Customer Service Failures Could Doom Online Merchants

According to a new study by research firm Jupiter Communications, Inc., more consumers than ever plan to shop online this holiday season, but poor customer service could turn those eager spenders off.

Web sites have been slow to implement creative, effective new ways to address customer concerns, Jupiter says, noting that e-mail addresses are no longer enough. Merchants “must aggressively implement a multiple channel, automated customer service strategy.”

Many sites, however, do not even offer an e-mail address to which shoppers can direct inquiries. 46 percent of the top Web sites in the content, consumer brands, travel, retail and financial services categories took five or more days to respond to a request, never responded or did not post an e-mail address on the site.

Among shopping sites, more than 50 percent surveyed responded to customer service inquiries within a day. However, 40 percent did not, up from 28 percent in the third quarter of 1998.

In the travel sector, 40 percent responded in one to two days, while 48 percent did not respond at all, up from 36 percent last year.

Growing Problem

The problem is getting worse, Jupiter says, noting that the failure rate is up from 38 percent at the same time last year. In fact, the researcher says, companies reacted with concern last year when Jupiter reported the 38 percent failure rate, pledging to focus more attention and resources on customer service as a key priority for 1999.

Companies also said that they planned to install new-and-improved customer service systems such as automated assistance programs. A year later, however, “Many Web ventures are ignoring the opportunity to communicate with existing and potential customers, discouraging brand loyalty, and opting out of a user-initiated, one-to-one relationship by delaying, eliminating, or not offering responses to e-mail,” Jupiter said.

The problem starts with an inability to handle high volumes of site visitors and buyers. While Jupiter estimates that many of the more popular sites average 58,000 transactions per day, their disorganization behind the scenes puts a strain on the retailer’s customer service operations.

The concept is simple: The more customers a merchant has, the higher the number of customer complaints, questions and problems that will be need to be addressed. Without a good fulfillment system to handle the high volume of online transactions, customer service will get the brunt of the customers’ dissatisfaction, Jupiter noted.

Setting Themselves Apart

Jupiter also argues that online merchants should look at good customer service as a tool to differentiate themselves from others who sell the same products. Jupiter advocates a “multichannel” automated customer service strategy, which only 37 percent of Web sites currently employ.

Possibilities include live chat rooms, toll-free phone lines for those needing to hear a reassuring voice, and e-mail for simple, easy to answer questions that do not need instant attention.

In addition, the Frequently Asked Questions (FAQ) list is under-utilized by many sites, Jupiter noted.

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