January 19, 2001, 12:00 AM

Poor Customer Service Will Cost Online Retailers Billions

Don Davis

Editor in Chief

According to (www.datamonitor.com) Datamonitor, a New York City-based research company, businesses lost $1.6 billion online last year by failing to Web-enable their customer service operations. This year, Datamonitor reports that number could double to $3.2 billion by Christmas.

The company's research also indicates that the key to growing e-commerce profits is to maintain customer loyalty by offering live online customer service representatives. However, only 8% of the 69,500 call centers in the U.S. are currently Web-enabled, Datamonitor says. In addition, the company's research notes that less than 1% of all e-commerce Web sites currently offer live customer assistance and that 10% of abandoned shopping carts are salvageable if better customer service was provided.

Datamonitor projects that the online customer support market will grow from $150 million in 1998 to $2 billion by 2003. To date, the company reports that 70% of the 200 vendors now offering online customer service are startups.

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