What do you do for your customers that costs you money? If you can get them to do it themselves, the first-year gains can be significant.

Niagara Mohawk Power provides electricity to more than 1.5 million in upstate New York. Pam Ingersoll is Niagara Mohawk's director of Digital Marketing and she knows her goals: "I have to do a specific number of online meter readings in 2 months to claim success. We know how much it saves us every time we don't have to make a house call, and we targeted a 20 percent growth rate in savings and did the math. My target is very clear."

At BellSouth, the issue is billing suppressions. Every customer they can get to view their bill online instead of mailing it to them is a monetary win for the company. Getting that up and running might have been the cause of more than one Maalox Moment, but they had a brainstorm that created a perfect testing ground.

Elyse Hammett, manager of Internal Communications, described it to me this way: "We realized that one of the greatest groups that we could immediately impact with this bill suppression campaign that we are currently running was our own employees. We have 100,000 BellSouth employees, so we created a campaign that we sent out to them to say, 'We need you to suppress your bill.' And we offered them a $5 gift certificate to do that through our BellSouth store for buying things with the BellSouth logo on [them] that they can use personally. The impact of 100,000 employees suppressing their bill and then getting that bill to their email address here at work or at home has saved the company hundreds of thousands of dollars."

At one major airline, they started out just measuring the ticket sales. But then they realized there were savings along with the revenues. Their e-commerce development manager told me, "We don't end up creating a [travel] booking on the site every visit, but the planning features still alleviate call volume and call time spent. We look at all those things with the business unit in mind, and then we come up with some collective measurements. That's especially important with frequent flier award travel because, at the end of the day, award travel is basically free."

"We have three broad levels we look at—migration of communication activities, migration of distribution activities, and migration of service activities—with goals around each of those. Distribution is kind of product delivery or the purchase of an airline ticket. So when we look at migration of distribution activities, that would be migration of customers purchasing from offline channels to purchasing on our site. 'Service' is all the activities that support the primary delivery of our product. So it might be your ability to check on your flight arrival and departure information online."

Not everybody is swallowing the money-savings panacea without thinking. Alan Sacco is the performance manager for e-business at another utility company, First Energy (www.firstenergycorp.com). On the phone with Alan, I divulged my qualms about one of the assumptions I had made and passed along to many a convention audience. I had said that one of the best things about customers doing their own data entry is that they seldom misspell their names. In 1994, that sounded pretty good. Unfortunately, it's not true. People do misspell their names.

Sacco jumped on that comment because he's lived with it: "You are then forced to remedy those situations, and if it ends up costing you more than it did the original way; then you gain nothing. In fact, you've lost something. So, you know, it's nice that I've got 100 percent of my customers doing bill paying online except for 15 percent of them make errors. Maybe it was better to do it the original way. Nothing is a slam-dunk."

But there is a wealth of wonderful numbers out there. Hewlett-Packard emails product support alerts instead of using the mail or waiting by the phone and claims the number of calls to the call center have dropped to the tune of $150,000 per month.

IBM claims to have eliminated 99 million calls to help desks by providing online support, which they chalk up as $2 billion in savings.

Just by automating the process of setting up a new password and sending it out 75 percent of the time, SunTrust, the nation's ninth largest commercial banking association, expects to save $2 million every year.

In 1999 Polaroid calculated that support for its digital cameras ran to $4.50 per unit. In 2000, after putting up a self-service Web site their costs went down to $1.50 per camera. Polaroid initially figured they saved $3.9 million in support costs by having this site available.

But there were those at Polaroid who weren't pleased with the math. Yes, they had 700,000 visitor sessions and only about 5 percent sent in email questions after each session. But general manager Yale Cohen wasn't going for it. Instead, Polaroid ran customer surveys and determined that only about half of the sessions were successful and estimated that 250,000 sessions precluded the need for a phone call. Since they peg their customer support calls at $8, that still represents $2 million in savings. Not bad.

Cost Comparison

Remember my comment about how much more it costs to get a new customer than to sell something to a current customer? Remember how the multiple varied from three times to twenty times? The variance in the difference between providing customer service offline and online is almost as dramatic.

You shouldn't spend all your time thinking about making money, but you also shouldn't spend all your time thinking about saving money. There's also the problem of potentially missing out on future income.

Opportunity Cost

First Energy's Alan Sacco put it well: "When you design an effective portal for customers to allow them to pay online, it gives you the ability to track a lot of things. Number one, it gives you return email capabilities. You can respond to most customers who go to your Web site and pay electronically, and solicit them for additional services. You can provide them a portal environment where they can monitor their usage, you can read their meter, and perhaps remotely install software. There are just a thousand and one doors it opens up."

If you avoid those opportunities, you're leaving money on the table. If online bill presentment and online bill payment don't offer up an immediate return on investment, they might open some of those doors Alan alluded to.