June 28, 2007, 12:00 AM

Web retailers must handle with care both customers and customer service

Merchants must contend with customers who want to shop on their own terms.

One bad customer service experience and a customer could stop shopping a retailer for life. Customer service is that crucial. What’s more, customer service can be a key differentiator among competing merchants. For in contrast to one bad experience, customer service that routinely excels can keep a customer shopping a retailer for life.

Today in Internet retailing, merchants have much more to attend to in the realm of customer service. It’s no longer simply staffing a bank of phones.

“The Internet has changed the shopping behavior of most consumers. They do not feel like they need to shop on retailers’ terms anymore. They expect to shop on their own terms, how they want,” says Greg Fettes, CEO of 24-7 INtouch, a customer service technology and services vendor. About 60% of the company’s clients are web retailers. “Consequently, businesses are moving beyond call centers. An incredibly high percentage of retailers now are looking for live chat and e-mail response functionalities as a result of shoppers wanting to shop on their own terms. Plus, customer self-service is becoming a big piece of the puzzle.”

Ahead of the pack

So web retailers must contend with multiple methods in which their customer service must shine if they want to keep customers coming back and distance themselves from the pack of other retailers.

“Merchants most successful at customer service are the ones that offer what works best for each sales channel,” says Gregg Gumbinger, vice president of business development at Assurz Inc., a customer service technology and services vendor. “For catalogs it might be an 800 number, for online it might be e-mail, which is really shifting to live chat, which seems to be working very well in terms of service before and after a sale.”

But the growing number of customer service avenues does not mean retailers can take their eye off of the mainstay: the telephone. Many customers that first go the e-mail, live chat or self-service route may very well wind up on the telephone, experts say. And that means making sure telephone-based service is better than ever for the business.

Bridging the gap

“Forward-thinking retailers understand the call center is crucial for bridging the gap with customers who still are apprehensive about buying online. And these retailers hire and train more knowledgeable representatives,” says Craig Smith, founder and managing director of Trinity Insight LLC, an e-commerce consulting and services firm. “Customer service reps who are better educated and specialize in categories are driving incremental sales through upsells and question-based selling sequences.”

Increased sales is one way to gauge success in customer service. Retailers, however, must come up with their own sets of metrics to measure what they believe to be successful service, experts say. Merchants must create a standardized set of key performance indicators for all customer service channels, regardless of whether service is in house or outsourced, to ensure good service and be proactive in improving the customer experience, Smith says.

One way to measure as well as be proactive is, simply, to ask.

“Survey your customers and know exactly how they want to contact you,” Fettes says. For instance, he says, retailers serving 16- to 25-year-olds will be on live chat. “But,” he adds, “a department store may be heavily focused on voice. Retailers must pay attention and talk to their customers.”

And after a merchant determines the how, where and when, it then must fine tune the numerous aspects of the customer service experience, including ones that foster web site traffic, sales and brand awareness.

“If a business has phone support, it means making sure hold times are held to an appropriate level, along with having messaging on hold with information driving customers to certain parts of the web site if they need specific information,” Gumbinger says. “There also can be upsells and cross-sells there while customers are waiting. And if you offer online support like chat or e-mail, you have to clearly set expectations up front with regard to how long things will take.”

Setting expectations is extraordinarily important in self-service, a customer service method growing in significance in online retailing. Self-service requires online shoppers to search databases filled with answers to common customer service questions or to answer multiple questions that narrow their search to a small number of possibilities.

“Retailers need to provide online customers with the means to serve themselves,” Smith contends. “Inbound calls to a call center relating to standard questions like, ‘Where is my order,’ do nothing but drain profits from a retailer’s bottom line.”

However, self-service comes with some baggage. “People either love it or hate it,” Fettes says. “But as part of an overall customer service strategy, it is an important thing to have on your web site, along with live chat, phone and e-mails that actually get responded to.”

The self-service paradox

The “love it” or “hate it” feelings stem from some companies handling self-service very well and others making a mess of it, industry observers say. This creates an environment where retail customers approach any self-service application skeptically.

“Continued growth in adoption of online self-service may face customers’ stagnating or even declining satisfaction with self-service. A paradox continues to exist regarding service executives’ increasing focus on growth of their online self-service initiatives without adequately addressing the effectiveness of these tools. Consumers continue to find self-service results to be irrelevant and inaccurate, indicating a failure to monitor performance metrics that measure the effectiveness of self-service implementations,” says Zachary McGeary, associate analyst for customer service and support at JupiterResearch.

“Underlying this lack of effectiveness,” McGeary continues, “the knowledge and interaction applications that support self-service often exist separately from those that support other processes. Unwittingly, many companies continue to do a great disservice to consumers who have demonstrated willingness to give self-service a try. Continued failure to resolve customers’ inquiries through self-service will not only harm long-term adoption but also increase the overall costs of providing customer service.”

Regarding costs, a new avenue for customer service akin to self-service is beginning to pop up and requires very little investment on the part of Internet retailers. Customer involvement during the customer service process is a fast-growing trend, says Adam Sarner, principal analyst who specializes in customer relationship management at research and consulting firm Gartner Inc.

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