June 26, 2008, 12:00 AM

Customer Service

While retailers learn to chat, they also should eye other methods

Customer service is perhaps the most delicate matter in retailing. One bad experience and a retailer potentially can lose a customer for life. One great experience and a retailer can gain the loyalty of a customer-and the family and friends of that customer, who has become a brand enthusiast as a result.

E-retailers handle customer service through four primary channels: the telephone, e-mail, self-service and live chat. Relative newcomer live chat is experiencing significant growth among e-retailers looking to service customers in the ways customers desire. Instant messaging and chat rooms predate e-retailing and Internet users have become accustomed to using text in real time to communicate. E-retailers are just catching up with chat, and they’re earning satisfied customers while gaining new ways to market products.

“Retailers are leveraging chat to achieve different goals. These goals are becoming less about traditional customer service matters like resolution and time to resolution and more about sales metrics like decreasing cart abandonment and increasing conversion,” says Zachary McGeary, a JupiterResearch associate analyst who focuses on customer service. “Some retailers are engaging customers within the context of online interactions, monitoring customer sessions for signs of a need for help.”

Invitations to chat

These retailers are sending invitations to an audience that’s mostly welcoming or ambivalent. 30% of consumers would welcome a live chat invitation from an e-retailer customer service representative, but 33% would feel confused or annoyed and 38% are neutral, according to a recent JupiterResearch study.

“There is not a high risk for retailers to be doing this,” McGeary contends. “You don’t want to be blanketing all customer interactions with chat invitations. The idea is to get strategic and targeted with reaching out to customers.”

There are many instances, experts say, where e-retailers with live chat functionality, using real-time web analytics to monitor shopping activity and behavior, are being proactive and offering a chat to a customer.

For example, if a customer has entered credit card information more than once without success, a customer service representative can create a small pop-up window asking if the customer needs assistance. This helps the customer complete a purchase and helps the e-retailer avoid cart abandonment.

Or, if a shopper has more than $250 in a shopping cart for more than five minutes, McGeary suggests, that could be a sign of a problem. “E-retailers can reach out at that point to ensure all goes well. You wouldn’t say, ‘I see you have a problem,’ you ask, ‘Do you need any help with your purchase?’” he says. “This kind of live chat targeting today is more of an art than a science.”

Other opportunities

Live chat also introduces cross-selling and upselling opportunities. Representatives can offer customers ideas for related products during or after assistance.

“One client, one of the largest used car sellers, would place product messages in front of the customer during a live chat as the representative looked up cars in inventory,” says Greg Fettes, CEO of customer service technology and services vendor 24-7 INtouch. “A message might read, ‘While I’m looking that up for you, have you heard of the product guarantee?’ If the customer responds with a ‘no,’ the representative pastes in a two-paragraph description of the product guarantee. People can choose to read it or not.”

Fettes says during the last year 24-7 INtouch clients have experienced decreases in e-mail customer service inquiries and concurrent increases in live chat. “As more Internet retailers get more comfortable behind the wheel of live chat and do a better job,” he adds, “we will see a major shift in the percentage of interactions with live chat.”

While live chat offers retailers benefits, so does self-service. Many retailers are working on self-service, experts say, and would like to see a shift to this customer service model.

“Our research shows that if you implement a self-service channel, on average your phone traffic is reduced by about 12%,” says Johan Jacobs, a research director who specializes in customer service at research and consulting firm Gartner Inc. “Plus, you get an additional 6% of people using the self-service channel who are new customers. This is because if a retailer promotes the self-service channel, the younger generation comes to it for help with shopping. They are much more inclined to gather information and seek help in this manner than using a phone.”

In self-service, static FAQs is the status quo. These can be difficult for customers, though, because customers must hunt through a lot of text to find answers to their questions. To cure this problem, some retailers are adding search functionality to self-service to ease the process.

Consumer resolve

“Robust, front-end search should provide consumers with the same information retailers provide their customer service agents. But search still is lagging behind in self-service,” McGeary says. “The best customer service is not having to handle a call at all. Allowing consumers to resolve it themselves within the context of their purchase is the ideal.”

Self-service isn’t the only area that needs improvement: E-mail customer service requires the attention of e-retailers, experts say. Many online shoppers still view e-mail customer service as a black hole from which they’re lucky to receive a reply.

“Companies continue to underperform with e-mail-we see this trend across all industries,” McGeary says. “The number of companies overall that take three days or longer to respond, or don’t respond at all, is absolutely staggering; retailers, however, do better than companies in other industries. Our research shows that 15% of retailers take three days or longer or do not respond at all. 48% of retailers respond within six hours; 19% within 6 to 24 hours. In a retail environment where consumers are looking to make a purchase, timeliness is of paramount importance, so the focus needs to be on that six-hour turnaround time.”

Getting better, but …

E-mail customer service is better than it was five years ago, but too many retailers have been conducting it too poorly for too long and customers are losing interest in this method, Fettes says.

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