Does the Web Reduce Customer Service Cost? Empirical Evidence from a Call Center

Firms are investing millions to deploy Web‐based self‐services at their call centers. The rationale for such investment is that the firm's cost of interacting with its customers through the Web‐based channel is an order of magnitude cheaper than the assisted channels such as telephony. We conduct a field study at the call center of a prominent U.S. health insurance firm to examine this cost‐saving rationale of the Web‐based self‐service channel. On the one hand, the Web channel may substitute for the telephony channel in some cases. On the other hand, the Web also exposes customers to a vast amount of information about their health policy, claims, and coverage; this information can create uncertainty leading to customers seeking more information and hence making more telephone calls. We designed a quasi‐natural experiment in our field setting and used difference‐in‐difference specifications to show that the Web‐based self‐service usage leads to a 14% increase in telephone calls. We conduct several robustness checks to show that our specifications are robust to any potential selection of customers in the Web‐based self‐service usage. We further find that the impact of Web portal usage is moderated by the Web portal characteristics. We find that if the information is unambiguous and easily retrievable on the Web, calls for such information decline by 29%. However, for ambiguous information, the calls increase substantially. Our research provides insights into the challenges and opportunities of self‐service technologies design.