December 26, 2000, 9:55 AM

The march of technology---and your competitors---keep upping the ante on customer service

Nothing raises the stakes like success. Consider the 1999 holiday season for Internet retailers: Online sales steamed past all predictions, ranging from $5.3 billion to $10.5 billion. Along the way, e-commerce executives reported fewer site outages and order fulfillment problems than a year earlier. Yet high-profile failures made some of the season’s biggest headlines.

Consumer dissatisfaction with slow e-mail responses and long phone queues were rampant during the holiday rush. And many retailers such as Toys “R” Us experienced well-publicized problems with delivering Christmas orders. Most of these problems could be cured with more investments, but it’s not that simple. As investors grow restless for proof that Internet retailing will generate profits, the march of both technology and competition are upping the ante for customer service.

So while you’re busy ensuring that your Web store can provide personalized answers to customer e-mails in under 30 minutes, and promising Christmas delivery of orders placed before midnight on Dec. 20, consider these advances in customer service technology.

Instant messaging tools such as text, voice, or video-based chat promise immediate answers to your customers and allows those with only one phone line to get help without logging off to make the call. They also stretch a retailer’s customer service resources by allowing reps to work with several customers at once. Using Web chat, reps can track exactly where the customer has been on the site, which helps pinpoint trouble spots. And because connections are instant, live support can anticipate problems before they crop up by identifying customers lingering over pages or through stages in the ordering process.

Supplying support

A growing selection of real-time support software and services is available, and companies pioneering new customer support technologies are attracting heaps of venture capital. FaceTime Communications recently raised $30 million from investors including Compaq and Novell.

The amount of money flowing into such companies, plus moves by traditional call center vendors to build similar capabilities, means that e-retailers have a strong selection of goods and services. But not all consumers are smitten with Web chat. Response to unsolicited support is especially mixed, due the novelty as well as privacy concerns. And already there’s talk of a future beyond chat. Broad-band and integrated customer support platforms are under development. These applications will bring richer interaction with customers online-while requiring new levels of customer service skills, in an ever diminishing support staff labor pool. Before long, customer service agents will need to boost their knowledge and speaking skills with the polish and video presence of TV personalities. Where will retailing turn for this expertise?

Finally, e-retailers need to get serious about using the wealth of click-stream data generated by customers and stored in data warehouses or so-called clickstream “Webhouses.” Vendors have begun introducing a new generation of data-mining and analysis tools meant to sift through the clutter. These products mean that retailers can study clickstreams in real time, supporting sophisticated Web personalization and effective upselling and cross-selling of products and services. Companies that sell virtual products, such as NextCard, are adept at using these tools today. But soon, anyone selling online will need to master them.

Web Technology vendors-and your key competitors-are steadily raising the bar on customer service. These tools are more than marketing ploys or gimmicks to draw crowds of customers. Retailers need a plan for investing steadily and wisely, a strategy for turning the Internet’s customer service potential into real progress.

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