Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Phone calls, faxes, e-mail, Web chat: If only one hand knew what the other was doing. If only you had enough hands. Instead the fragmented, disconnected state of customer service among e-retailers shows up in abandoned shopping carts, confusing return policies, backlogged orders and other signs that
high-tech promises are often mired in low-touch problems.
Web merchants generally are operating “ineffective sites that disappoint more than they satisfy,” charges Donna Fluss, analyst with the Gartner Group, Stamford, Conn. High on her list of complaints: “limited site capabilities, lack of integration between Web sites and call centers, substandard customer service, and bad site design.”
The trouble starts when a company takes the silo approach to building its customer-service systems, with the traditional call center sticking to phone inquiries and a separate group taking care of Internet business. The performance is typically uneven-and not just a little: Phone calls usually get handled within minutes, while e-mail inquiries may take days, if they get answered at all.
According Forrester Research, Cambridge, Mass., more than 40% of online consumers stopped shopping at a particular site because they were unhappy with the service. Among the 37% who turned to customer service for help, 71% sent e-mails and about half phoned. Given the heavy traffic each is getting-many times overlapping queries from the same customer-merging these and other support channels isn’t just a good idea, according to Fluss and other observers, it’s a survival strategy. Every e-retailer needs a customer-service hub managed by one staff and drawing from a common database.
“Our challenge is getting our customers the most complete information in the shortest time frame possible,” says Mark DeChambeau, vice president of operations at SmarterKids.com, an e-retailer of educational toys based in Needham, Mass. “In such a crowded marketplace, eliminating time on hold and long e-mail delays are significant competitive differentiators.”
The good news is that e-commerce already has reshaped how many call centers work. First, to improve flexibility and scalability, Web-based infrastructures are common. So you’re likely to see customer-service agents using a browser or Web interface while on the phone with customers. Second, as the Web grows as a sales and support channel among traditional retailers, it’s only a matter of time before companies integrate their call center, interactive voice response (IVR), and Web systems to support and track transactions and interactions. Result: Call center staffers are just as likely to be fielding e-mail inquiries as phone calls. “Customer-service call centers are not going to disappear because of Web sites,” says Fluss. “In many cases, Web sites initially trigger higher call volume.”
The Web’s long-term promise lies in delivering personalized, one-to-one service to customers at a fraction of the cost in other channels. Industry statistics put the cost of a phone call at about $4 per customer and IVR at 10 cents to $1 per call. Handling e-mail can cost even less. But the startup investments in Web-based customer-service technologies are anything but low budget. “Between 60 to 70% of the cost of an interactive customer service Web site will be labor,” Fluss adds, “for deployment, maintenance, training and integration.”
Web chat, which combines the immediacy of a phone call with the convenience and information-richness of e-mail, has become the most promising form of online service. It’s more responsive than e-mail, because getting an answer via e-mail can take hours or days. And Web chat reflects the fact that customers are shopping online because they want to-it’s an extension of the Internet experience. “If customers don’t have two lines, they have to log off and pick up the phone,” says Karen Reed, vice president of Internet operations for Coldwater Creek, a multichannel retailer based in Sandpoint, Idaho, that recently added Web chat. “They’re ordering online because they don’t want to have to talk to an agent.”
Understanding that, according to Reed, meant putting a priority on training Coldwater Creek’s customer-service staff to use the technology to the fullest. The company, which sells women’s apparel, jewelry and home accessories via its catalog, Web site and a handful of stores, has cross-trained seven of 28 call center agents to handle Web chat and e-mail.
Each spent two days being tested and learning the technologies, a bid to keep the level of service even with the performance of its call center, where the rate of abandoned calls stands at less than 1%. Coldwater Creek starts by looking for customer-service agents with strong writing abilities. “Their grammar has to be good,” says Reed, “They need to convey, in the written word, the same feeling, the same warm, helpful tone that we work very hard with agents to convey by voice.”
The levels of service must be equal, but the environments are not. “Over the phone, there’s constant talk between the rep and the customer, even while the rep is researching an answer to the question,” says Reed. “The customer knows you’re there and you’re working.” But Web chat is prone to lags while agents consider a customer’s question and research the answers. “To a customer, sitting and waiting 10 seconds is a long time,” adds Reed. So Coldwater Creek has worked with its agents to keep the dialogue going while they consider the customer’s request.
Likewise, SmarterKids.com has looked closely at the skills of its customer-service staff in mastering the technology to avoid lapses. “If our reps aren’t struggling with their equipment,” says DeChambeau, “that leaves more time to help the customer.”
Coldwater Creek first made sure it had online customers needing the help. That happened last year, when Web sales jumped to $9.9 million in the third quarter, blowing away $81,000 recorded for the same period in 1998. “We noticed our demographics on the Internet were increasing as well,” says Reed. “The 35-to-55-year old woman was now buying online. Until we saw that happening, we didn’t want to spend a lot of money and effort on a site that wouldn’t be seen by too many people.”