September 28, 2007, 12:00 AM

SPONSORED SUPPLEMENT: The Increasing Value of Customer Service

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Further, outsourcing customer service makes sense if the retailer has never managed a customer service organization and if it has an aggressive strategy to grow the business. "Outsourcing is a critical aspect of moving a retailer to an online presence because customer contacts and call centers are typically not core competencies of retailers," says GSI`s Wuesthoff. "Outsourcing eliminates a huge burden or distraction and enables the retailer to focus all its energies on its core growth strategies and capabilities."

The best outsourcing relationships are those in which the retailer and the outsourcing provider have complementary high touch, customer-centric cultures and beliefs, and where each works together in partnership to grow the e-retailer`s business, he adds.

Crafting the strategy

Only after retailers have settled on their budget and staffing needs can they begin to craft a service strategy. Shopper navigation paths, time spent viewing a page, and the number of visits to the site before making a purchase are critical information in setting a service strategy. "The aim of the service strategy is to look for clues about customer behavior so it can be determined how and when to interact with them," says LivePerson`s Kohn.

Proactive interaction at the right time can increase conversion rates between 20% and 25% on average, according to Kohn. "Early in the sales cycle when shoppers are researching a product, live chat tends to work well, where a live call works better when the shopper is deeper in the sales cycle," he says.

When creating a service strategy, retailers need to set and test business rules for how and when to interact with the customer. "The rules have to be tested, otherwise retailers won`t know the right parameters for a customer interaction," adds Kohn. "It is also important that agents see the paths the customer has traveled within the site, how they came to the site, and where the customer is at when the interaction takes place. Without this information, the service agent has to spend time getting up to speed on the problem or the product question. There should be no delay in addressing the issue on the agent`s end."

Central to any customer service strategy is ensuring quality. While there are many ways to achieve this goal, one method that is often overlooked is a no-questions asked returns policy that provides a generous window in which to make the return. Once a staple of catalog retailers, the practice has taken a back seat on the Internet in the name of cost consciousness.

Making shoppers comfortable

"E-retailers forget that unless the customer has done business with them before, the customer associates a risk with the purchase because of the unknown," says Assurz`s Hoffman. "Offering a 100% satisfaction guarantee augments the retailer`s brand."

Retailers have the option of purchasing Assurz`s satisfaction guarantee service and offering it to shoppers at no cost or as a value-added service for purchase. Shoppers have 90 days from the date of purchase to return an item for a full refund, including shipping costs. If the customer needs a box to return the item or a shipping label, one is sent at no charge, and all returned items are picked up at the shopper`s home for no additional cost.

To expedite returns, Assurz tracks all information around the transaction, making it easier for the agent to verify the sale, especially if the customer doesn`t return the receipt. The information is supplied via a direct data feed from the retailer. Once the returned item is received, Assurz notifies the customer and tells the customer the date the refund check will be mailed. The company recently extended its service to the TheNerds.net, a North Miami Beach, Fla.-based retailer of computers, parts and accessories. Assurz manages the entire process for merchants, from shipping and handling, to eventual re-distribution back to the retailer.

Removing the pain

"We give shoppers time to figure out if they are really satisfied with the item and take the pain out of the returns process," says Hoffman. "It`s a white-glove, concierge approach to customer service that serves as a marketing program that has been forgotten by e-retailers."

Such guarantees can engender customer loyalty which is the goal of any service strategy. "A truly loyal customer will be a repeat customer, will recommend the retailer to friends, and will be resistant to competitive offers," says Wuesthoff. "A quality customer phone interaction can produce a higher order value. We have examples of average order values that are as much as 30% higher than orders placed by non-assisted customers on a web site. In contrast, providing poor service has a deleterious effect on sales due to lost customers."

That negative effect on sales usually comes by word-of-mouth, which on the Internet can quickly spread through blogs and communal web sites that influence consumer opinions. "Even if the dissatisfied customer is a one-time shopper, word of their dissatisfaction can spread quickly and that can make that interaction pretty expensive in terms of lost future revenue," says Centris Information`s Maddox.

One way retailers create dissatisfaction with their customer service is being too proactive. Repeatedly offering help to a customer who does not want it or pushing product recommendations based on page views and navigation paths can annoy shoppers and drive them from the site. In walking this fine line, retailers are better off starting a proactive service interaction by following a few basic rules.

"If someone gets to checkout and abandons the cart, then it makes sense to proactively offer live chat before they leave the site in an attempt to save the sale," says 24-7 INtouch`s Fettes. "It also makes sense to be proactive with chat and other communications channels if the shopper is toggling between two items for several minutes. The aim is to provide information that can help them make a purchasing decision."

The other rule to follow is once an offer to contact a service agent is declined to back off and let the shopper initiate contact if and when she feels a need. "It is like the in-store sales representative that asks the customer if they need help, but does not linger if the customer says no," adds Fettes.

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