September 28, 2007, 12:00 AM

SPONSORED SUPPLEMENT: The Increasing Value of Customer Service

Just as e-retailing has changed consumers` shopping habits, it has altered their expectations of customer service. E-retailers that skimp on service risk losing more than a sale, they can damage the credibility of their brand with shoppers.

There`s no question that the Internet has changed consumer expectations of the shopping experience by allowing them to shop when they want, from wherever they want. Along with the ability to shop on their own terms, shoppers` expectations for customer service have risen dramatically. It is no longer enough for retailers to post an 800 number on their home page; instead they must offer a variety of round-the-clock communications options, timely responses to customer inquiries, and most importantly, proactive service.

"Timing and context are key to quality customer service, and retailers must know when to step in without being intrusive, what communications options to provide," says Kevin Kohn, executive vice president of marketing for LivePerson Inc., provider of live chat and other customer service applications. "Good things happen when the customer is proactively engaged."

Actively engaging the shopper not only builds a positive opinion of the retailer`s business by showing the retailer will go the extra mile to create a satisfactory shopping experience, but it also saves the shopper time. The latter is critical because convenience is a major reason many consumers shop online.

Time is valuable

"A shopper`s time is valuable and when they have a question or are debating whether to buy an item, they want to be helped so they can get on with their shopping," says Jamie Maddox, CEO of Centris Information Services Inc., provider of call center services. "Retailers tend to forget that in the online environment."

Prompt and efficient handling of customer service issues is critical, especially when processing a return. "Shoppers don`t want to feel like they have to explain why they are returning an item, they want to state their reason and get through the process as quickly as possible," says Steve Hoffman, CEO of Assurz Inc., a provider of satisfaction guarantee services. "The Internet has flattened out price advantages, so service is a differentiator that delivers more value around the sale. An efficient service interaction shows a higher level of interest and creates a satisfying shopping experience, even if the customer is returning the item."

Unlike the store where sales representatives on the floor are the primary point of contact for service, e-retailing requires multiple points of contact. These touch points include live chat, e-mail, FAQs, and 800 numbers. Knowing which touch point to offer and emphasize depends largely on the clientele of the retailer.

"Shoppers 18-25 are big on live chat, because that is a common communications tool for them and older demographics are more inclined to want an 800 number," says Greg Fettes, president and CEO of 24-7 INtouch, provider of call center services. "Retailers need to know the communications preferences of their clientele and provide those options so they can interact with customers on multiple levels."

Understanding the service preferences of customers is an extension of consumers` desire for a more personalized online shopping experience. "Shoppers` expectations are higher with regard to the availability of self-service capabilities and automated communication," says Robert Wuesthoff, executive vice president, global operations for GSI Commerce Inc., which provides end-to-end e-commerce solutions, including customer service. "The communications and self-service capabilities shoppers have come to expect include an online portal for order status and order management, robust e-mail communications around order events and the availability of information online."

Placement and availability of service options throughout the site depend on myriad factors, such as the retailer`s budget, number of service agents and the retailer`s service strategy. While budgetary constraints are a legitimate consideration when creating a service strategy, too often retailers use them as an excuse to limit their service channels. "Shoppers will resent having limited communications channels for service," says Maddox. "All retailers face budgetary constraints, but limiting the available service options prevents retailers from delivering on their promise of a satisfying shopping experience and raises questions in the shopper`s mind about the quality of the retailer`s brand."

Use space efficiently

When offering service options, retailers must avoid cluttering up the home and product pages with them. One way to make efficient use of the space on a web page is to create a customer service button that when clicked opens a menu of the communications options. "This makes it easy for customers to choose the service path they want to go down, without taking up valuable real estate on the page," says Maddox.

Providing shoppers with a choice in how they interact with the retailer is essential to creating a satisfactory service experience. "Customers want service options," says Wuesthoff. "Everything that realistically can be automated should be--when it makes good business sense--thereby giving the customer the power of choice."

Staffing levels are another consideration when choosing which customer service options to provide. A common mistake for retailers is to expect their service agents to be able to handle chat, calls and e-mail indiscriminately. This is usually a mistake as an agent that shines in handling phone calls may fall short when typing a response.

"There are big differences in the skills needed to handle a matter on the phone and through live chat or e-mail," Fettes says. "Asking a phone operator to handle a chat or e-mail service request can result in abandonment rates in those service channels of up to 50%."

Matching skills

To make sure it matches the agent`s skills to the appropriate communications medium, 24-7 INtouch, which provides customer service on an outsourced basis for retailers handling as few as 500 customer contacts per month to as many as 50,000, submits each agent to a skills test. The practice has resulted in a less than 5% abandonment rate for live chat contacts.

In addition to matching service agents` skills to the appropriate communications medium, retailers must consider the cost of hiring a large staff. When retailers reach the point of needing 10 or more full-time service agents, the case can be made for outsourcing. "The economics of outsourcing begin to make sense at that point and outsourcing ensures that all points of customer service interaction are properly staffed," says Maddox.

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