SPONSORED SUPPLEMENT: The Increasing Value of Customer Service
E-retailers that skimp on customer service risk losing more than a sale.
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.
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.
24-7 INtouch uses Nortel Networks Symposium Contact Center Servers. Web-based workstations allow agents access to the Internet so they can quickly collect important information during calls. The call center experiences uptime of more than 99.99%, the company reports. The company operates two bilingual, boutique call centers, one in Regina, Saskatchewan, Canada, the other in Winnipeg, Manitoba, Canada. Each center is capped at 200 seats to help maintain quality assurance standards.
Analytics can help retailers take a lot of the guess work out of when to proactively reach out to a customer. LivePerson will track patterns in customer movement and site behavior to identify proactive service opportunities. "Research has told us that a shopper will go to a site four times, on average, before they make a purchase," says Kohn. "If they can be engaged sooner in the research phase, the retailer can speed up the purchasing decision and distinguish themselves from their competitors as being positively proactive. That helps build trust."
Retailers should also be proactive in offering customer surveys after the purchase. Whether shoppers receive the survey via an interactive voice response unit, e-mail or through a link on the retailer`s site, surveys are an important direct-measurement approach and are required for consistent delivery of high-quality customer service.
"Surveys can measure the quality of the customer`s interaction with customer service or measure the overall level of satisfaction and loyalty with the company, brand, product or level of service," says GSI`s Wuesthoff. "Retailers can administer these surveys themselves or they can hire a third-party to do it for them."
Offering a customer survey after a service interaction is considered non-intrusive and therefore more likely to get a favorable response. 24-7 INtouch gets about a 20% acceptance rate for surveys offered at the conclusion of a customer service call and live chat session. "The best way to know what customers think about the level of service being offered and their expectations for service are through surveys," Fettes says. "Surveys are a tool for meeting customer expectations."
A positive effect
Even if the customer declines to participate in the survey, making the offer has a positive effect on how consumers perceive the retailer`s brand. "It shows the customer that the retailer cares about quality service," adds Centris Information`s Maddox.
One question to ask in a customer satisfaction survey after a proactive service contact by the retailer is whether the customer would have initiated contact on her own. The answers can be quite revealing when cross matched against the customer behavior patterns that triggered the service contact. "The answers help retailers figure out which customers were really in need of help," says LivePerson`s Kohn. "It also provides information that can be used to create real-time models that help refine the rules of customer engagement."
It is also a good idea to ask in any survey whether the customer will recommend the retailer to others. Fred Reichheld captures the impact of this occurrence in his book "The Loyalty Effect," according to Wuesthoff. In his book, Reichheld states that respondents can be placed in three categories: promoters, passives and detractors. Promoters are valuable assets because they drive business growth due to their repeat and higher ticket purchases. Detractors can impair growth through their negative comments.
"In our current technological environment, negative comments spread all too quickly," says Wuesthoff. "Subtracting the detractors from the promoters makes it possible for retailers to a create customer loyalty score, which Reichheld refers to as the Net Promoter Score."
Indirectly, companies can measure the quality of their customer service by analyzing the metrics of their calls and customer behavior. This can be achieved by evaluating the number of service contacts that escalated from self-service to chat or a live agent, reporting on first call resolution, and examining customer retention data.
"The inference here is that customers will be more satisfied if their issues are resolved expeditiously and without requiring escalation," says Wuesthoff. "Additionally, if a retailer accepts the premise that satisfied and loyal customers behave in a certain way, and that delivering high-quality customer service is one of the key contributors to driving customer loyalty, then delivering high-quality customer service has a huge impact on revenue and growth."
Other service measurements include average response time per method of interaction and length of the interaction. In the case of response time, retailers need to have specific goals for each method of interaction. "It`s no different from setting a standard for how long it takes to find a sales representative in the store," says Maddox.
Duration vs. complexity
Length of the interaction is weighed against the complexity of the service issue. What is important is that service agents have all the necessary information to address the issue at their fingertips. "The goal is to answer the inquiry the first time and treat the customer with courtesy and respect by addressing their inquiry promptly and informatively," adds Maddox.
Slow responses to service inquiries hurt a retailer`s brand. 24-7 INtouch requires agents to respond to e-mail inquiries in less than 40 minutes. Even if the initial response tells the customer it may take 24 hours to answer the inquiry in detail or that the service agent will follow-up by phone within a specified period, sending the message promptly shows the retailer has a high level of interest in addressing the issue.
"Delayed responses to any customer inquiry hurt the retailer`s reputation, customer loyalty and future business," says Fettes. "Service is essential to boosting conversion rates and keeping customers."
Retailers can also improve their service by tracking the reasons for a return. This information not only reveals common complaints, but can help retailers identify products with high return rates, which are often due to a manufacturer`s flaw or poor representation of the color on the product page.
The information can be used to improve product quality and marketing and merchandising strategies. "This is all data retailers gather in the return process, but they don`t think to apply it to marketing and merchandising or quality control," says Assurz`s Hoffman. "We don`t always get a detailed reason for the return, and we don`t press when we don`t, but you can still track return patterns by the type of merchandise, color, etc. Acting on this information indirectly impacts the quality of service by reducing returns."
One point retailers need to continually keep in mind when refining their customer service capabilities is to be careful about over-automating. While the availability of numerous applications to create self-service customer service platforms makes it tempting to increase the level of automated interactions, live operators must always be available during customer service hours. "The more complex an item, the greater the value of a live customer interaction," says Kohn.
Having a live agent available 24 hours is highly recommended, because the Internet allows consumers to shop at any hour. Many small and mid-sized retailers choose not to because of budget issues and usually offer customer service for 12 hours a day or cut it off after 11 p.m. Central time. "Every retailer has a different approach to agent availability, but during the holiday season, they need to be ready to extend that capability 24/7, because they don`t want to disappoint consumers during the prime selling season," says Assurz`s Hoffman.
A part of the product
Finally, all customer service agents ought to be completely familiar with the products in the retailer`s catalog and committed to the retailer`s brand. "Good service agents are passionate about the product and an advocate for the retailer," says Kohn. "That`s a challenge when agents works for an outsourcing firm."
Having passionate, knowledgeable service agents goes a long way toward building trust between the customer and the retailer. "E-retailing is a virtual world, so it makes consumer trust harder to come by, especially if service agents can`t deliver on the retailer`s service promise," says Maddox. "Customer service is not a cost component of doing business; it is part of the product and the know-how behind that product. But thinking about service as a cost component is a common mistake for e-retailers. When e-retailers think of service as part of the product and their brand, they see its value."
They also see a more loyal customer base, which far outweighs the costs associated with quality customer service.
