Help!
So -- just because they`re shopping online, customers don`t want to have their hands held or talk to customer service reps?
By Peter Lucas
More than three years after e-retailers specializing in commodity items, such as Amazon.com, floated the concept of customer service through FAQs, email and other self-help devices, the self-help strategy is taking on water in a big way. About 67% of all online shoppers abandon their cart before checkout, according to Cambridge, Mass.-based Forrester Research.
Such an alarmingly high abandonment rate translates into a lot of lost revenue for e-retailers, especially those selling apparel, cameras and investments, big-ticket items and services that in the physical world typically require some interaction between a sales representative and the consumer.
To reverse this trend, a growing number of e-retailers are deploying live customer support applications—instant messaging, web chat and voice over Internet—that instantly connect shoppers in need of assistance to a live agent through their personal computer. These applications go beyond toll-free call centers, which require consumers with one phone line shopping the web—and it’s probably most—to disconnect from the Internet to place the call. Such a plan also does not guarantee callers immediate access to a live agent during heavy traffic periods.
The extent to which live support can reduce shopping cart abandonment rates can be difficult to measure, since many Internet retailers are reluctant to discuss abandonment rates. But they acknowledge that live support is important because competition is only a click away. “When you have a problem shopping online, you want a live person for help,” says Elizabeth Herrell, a senior industry analyst for Cambridge, Mass.-based Giga Information Group. “There are some consumers that refuse to place an online order without first contacting a live agent.”
FaceTime, a vendor in this market, cites a survey that states 63% of online customers will not buy goods or services over the web unless they have access to a live person.
For e-retailers, the aim of live support technology is to build a stronger relationship with consumers by providing a higher level of service that will persuade them to buy merchandise and return for future purchases.
“There is a large segment that wants personal attention online, because it reflects the value of the individual customer,” explains Christopher Hoffman, director of business solutions services research for Framingham, Mass.-based IDC. “Establishing communication lines that put the customer in direct contact with service representatives over the web can help defeat the urge to abandon a shopping cart because customers have less opportunity to talk themselves out of making the purchase.”
Reducing abandonment rates is key for e-retailers facing stiffer competition and mounting pressure from investors to turn a profit. In response to this, most live support vendors are attacking the market from several angles.
High profile players offering multiple live support applications include San Francisco-based Kana Communications Inc.; Foster City Calif.-based Face Time Communications; Novato, Calif-based Brightware, Inc.; La Jolla, Calif.-based eHelp Corp.; Sunnyvale, Calif.-based eGain Communications and others (see table, page 44).
Of the applications available, web chat is the most popular among e-retailers because it is similar to email, the form of communication with which online shoppers are most familiar and comfortable. Web chat allows a consumer to type real-time messages back and forth with a service agent as though they are having a conversation.
“People are emailing more than ever and chat is like email,” says Mary Mulcahy, director of customer care for San Francisco-based RedEnvelope, an online gift boutique. “It’s interactive, convenient and easy to learn.”
RedEnvelope uses a chat application from FaceTime that has been recently upgraded to measure abandonment rates and talk time with customers. The program tracks the URL of pages where customers request help, the types of questions asked and the time of day help requests are received. Such data encourage e-retailers to redesign problem pages to be more customer-friendly, improve product descriptions and schedule enough staff to cover peak periods. “Having a database that can spot trends can help e-retailers determine when and how it is best to offer customers help,” says Robin Selden, vice president and general manager of the core technology group for FaceTime, which has more than 250 clients.
The local handy man
One solution is to use web chat to answer a customer’s questions not necessarily related to the product. San Francisco-based CornerHardware.com makes building and home improvement experts available on a 24/7 basis through its web chat application as a way to build long-term customer relationships.
The site, which launched last February, staffs two or three experts per shift to field customer inquiries. Service agents that answer shipping and other general questions are available to handle overflow and search for answers to building-related questions in the site’s library. About two-thirds of all customer inquiries to CornerHardware, which outsources its customer service to Boston-based eSupport, come through web chat.
“We want to build long-term relationships, and our repeat visitor ratio is higher than projected,” says CornerHardware Chief Information Officer Ken Hite, who declines to reveal the ratio or volume of inquiries CornerHardware handled. “Repeat shoppers are not always price sensitive. Web chat is an important tool on which to build our customer service model.”
Using web chat to provide superior customer service requires preventing agents from being overwhelmed by inquiries. RedEnvelope limits to four the number of web chats individual service agents can have at one time. “The system allows reps to take up to eight chats, but it is extremely difficult to move among that many conversations and scan windows for answers to questions that will vary widely,” says Mulcahy. “Four chats can be handled efficiently.”
They don’t know retail
Just as the choice of web chat vendors varies, so does pricing. Hosted services are available from as little $250 to $600 a month per agent to enterprise systems running $100,000 and more that include web chat, email management and call center functionality.
The decision to go with an in-house or outsourced live support system is based on the cost of the system and the retailer’s core competencies. The cost factor is based on the price of the technology, salaries of the support agents and office space to house the support center, according to Hite. For start-ups, this means spreading a large fixed cost over small call volume, not an economical solution. “The ASP model is the most economical way for small Internet retailers to get live support,” concurs Giga’s Herrell.
At the same time, customer support is typically not a core competency for Internet retailers. Most dot-coms are started by technology experts with little expertise in merchandising and customer service. “A lot of Internet retailers hire IT people to get their site operational, but they do not necessarily understand retail IT,” explains Peter Keller, business development consultant for Brisbane, Australia-based Cahoots, which offers a web chat network that enables shoppers to communicate with other shoppers at a specific site.
Most web chat programs enable customers to email themselves a transcript of the session, a good refresher for lengthy answers to complex questions.
Customer surveys about the visitor’s experience while at the site can also be attached at the end of a session to measure customer service. Wilmington, Del.-based Wingspan Investment Services, an online brokerage firm, has done this since introducing web chat in last spring. About half of Wingspan’s customer inquires come through web chat.
Wingspan also uses instant messaging, a speedier email, to message customers with pagers and web-enabled cell phones. The simple text messages are notices of news or events pertinent to the recipient’s account. “This is a stepping stone to other technologies such as voice over Internet,” says David Hargarten, Wingspan’s vice president of product management.
As a technology, voice over Internet is starting to grab more attention. The potential is that e-retailers can create a more personal shopping experience by enabling customers to simply point and click in order to talk to a live agent through their PC. Customers need a microphone and speakers to converse through their PC—but those are standard accessories with most new home computers these days.
The target audience for voice is latecomers to online shopping used to catalog purchases over the phone. This audience craves a more human touch beyond text messaging, according to e-commerce experts. “There are a lot of customers that refuse to make a purchase without speaking to a live agent,” says Herrell. “More e-retailers are selling items that require some type of human assistance to sell and most people that have a problem or question during a purchase are more comfortable with a live voice.”
That elusive quality
The boundaries of voice over Internet appear to extend beyond PCs to wireless and web-enabled phones, which is why vendors not marketing a voice over Internet application are experimenting with one. “Voice creates a robust shopping experience,” says Jeremy Verba, president of Mountain View, Calif.-based HearMe, a live voice and Internet telephony products provider. “There are people who want instant communication from the site with which they do business.”
One offspring of live voice is voice recognition, an automated voice application onto which e-retailers can offload basic functions, such as product description, order status and purchases. “The convergence of voice with other customer applications can make it easier to buy your product,” says Robert Levitan, CEO of New York-based Flooz.com, which markets Internet-only currency. Flooz is experimenting with an automated voice application from Boca Raton, Fla.-based NetByTel (see “A pay as you go solution,” p. 45).
Despite the potential for voice over Internet as a live support application, Internet retailers feel the quality of the technology is not high enough yet to justify installation. Some Internet retailers say that transmission quality is poor, which can be a turnoff for shoppers who will abandon a site that does not meet their needs. “I have yet to hear a good voice over Internet transmission in demonstration,” says RedEnvelope’s Mulcahy. “The technology is not quite ready yet and I am not sure consumers are quite ready to embrace it.”
Other angles from which vendors are attacking the market include applications that anticipate answers to common customer questions throughout the site. The anticipated answers appear when customers click on the help icon. “Knowing the point at which customers are likely to ask questions as they drill through the web site and what is the most common question can make customer support proactive,” says Christopher Calisi, CEO of eHelp, which markets such a program. “Making sites more useable can offload volume from customer service representatives.”
Some, however, claim there is a fine line between usability and intrusiveness. Mulcahy cautions that there are times when consumers prefer to search for information and that predicting questions can be a turnoff.
Nor are e-retailers particularly high on embedding links into email responses that when clicked, connect the customer to a specific page within the sender’s site as a service application. “That’s more of a marketing application that builds on service rep’s ability to deliver repeat customers,” says CornerHardware’s Hite.
What e-retailers are interested in is live support technology that can boost long-term sales by delivering a personal touch. “People will only expect higher levels of service as e commerce matures,” says Mitch Johnson CEO of Omaha, Neb.-based E-mail Solutions, which offers instant messaging. “The more human live web site support, the more often customers will return.” •
Peter Lucas is a Chicago-based freelance business writer.
A pay as you go solution
Although not new, automated voice technology remains a promising way for e-retailers to reach consumers that are not wired. Selling this concept to Internet retailers, however, is not easy since many are skeptical of the technology’s reliability and lack the capital to build an automated call center.
Enter Boca Raton, Fla.-based NetByTel, a telephony ASP specializing in e commerce solutions. NetByTel is betting its performance pricing model will persuade e-retailers to think differently about automated voice applications. Rather than charge by call volume, NetByTel clients pay based on the percentage of successfully completed calls.
“It is an attractive value proposition to e-retailers, especially small start-ups that are not sure the service will work,” says Elizabeth Herrell, a senior industry analyst for Cambridge, Mass.-based Giga Information Group. “Automated voice can offload inquiries from live agents.”
NetByTel offers two applications, NetByTel Ordering and NetByTel Order Status. The first application processes inbound orders placed through a telephone. Callers are guided step-by-step through the order process and use their voice to command the system. Voice activated functions include product descriptions, backing-up in the order process and removing items from the shopping cart. The second application verifies order status and projected delivery date.
Both applications use speech recognition and speech synthesis technology and interface with databases running in XML, HTML and frame relay environments. Voice orders are transcribed to text on the order form. Synchronization agents search the site to provide key ordering data in real-time, such as price and product availability. Each client receives its own 800 number, which it can promote to build brand awareness.
The technology is grabbing the attention of several dot-coms. Santa Monica, Calif-based eToys is testing the system and New York-based Flooz.com is preparing to launch an automated order system. Other clients include Delray Beach, Fla.-based Office Depot, which in addition to receiving orders, uses the technology to notify customers by phone if an expected delivery will be late. Stamford, Conn.-based Priceline.com and New York-based Big Star Entertainment Inc., which operates a film content and commerce site, are also clients.
“For dot-coms without call centers our service is a way to improve customer retention and attract new customers,” says Paul Robinson, president of NetByTel. “For those with call centers, we can lower operating costs by automating mundane call center tasks.”
Both are important benefits, since most dot-coms focus their resources on keeping their web site up and running. “The technology is about making it easier to send and receive your product and that is important,” says Robert Levitan, CEO of Flooz.com. “It’s not technology for technology’s sake.” 
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