Online service of customers getting worse

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Merchants are sprucing up their Web sites as the holiday shopping season barrels ahead. Yet their efforts may be doomed because many sites have a critical deficiency: customer service.

As a matter of fact, e-tailers are worse off this year than they were last year when it comes to customer service, according to a recently released report from Internet consultancy Jupiter Communications. The report, which tracked how fast 125 major e-commerce sites responded to customers' e-mail inquiries during the third quarter, found 46% took five days or more, never responded or didn't post an e-mail address on their Web site. This is up significantly from a failure rate of 38% in third quarter of '98.

SERVICE 'A NECESSITY'

"For the most part, things are getting worse," said Cormac Foster, analyst in site operations strategies at Jupiter. Customer service is "not an extra. It's not a bonus. It's a necessity.

"If you get incredibly popular and swamped with business, you've got to expect to spend a significant amount of money on customer service," Mr. Foster added.

Brick-and-mortar retailers, especially those with top-notch on-land customer service, are feeling the pressure to translate that same service to online operations. For many, it begins with a site that can be downloaded rapidly and navigated easily. Sites such as Macy's and The Gap offer customers hints on ways to round out outfits with accessories from socks to shirts and sweaters or jewelry.

Even Nordstrom, which set the standard for customer service, offers shoppers an opportunity to leave e-mail messages with questions and comments. Another upscale retailer, Neiman Marcus, has gone one step further. It is offering cyber shoppers a live assistance program via live chat. Shoppers clicking onto the virtual assistant are shown a list of names, allowing them to pick one.

While the assistant idea may be helpful in generally suggesting gifts, its weakness comes out when everyday questions arise. For example, a customer looking for special occasion dresses for a teen was told none was to be found on the Neiman Marcus site. The assistant did not know whether the store near the customer's home carried such dresses. Her advice: Call the store, which the customer could have done without spending nearly 30 minutes online.

Lands' End, meanwhile, uses a live assistant who helps users navigate the site. Customers with two phone lines, one for a modem and one to talk on the phone, can see products the Lands' End personal shopper sends to their screen. An in-house-developed ad campaign backs Lands' End program.

Jupiter recommends marketers increase channels to fit their needs, even if it means outsourcing services during the busy holidays.

"If your main asset is your brand, you don't want to damage that" by going live with a site lacking quality customer service, Mr. Foster said, even "if that means skipping the holiday season."

Customer care is big business. In 1998, companies spent $25 billion worldwide on customer care, according to International Data Corp.

Several customer-service support companies are jumping into the fray. Sky Alland, an established call-center operator, this month released iSKY, real-time customer-care services that include a call center, online chat capabilities, telephone callbacks and fax support.

So far iSky has six clients that include Sharp Electronics and Suzuki Motor Corp. Rich Hebert, chairman-CEO of Sky Alland, said the service is totally customizable, depending on clients' needs.

RESPONSE TIME OPTIONS

To alleviate the problem of responding to customers' e-mails, Mr. Hebert said Sky Alland recommends giving consumers the option of having e-mails responded to in one hour, two hours, six hours, 12 hours or 24 hours.

"In the absence of an expectation," he said, people expect an immediate response. "Believe it or not, not every customer chooses the fastest" reply. "Our opinion is that you have to go beyond e-mail; it's not customer-accommodating and instantaneous."

Other companies are trying to fill the service void from the consumer's perspective. For instance, start-up Feedback Direct touts itself as a customer service portal. The site, which officially launches in December, offers the Orange Pages, a listing of customer-service contact information for several thousand sites in 10 different categories. The site also has an e-mail inquiry form, designed to get questions answered faster by gathering all relevant information at once; customer service tips; and an in box, through which users can manage inquiries to, comments about and complaints about sites.

The site plans to generate revenue by selling enhanced listings in its Orange Pages, offering a service to help businesses understand what customers need and allow follow-ups in the form of permission e-mail marketing.

It's talking to clients in categories including consumer electronics, home appliances and computer software and hardware.

"Everything is done over the Web," said Thatcher Wine, CEO of Feedback Direct. Mr. Wine said answering e-mails with automated responses can cost as little as 25 cents an e-mail vs. a call center, which costs about $1 a minute for call support.

Feedback Direct plans an estimated $2 million ad campaign next year, including print, outdoor, radio and possibly online. Advertising is in-house now, but Mr. Wine said Feedback Direct is considering an agency search after the new year.

The importance of customer service "is not to be underestimated," said Lee Eisenberg, exec VP-creative at Lands' End. "There is now an emerging awareness that shopping online can be enhanced if there is the customer service [that] people have come to expect."

Copyright November 1999, Crain Communications Inc.

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