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Service with a Virtual Smile

By Jeanette Brown So far, Ernie Bell likes his digital clone. Bell, a jovial, bespectacled Ford employee, fields calls from mechanics servicing Ford cars. When the mechanics run into trouble working with a complex piece of diagnostic equipment, Bell talks them through the problem.

But thanks to a technology developed by San Francisco startup NativeMinds, Bell's phone has been ringing less. Ford uses NativeMinds software to create a vRep, an online version of Ernie that answers the questions most frequently asked by technicians. This lets the real Ernie spend his time solving more complex problems.

And it's a big cost-cutter for Ford. A question answered by vRep Ernie is 10 times cheaper than a call fielded by the real Ernie, according to Ford. With 45,000 technicians working in 5,400 dealerships around the U.S., that adds up to a lot of dough. According to Forrester Research, the average plea for assistance to a call center costs $33, compared to $1.17 for Web self-service. "NativeMinds has a great product that helps companies offload the expense associated with higher-level support," says Forrester Research analyst Bob Zurek.

MIDNIGHT OIL. NativeMinds was founded in 1996 by Walter Tackett, who has a PhD in computer engineering from the University of Southern California. Tackett came up with the idea for vReps while working as a consultant for Stanford University, where he was trying to get computers to talk to people through artificial intelligence. He had worked for years with computer technologies that respond to natural language but always felt that the software was too complex. So he set about creating new automation software for the Web.

Today, Tackett's company claims 17 customers, among them Oracle, Coca-Cola, American Express, and, most recently, Nissan. Ford mechanics log onto a shop-floor computer, then go to a private Web site, and ask the vRep questions as if they were talking to a flesh-and-blood person.

The software finds an answer by searching through multiple sources of company information such as Web sites, customer-contact software systems, and other databases. Ford even finds that many technicians save up questions to consult Ernie at night from their home computers. And on Apr. 16, NativeMinds released an enhanced version of its software that lets vReps suggest other topics related to the customer's initial line of questioning.

CLONE WITH AN EDGE? Other companies also offer customer-service clones. NativeMinds' biggest competitor is Ask Jeeves, an Emeryville (Calif.)-based company that sells a corporate version of its search engine that responds to questions with a list of answers or additional questions. But analysts say NativeMinds' technology has several advantages.

Unlike search engines, NativeMinds delivers a single, specific answer. That saves users from sifting through a bunch of irrelevant information. A client's ability to select its own graphic character as a vRep -- a la Ford's Ernie -- is an important advantage for NativeMinds, says Chris Martins, analyst at market research firm Aberdeen Group. "It gives customers a way of providing consistent representation of a company image across multiple channels," Martins notes.

Another NativeMinds customer, Deutsche Telecom subsidiary One 2 One, a mobile-phone service provider in England, uses this feature to its advantage. One 2 One built a vRep called Yasmine, based on a British soap-opera star, to appeal to their twentysomething customer base. One 2 One sticks Yasmine on billboards and television advertisements as well. She holds more than 11,000 conversations per month, which saved One 2 One $110,000 in support costs over a two-month period. "Yasmine will be at the center of the way we do things over the Internet," says Ella Oates, One 2 One new-media manager.

GETTING IT RIGHT. But the most important feature is whether NativeMinds delivers the correct answer. And on this point analysts and customers say it has the edge over rivals like Ask Jeeves. "They have enough experience and enough traction with some very large players to suggest that they're providing the right level of accuracy," says Forrester's Zurek. Vic Nagy, Ford's hotline operation manager, agrees: "We decided on the NativeMinds product because it really gets you to your answer on the first try."

NativeMinds execs say they're in good financial shape. Despite the market downturn, Tackett says cash isn't a problem for the 90-employee company. In July, 2000, it closed a round of venture funding led by TA Associates, Oracle Ventures, and CIBC for $27 million, bringing its total funding to date to $33 million. He expects the company to be profitable by early next year.

Forrester analyst Zurek says its odds of success are good: "When the flow of money into startups is based on whether they're gaining traction, have good enterprise customers, and are continuing to differentiate themselves, NativeMinds, with all three, stands a very good chance of being just fine."

Back at Ford, virtual Ernie fields the most commonly asked 700 or so questions. He's the spitting image of his namesake. vRep Ernie even smiles and frowns when answering queries. "Certainly a few more people know me than in the past," says the real Bell. vRep Ernie gets his answers from a database. Ford, working with NativeMinds employees, created a list of questions and answers that it entered into the database.

AIDE OR RIVAL? And Ernie gets smarter over time. Ford employees can enter new questions and answers into the software if a supervisor deems it necessary. And if a question goes beyond what Ernie "knows," he can push relevant pages of the service manual to technicians. If a technician is still not happy, Ernie can bring in a live representative.

Is the real Bell worried about being replaced by a vRep? "Ernie does provide a real interaction, and he eliminates a lot of the frustration that can come with using the Web," he notes of his clone. But Bell says there'll always be calls that require the human touch. He better hope that Ernie doesn't learn too much. Brown covers tech companies for BusinessWeek in New York

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