Squandering a Golden Opportunity

E-commerce consultants are loudly proclaiming the importance of customer service, while customers themselves are demonstrating — via their wallets — that they simply will not accept bad service. And yet, e-tailer reaction has been slow.

A new study that places an updated monetary figure on the losses caused by poor customer service reveals that the numbers are big — scary big. Is customer service the lightning bolt that will change the way retailers do business online?

Don’t bet on it. Unfortunately, e-tailers may be on the verge of squandering a golden opportunity as faulty perceptions conspire to keep truly great online customer service in the dream-only phase.


The biggest non-issue is money. Yes, new technology allows much more responsive customer service over the Internet at lower cost, but even the best applications fall short of the response that a caring live person can give.

The new software works best when used as a tool by skilled customer service professionals. For many dot-coms, that means hiring more people and either setting up call centers or farming that task out to a third party. Either proposition is a big ticket item, and right now, big ticket expenditures are not what e-commerce companies and their nail-biting investors want to undertake.

Which brings us to the second non-issue: timing. Some e-tailers are hanging back from making big customer service investments because the ground beneath them is a little too shaky.

The study from Datamonitor should help put the equation into balance. If enough money is not put placed on the customer service side of the scale — and soon — increasingly heavy sales losses threaten to weigh down the whole e-commerce enterprise.

Datamonitor said $6.1 billion (US$) was lost last year and that losses of up to $173 billion are possible in the not-too-distant future.

Abandon Ship

Nothing — I repeat, nothing — is more frustrating than being stuck in cyber-limbo while trying to make a purchase. If they are anything like me, other would-be customers must marvel every time they are ready to buy, credit card resting on keyboard — but due to busy servers or a bad link to the checkout counter, the e-tailer won’t take their money. It boggles the mind.

In an era when scores of online retailers are struggling to stay afloat until the next big holiday season, the Datamonitor findings suggest that individual firms can potentially raise their sales by 35 percent, simply by providing better customer service.

No small wonder, then, that the customer relationship management (CRM) market for software is already gigantic and growing fast. But in the search for more “cost-effective” (meaning less-expensive) ways to provide this service, e-tailers miss the point. Spending for improvements is nowhere near as costly as not serving customers right.

It is going to take a major attitude shift to get e-commerce customer service to the level it needs to reach in order to make people happy. And that could mean that individual companies simply cannot do it alone. It may be that in five years — or less, who knows? — the Internet will provide all the tools and technology necessary to answer customers’ questions. But what about the interim?

Hello Out There

Some people simply will not go to the FAQ section or spend time hunting around for the online help section of a site. Remember, neophyte shoppers are just as important to the bottom line as experienced Web hands who know exactly where to go when trouble strikes.

Those new shoppers, in fact, are essential to drive sustained e-commerce growth. And the demographics of online shoppers are changing all the time — with the overall population aging and older people venturing online in greater numbers.

Customers who are experienced shoppers in the brick-and-mortar world know what they want, and they are assertive about demanding it. When those customers make the move to shopping online — regardless of their level of Internet-savvy — they want their questions answered. And they want their answers live and right now. They deserve no less. After all, they are spending their money — or at least trying to.

Poor customer service is a pitfall that all e-tailers can fall into — from the household-name giants to the moms-and-pops. More to the point, customer service is a problem that can pull the rug out from under e-commerce as a whole.

While the most recent study does not address the issue directly, it is safe to assume that a significant percentage of customers subjected to the poor service of a single firm may consequently reject the whole idea of buying online. They may flee to the nearest department store or the telephone order department of a catalog company, where they can be assured of finding a real person (even if he or she isn’t always helpful, either).

Customer Service Mega-Center

That is why a fresh, cooperative approach to giving customers good service is critical. Since e-tailers have been slow to establish top-flight call centers on their own, maybe it is time they teamed up to create one mega-center — or a series of strategically located regional centers — to support the e-tail industry.

The cost could be shared across company lines, minimizing the investments required by individual firms. Customer service personnel could be trained to answer questions for a host of Web sites.

Specialists could support particular technology platforms, or — to avoid potential clashes among competitors — customer service staff could be assigned responsibility for getting up to speed on a group of sites selling different products, or selling similar products in different markets. Companies could buy into the service and pay as they go based on the number of calls generated by their sites.

These customer care professionals could answer e-mail live and be trained to monitor automated customer response systems, tweaking them as needed to optimize performance and reliability.

For the Greater Good

It might be strange and difficult for some companies to cross the threshold of competition and work together, but co-opetition has become the byword in many other areas of the e-business world, so why not in the critical domain of customer service?

Reluctant e-tailers need only to remind themselves of how much money is swirling into the plumbing for every day marked by indecision or half-hearted efforts. The stark news about customer service losses should be more than enough to drag e-tailers to the water, and to make them drink.

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