December 26, 2000, 9:55 AM

The Customer`s Always Right (Even on the Internet)

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Yet early e-commerce pioneers have had ample time to study and rethink their customer service strategies-and deep pockets to execute solutions. But most companies, including the 400,000 small businesses expected to be selling online by 2004, lack the resources to install personalized customer response programs. And the merchants that can afford such features, still aren’t making customer service software-or instant access to an employee who can help them with their problem-a top priority.

Sorry, not interested

For example, a recent study of 25 top e-commerce sites, including Dell Computer, Amazon, and other leading retailers, reveals that 90% have no immediate plans to hire a full-time customer service manager, let alone install a Web-based customer management system or real-time shopper assistance program. The study, by North Hollywood, Calif.-based Net Effect Systems Inc., also finds that 75% of the companies surveyed don’t list a toll-free phone number on their Web sites.

Upscale retailers such as Nordstrom, Macys and Blooming-dale’s made their reputation by the meticulous attention they pay customers when they walk in their stores. Yet on the Internet the only way shoppers can contact those chains regarding a purchase or delivery problem is by e-mail.

Cincinnati-based Federated Department Stores Inc., which operates both Macys and Blooming-dale’s, and Seattle-based Nordstrom, contends that most online customers prefer communicating through
e-mail instead of waiting on hold to get their questions answered.

But having a phone number listed on the Web store is certainly one more way Web merchants can build credibility with their customers and is another alternative shoppers can use if a retailer’s e-mail system or server is malfunctioning. “Retailers just aren’t keeping up with their customers’ expectations,” says Richard Berkman, senior analyst for net.Genesis Corp., a Cambridge, Mass., e-commerce intelligence and Web analysis firm.

Once a shopper makes up his or her mind to make a purchase online and pay for the item with a credit card, the transaction can be completed in about three minutes. Yet the Net Effect study points out that almost two-thirds of people shopping on the Web abandon their purchase prior to hitting the check-out button because many merchants are still operating difficult-to-navigate Web sites or making it hard for customers to get their questions answered. In many instances, the Web site doesn’t have a help button or a frequently asked questions page.

“There’s more to merchandising than lining up inventory and opening a storefront,” says Ronnie T. Marshaik, vice president of Patricia Seybold Group, a Boston-based Internet retailing research company, and co-author of, a book on building long-lasting customer relationships over the Internet. “Customer service at many sites is mediocre and won’t improve until retailers get around to really rethinking their policies.”

Some star pupils

Despite the fact that shoppers aren’t very satisfied with the level of service they’re getting from Web merchants these days, there are examples of retailers who know what it takes to make their customers happy. That’s because they’re taking the time to think through what’s really important in keeping shoppers coming back.

Medalia, for one, conducted extensive market research and analyzed customer service policies of more than two dozen e-commerce sites before launching Justballs in January. After looking at sites where it took as many as six clicks to locate the merchant’s customer service information or scouring pages that didn’t even list the retailer’s address or phone, Medalia built the Justballs store with seven clearly visible help buttons located on the front page.

In addition to features that enable shoppers to track their order or view what’s in their shopping cart, Justballs also has a “help desk” button that in a single click gives shoppers access to the retailer’s shipping, payment, exchange or return policies and other pertinent information. Medalia could have built a Web store that didn’t have such easy-to-navigate features, But Justballs has ambitious plans to achieve sales of more than $2 million next year and Medalia believes he won’t hit those numbers if he doesn’t take the time now to build a base of repeat shoppers.

At Justballs, customers’ orders are shipped in under two days and 95% of all customer complaints are resolved by contacting the shopper by phone or e-mail within one day of receiving the inquiry. Today, about 25% of Justballs’ business comes from repeat customers, a figure Medalia wants to double next year by enhancing customer service over time with new applications such as an interactive call center. “To be a really serious player in e-commerce, you simply have to answer your
e-mail quickly,” he says. “Computers enable prompt feedback between the retailer and the customer. Getting back to people inside 24 hours is just a good way of conducting business.”

When merchants begin analyzing their store and fulfillment policies and what they can do to make improvements, their first thought might be adding more technology such as personalization software or customized order tracking. But not all the solutions have to be technical and they don’t have to be expensive. As in the offline world, customers appreciate good basic service when they get it. And not only will they return to an establishment where the clientele is kept happy, they’ll also tell their friends.

Online seafood retailer, for instance, doesn’t operate a big call center or spend millions on interactive technology. But CEO Stratis Morfogen does read 90% of the several hundred e-mails the company receives each day. If he spots a problem, he personally writes the customer a follow-up letter to make sure the customer is happy and wanting to come back. The company handles about 100 orders each day and so far such detailed attention to shopper satisfaction is paying off. The average customer spends between $80 and $100 each time they visit the site (compared to the $30 average spent on seafood at the grocery store or a fish monger) and repeat business is accounting for about 40% of’s annual sales of $5 million.

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