February 1, 2007, 12:00 AM

Serving the customer

E-retailers step up their customer service programs with more staff, better interactive tools and faster response times.

When it comes to customer service, online shoppers above all else want consistency.

If a call or e-mail goes unanswered or a service rep can’t help a shopper track a package, customers will vote with their pocketbooks and take their business elsewhere.

These days, given the tightening market for new customers and the shift to generating more sales from repeat buyers, web retailers are thinking long and hard about improving their customer service programs. But in general Internet Retailer’s latest monthly survey reports that web retailers think they are doing an adequate job of responding to their shoppers’ questions and concerns and they are equipping their e-commerce sites with more interactive self-_service tools that enable customers to update profiles, track packages and view past transactions.


Almost all of the 320 merchants taking part in the _survey-this one on customer service responsiveness and hiring trends-have made interactive customer service a basic component of their e-commerce program. For instance, 93.5% of the chain retailers, catalogers, virtual merchants and consumer brand manufacturers participating in the research have a “Contact Us” form on their sites. 90.5% of web retailers also provide service reps with real-time links to customer data such as shipping and billing information and transaction histories. Online customer service programs are also becoming specialized with 59.8% of retailers _employing as many as 5 reps to handle web-only calls, e-mails and live chats and 12.9% with more than 25 contact center employees focused exclusively on Internet-related inquiries.

Across the board web retailers are hands-on with _customer service and prefer doing the job internally rather than outsourcing it. The survey, which includes responses from 178 virtual merchants, 67 chain retailers, 40 catalog companies and 35 consumer brand manufacturers, finds that 87.1% operate customer service departments in-house, compared with 12.9% that use an outside call center or service provider.

The survey was e-mailed in early January to all _subscribers of IRNewsLink, the magazine’s e-newsletter, and all responses were collected and analyzed by WebSurveyor Corp., which has partnered with Internet Retailer in a series of surveys on the e-retailing industry. The survey reveals that the _majority of web merchants run small, but growing customer service departments. 85.6% of companies employ fewer than 50 service reps, with about half–49.3%–employing 1 to 5 reps. In comparison, only 8.8% operate a contact center with a staff of more than 100 reps.

This particular survey includes detailed responses from mostly smaller web retailers–71% of all companies taking part in the survey have annual e-commerce sales of less than $10 million. But despite their size, Internet retailers across the board are clearly in a hiring mode. They are also using a variety of conventional and word-of-mouth advertising to attract qualified candidates. For instance, 76.8% say they will hire more service reps this year. Specifically, 50.7% of the chain retailers, catalogers, virtual merchants and consumer brand manufacturers plan on hiring as many as 5 new reps, compared with 15.1% hiring between 5 and 10, 8.4% up to 50, and 2.6% more than 100.

The survey further reveals that 22.6% of companies pay their customer service workers $7 to $10 per hour, while 31.4% pay $11 to $12 per hour; 17.5%, $13 to $15; 3.3%, $16 to $20; and 2.6% more than $20 per hour. Disclosing salary information remains a confidential and competitive matter with many retailers, as evidenced by the 14.6% of companies that prefer not to disclose a specific range.

Finding staff

Call centers experience frequent employee turnover and web retailers are constantly advertising to attract and retain more reps. 18.2% of companies in the survey have reps with an average of more than five years on the job, while the average for 32.8% of companies is less than two years. 16.7% have reps with average tenure of two to three years, and 16, more than three but less than five.

Interestingly, at a time when web retailers are using more social networking and other types of one-on-one marketing to spread their merchandising message, most online merchants list word-of-mouth advertising and employee referrals as their chief means of finding and hiring new service reps. Almost two-thirds of retailers in the _survey-58.9%-prefer word-of-mouth advertising and employee referrals as their top methods for recruiting, followed by newspaper/magazine want ads and online job boards.

Retaining a qualified staff remains a top priority for most web retailers. But equally important is adding new interactive tools and programs that reduce customer complaints and empower shoppers to answer their own service-related questions or update their personal information when it’s convenient.

Advanced self-service

Across the board, whether it is a means to control expenses or empower shoppers, retailers are building and updating their e-commerce sites with a greater array of self-service tools. Many shoppers like self-service customer service because it provides them with real-time access to order information and enables them to update their personal information when it’s convenient. The most frequent self-_service tools web retailers offer are the ability to track order status; change a method of payment; change a name, e-mail address or password; and view past transactions.

But web retailers also offer more advanced self-service applications. For example, 19.7% of companies in the survey have applications that allow users to edit gift registries, wish lists or shopping lists. 19.1% also let shoppers apply an online gift certificate to a new or existing account and 14.3% enable customers to view a gift certificate balance.

Merchants participating in the current Internet Retailer research are taking an active role in growing their internally designed and maintained customer service programs. But they’re also drawing the line on farming out any or all of their operations to an outside service provider. 83.5% of web merchants have no plans to outsource their customer service functions, while 6.3% plan to do so within six months and 1.7% in more than six months.

The majority of companies also have mixed views of live chat for customer service. Done correctly, live chat-communicating with customers through real-time text messaging rather than phone or e-mail-can give a retailer an immediate opportunity to develop rapport with the shopper and guide the shopper to the right merchandise. But live chat can also be complicated to implement and service reps must be adequately trained on the application and on the right way to conduct such a dialogue.

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