Customer Service Will Make or Break Ecommerce Sites

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Author John Towler, Ph.D.
Date Published April 12, 2000
Original Publication ZDNet AnchorDesk

The importance of good customer service in today's businesses

If you or your company has anything to do with ecommerce, you don't have to read this. Unless you want to be in business this time next year.

Because now that ecommerce sites have mastered the technology of providing goods and services online, the smart ones are turning to customer-service issues. They understand they have to treat customers right -- or those customers will go away and never come back.

What's the right way to do customer service over the Internet? Many solutions are emerging. And it may be real live human beings who rescue customer-service-challenged ecommerce sites. Let’s look at the problem from both the customer and e-business perspective -- and at solutions that satisfy both.

OLD PROBLEM
I’ve told you before how important it will be for ecommerce sites to shift from a customer-acquisition model to a customer-retention focus. Click for more. That may sound simple. But it won’t be, as these recent stats from Boston Consulting Group demonstrate:

• 4 out of 5 online purchasers have experienced one failed purchase
• 28% of all online purchases fail
• 25% of those frustrated in an online purchase say they won’t shop online again (ouch!) -- and 23% won’t buy from that particular site anymore

Now consider the flip side: Market research firm Datamonitor says close to 8% of "abandons" -- sales lost due to customer frustration with a site -- can be salvaged by Web-enabling call centers. That calculates to $9 billion in 2002. Click for more.

"Customer service will make or break ecommerce companies, especially in high-touch categories such as apparel, and researched categories like electronics," Forrester Research analyst Evie Dykema told Revolution magazine. Click for more.

What we’ll see is a return to business basics, where the human touch combines with enabling technologies.

NEW SOLUTIONS
An emerging class of technology called Web-based customer interaction (WCI) makes it possible for customers to get their problems solved online, in real time. According to our research partner Cahners In-Stat Group, companies are clamoring for WCI products. So much so that the market for WCI technology is expected to reach $1.8 billion by 2004. Click for more.

Various pieces of WCI are evident on ecommerce sites today. Each has limitations:

• Email is a low-cost solution for companies, but often too slow to satisfy customers
• Live text chat is efficient, but can be labor-intensive done right and too impersonal done wrong
• Telephone call-back provides the human touch many customers want, but is most effective in homes with dual phone lines -- and costly to companies either way

Most agree a combination of these services works best today. In the sidebar I’ve linked information about software and service packages that help sites handle customer-service requests.

But many believe the killer customer service app of the future will be real-time voice interaction over the Internet -- or VoIP. Click for more. In fact, many companies have tested it and are biding time until the mass market has the bandwidth and multimedia hardware capability to make it viable.

John Towler is a Psychologist and the founder of Creative Organizational Design. Please send comments about this article to jtowler@creativeorgdesign.com. For more information, please contact us.

Re-printable with permission.