segment will lead the way in terms of revenues and growth and will overtake the infrastructure software segment in 2002.[1] This prediction is significant in that new and enhanced knowledge management software will further drive the self-service functionality within customer contact centers.
[1] IDC Research, October 2, 2000. Found at: http://www.idcresearch.com/software/press/PR/SW100200pr.stm.
Knowledge management technology focuses primarily on the following areas: expressing knowledge, storing knowledge, sharing knowledge, refining knowledge, and retaining knowledge. Moreover, knowledge management technologies allow for multiple data access and retrieval methodologies including keyword search, natural language queries, case-based reasoning, decision-tree reasoning, and expert-based reasoning. Knowledge management technology progressively narrows a user's search down to an answer that is currently held within a knowledge base. For example, a knowledge base can be used to respond to online user queries. If the user querying the knowledge base determines that the response is inappropriate, this knowledge goes into the knowledge base and the knowledge base then searches for a more appropriate response. This process continues until a response to the user query has been found. In some cases, the process may even involve human interaction if an appropriate response cannot be found within the knowledge base. In turn, this solution then gets added to the knowledge base (subject to verification).
Customers appreciate getting answers to their inquiries quickly and correctly. This helps to build customer satisfaction and ultimately increase customer loyalty over the long term. These same customers will increasingly gravitate towards those companies that offer a customer contact center (CCC), particularly a CCC that incorporates enhanced knowledge management tools that facilitate self-service.
The Table 22.1 illustrates some of the pros and cons associated with knowledge management systems.
Vendors that provide knowledge management solutions or a knowledgebase as part of a CRM-related offering include: KANA (purchased Broadbase), Ask Jeeves, RightNow, ServiceWare, and Primus.
| Pros | Cons |
|---|---|
| Available 24 hour, 7 days/week, 365 days/year | Possible inaccuracies/errors in response(s) to customer queries |
| Fast response to customer queries | An organization may have a limited number of customer contacts |
| Flexible based on sophistication of user | Tends to require serious process reengineering |
| Very scalable |
Companies that are implementing e-service aspects of CRM realize that the knowledge base should be accessible via multiple communication channels (e.g., Web chat, e-mail, phone, fax, mail). One of the key benefits of a centralized knowledge base is the ability to hold a single, integrated dialog with a customer regardless of their preferred communication channel. If implemented correctly, a knowledge base enables every CCC agent (or customer) to be as up-to-date and informed as the best agent because the knowledge is automatically available to any agent that uses the system.
There are a growing number of companies that are utilizing knowledge management tools. For example, Nike has a search engine that allows customers to easily search for comprehensive product/service information, while helping Nike to cut internal costs associated with live agents responding to basic phone and e-mail inquiries. In another example, Eddie Bauer has integrated a knowledge base into its CCC that provides users with self-service options including a library search of frequently asked questions (including natural language query) and interactive chat.
Cisco Systems uses Servicesoft technology for its Cisco Connection Online service (CCO), a global support organization that integrates with Cisco's global call center. A very large percentage of Cisco customers' self-service inquiries are resolved using the CCO.