August 14, 2003, 12:00 AM

Why self-service is crucial to e-retailers’ profitability

At as much as $32 a call, retailers can’t afford to have many customers calling customer service. “The new religion on the web is optimizing self service,” said a WebSideStory exec.


Retailers may have had in mind that web customers wouldn’t pick up the phone for customer service, but consumers failed to get the message. They called retailers in such numbers that call centers often were overloaded. And that has increased the urgency to create workable self-service sections of web sites. “We went online in 1997 kicking and screaming because our customers pushed us there,” Dan Gudema, e-commerce analyst with catalog retailer ABC Distributing LLC, told the eTail 2003 East conference this week. “By 1999 we were not prepared for the deluge of traffic that hit the call center from the web site. 50% of people who called were not getting through to us.”

ABC’s answer was to build an online customer service support center to answer common questions. But it took time for ABC to understand the questions well enough to provide pre-emptive answers and to accustom customers to finding their answers online before calling. At first, Gudema said, a third of customers were able to answer their questions right away from data on the web site. That meant, however, that 66% got a delayed response, essentially an e-mail saying “We’ll get back to you “ But in the last two years, ABC has improved real time response to 95%. It achieved that by constantly analyzing pathways. “It’s resulted in 50% reduction in call center staffing saving millions of dollars,” Gudema said.

The importance of deflecting those calls was illustrated by research into call center costs by WebSideStory, marketing analytics provider. Rand Schulman, chief marketing officer, reported to a skeptical audience that the average call to a customer service center costs $20 to $32. “But on the web that same service question can be answered at a cost of 10 cents to $1.17,” he said. “If the web can be used to deflect services calls from your call center to the web it really reduces your cost.”

When he asked the audience for a show of hands as to who believed the $20 to $32 costs, few hands went up. “I see the majority of people out there do not believe this number,” Schulman said. He noted that costs include hiring, training, turnover, management, the expenses of the facility itself and others. “If you come to our booth, I’ll show you how I got to it,” he said.

The benefits of converting customers to web self service are long-term, Gudema said. “Once you switch people to the web, they never go back to ordering or seeking customer service over the phone,” he said.

Added Schulman: “The new religion on the web is optimizing self service.”


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