Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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With e-retailers’ high cost of customer acquisition, it’s not surprising that e-services providers are lining up to help them protect their investment with solutions to smooth the path from selection to checkout. Datamonitor estimates that the e-services solutions market for software and services that attempt to remedy customer service issues online will reach $2.3 billion by 2005.
Westminster, Colo.-based Finali Corp. is rolling out fully integrated, live and automated web-enabled customer service software this spring. The company’s proprietary automation technology is designed to automate up to 80% of customer interaction in real time. This allows shoppers to resolve questions themselves on the web rather than phoning them in.
The automated portion of the soup-to-nuts offering is an animated character called a “netSage” that appears on pages to greet customers, explain features, gather information and cross-sell and up-sell. Online customers also can choose to be transferred to live help. In beta testing with a major computer manufacturer, customers with the automated virtual agent on their screen were two times more likely to add to a shopping cart and they accepted 20% to 40% of the up-sell suggestions.
LivePerson is a New York-based application service provider that supports online chat services for web merchants including multi-channel retailer The Wedding List.
“Any time shoppers are buying a luxury item such as a wedding gift online, they’re going to spend a bit more time doing it,” says Daphne Murray, The Wedding List’s vice president of marketing. “Almost everyone who comes to our site has questions.”
To handle them-and keep shopping carts on track-the site added LivePerson’s technology, putting the live chat help button on its the front page last May. While The Wedding List doesn’t disclose its web site bailout rate, sales figures suggest it’s decreased big-time. “Our sales went up 100% from May to June, and they’ve stayed strong,” Murray says.
Los Altos, Calif.-based Fireclick’s Netflame technology speeds page downloads by analyzing clickstream patterns on a retailer’s site and using algorithms to anticipate and pre-download to the browser cache the content elements users are most likely to request next. In October, Chicago-based web art seller Art.com added Fireclick’s last mile content acceleration solution to speed up page downloads already torqued by the addition of Akamai servers, reducing page download times by an average 20%. The idea is that more speed results in more page views and ultimately, fewer abandoned carts.
Though e-service vendors can deliver results that sound impressive, consultants warn they can come at too high a cost. “If an e-retailer is selling commodity items that are low margin, it doesn’t make as much sense to implement expensive strategies to hold onto customers-the cost of the strategy or technology may be more than they’re making on their customers,” Loeber says.
But the providers of automated services and software designed to keep shoppers glued to their carts say it’s not the size of the product margins but the volume of traffic that determines the value of those services and software to e-retailers. “Even if they don’t have high dollar-value SKUs, they still have a customer support cost,” says J.B. Holsten, Finali’s chief business development officer. “We reduce that. The more you can automate support, the larger the dollars delivered to the bottom line.” l
Reducing checkout aggravation
One reason shoppers abandon carts is that the checkout process can be so cumbersome. Witness the success and favorable press that Amazon has gained from its one-step checkout. Now a start-up company is hoping to make that one-step process-or as close to it as possible-available to all web retailers.
Philadelphia-based Catavault has created a web site where consumers can register user names and passwords. When they are ready to shop, they click from the Catavault site to the retail site. When they need personal information to log onto a site or to check out, they click the Catavault button and the appropriate information is filled into the blanks.
While some PC programs will remember names and passwords, that service does not help if the user is away from home or office. In fact, that was what gave rise to Catavault. Jon Bari was at an airport trying to get onto a web site to change a flight and he couldn’t remember his password. “All my credentials were in Philadelphia and not with me in Boston,” Catavault’s founder and CEO says.
Web shoppers register at Catavault.com, which stores all user names and passwords. The cost to the merchant of participating is nothing. Catavault makes its money by licensing the service for private label use, as it has done with Time Warner, and by working out performance-based marketing arrangements with retailers. It has signed 375 merchants who pay commissions of 1% to19.5%.
Catavault launched last year and today has more than 3,000 merchants. One of the first users was BabyAge.com. “We had a lot of customers who were continually e-mailing us asking for their passwords,” recounts Jack Kiefer, founder and CEO. “When I heard about this, it was just a natural.” While Kiefer cannot quantify whether Catavault has resulted in saved sales or additional sales, the number of customers seeking passwords has diminished. Other Catavault merchants include CDNow, Amazon and Zany Brainy.
Bari says Catavault users number in the tens of thousands. The company is marketing through viral marketing, p.r. activities and through placing buttons on retail sites. The company promotes usage by offering special deals at participating retailers through the Catavault site.
Reasons shoppers abandon their carts
- 56% said shipping charges were too expensive
- 41% said the item was unavailable
- 29% said the site was too difficult to navigate
- 21% said the order wouldn’t go through
- 18% said the order form was too complicated
- 15% said they were unable to use coupons or discounts on the site
Source: Yankee Group