| BUSINESSWEEK ONLINE : DECEMBER 13, 1999 ISSUE | ||||||||
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| BUSINESS WEEK E.BIZ -- MANAGEMENT
Needed: The Human Touch Online retailers are beginning to discover the importance of customer-service reps who can talk and think Julia Deputy just bought her computer in July, so she's not one to navigate her way through the labyrinth of an online store to find answers to questions. She might have been stymied when her 8-year-old daughter wanted cargo pants from landsend.com but wasn't sure they would fit. In a store, you try them on. But what to do on the Internet? Deputy clicked on a button at the Web site that let her swap messages with a Lands' End Inc. operator. The $25 sale was done in minutes, partly because the operator's daughter owned the same pants. ''They make you feel incredibly comfortable,'' says Deputy, a physician's assistant from East Berlin, Pa. ''That's why this company will survive on the Internet.'' Indeed, with nothing less than survival at stake for many online stores this Christmas, kid-glove customer service is looming as the online merchant's secret weapon. Stung by falling customer-satisfaction ratings last Christmas--26% of customers in a Jupiter Communications study declared themselves unsatisfied--many stores have new tricks this time out. Some of them are depending on fresh technology to help them answer e-mail faster, update Web sites more often, and make the essentially self-service Web work better. But those sites may be left behind by bolder outfits, like Lands' End (LE). They're relying on the personal touch to make themselves stand out. It's a remarkable about-face led by the likes of e-tailers HomeTownStores.com and Cameraworld.com. At some sites this holiday season, live human beings personally greet each visitor with a typed offer of help--like those superfriendly greeters at Wal-Mart (WMT). At other sites, operators are on hand to instantly answer typed questions. Or, better yet, for folks who appreciate hearing a human voice, online merchants are equipping their sites with Internet-telephone capability. Shoppers who have only one phone line can look at merchandise and talk to a sales rep at the same time. These pioneers of online retailing are pushing personalized customer service even harder than their counterparts in the bricks-and-mortar world. They realize the Web has different rules. People expect to stand in line at the local hardware store. But Netizens already have shown they suffer from Internet impatience--they have to have it now. Two-thirds of all consumers who put goods in an electronic shopping cart don't close the sale, according to market researcher Forrester Research Inc. And as the Web's audience expands beyond the computer crowd to a wider audience, the impatience factor could climb. ''They don't want to have to search for things,'' says Barry Gilbert, president of jewelry site Miadora.com. ''They want to know what the answer is.'' Not that every Web site will get up-close and personal this holiday shopping season. Indeed, only 1% of all cybershops currently offer live support, according to market researcher Datamonitor PLC in London. It estimates that Web sites worldwide could sacrifice $3.2 billion in sales this year because they're not doing enough about customer support. So why don't Web sites get with the program? At Send.com, a corporate gift-giving site, top execs are pouring money and time into back-end logistics before concentrating on a friendly face--because customers complain most about slow deliveries and being unable to buy items that aren't in stock, says Executive Vice-President Tom Harden. Others say they don't think the tools are that good yet and want to wait. But those who are plunging ahead figure they've got to give shoppers the kind of TLC that will have them coming back for more. Web sites spend an estimated $40 in advertising to land each new customer, and they'd be much better off if they could eliminate customer churn. ''All of this is driven by the economics of attracting that customer,'' says David Sanderson, head of Bain & Co.'s e-commerce consulting practice. ''Service is a huge ingredient of trust.'' CHAT AND SELL. It's also an expensive one. Software that helps sites upgrade self-service cost up to $500,000, plus the price of installation and maintenance. Then there's the people expense. At HomeWarehouse.com, an online home-improvement store launched in October, customer-service operations may cost up to $2.5 million this Christmas season. Some e-tailers believe it's worth the expense. For starters, some say revenues already are up. At HomeTownStores.com, another hardware site, sales rose 30% within a month after a new personal-greeter service was launched in early fall. The site's chat operators individually greet all 14,000 daily visitors. Cameraworld.com reports that after it added a service that allows people to talk to reps via Internet phone calls, 25% bought something. That compares with just 3% for all visitors. Customer satisfaction is zooming at these sites, too. At Consumer Financial Network, which makes loans and sells insurance, e-mail automation software routes questions from customers to the service reps with just the right expertise to answer them. The site's customer-satisfaction rate rose 5% after the features were added this summer. HomeWarehouse.com goes a step further: Service reps answer people's questions even if they bought somewhere else. Kate Johnson, the owner of a health spa in Cupertino, Calif., couldn't learn from Home Depot Inc. why a garage-door opener she bought there was not working, but one of the experts at HomeWarehouse.com helped her out. Now, she pledges to make her next purchase online. ''They're knowledgeable, they didn't brush me off, and I could have saved eight hours if I had called them first,'' she says. Another payoff: Knowledgeable service reps can help Web sites hone in on what customers really want. Take Zany Brainy Inc., the King of Prussia (Pa.) toy retailer that launched its ZanyBrainy.com Web site in November. Because it wanted more than 30 customer-service reps to know as much about the merchandise as do its regular store clerks, it brought them to some of its 101 stores for training--and even made them take a ''creativity'' test to make sure they could think on their feet. Having real live people answering questions is crucial to Zany Brainy's sales, since its bread-and-butter business is educational toys. ''We're learning a lot in the same way that Zany Brainy stores learned from listening to our customers,'' says Thomas G. Vellios, the company's president. Not everybody is convinced that live bodies are necessary. Surprisingly, one of the holdouts is Nordstrom Inc. (JWN), the Seattle-based department-store chain that is famous for stellar personal service in its earthbound stores. Nordstrom.com Vice- President Bob Schwartz thinks live customer service can be a distraction to customers and e-tailers alike. Instead, the company reviews customer e-mail every day and makes changes quick. One result: Shortly after the company opened nordstromshoes.com on Oct. 1, Schwartz made the pictures of the shoes bigger. ''It may not be fancy, but it's what customers want,'' he says. Whether sites go all the way to live reps--or just part way--the pressure is on for online retailers to radically improve customer service. Even companies like Nordstrom say they'll probably add more service after the immediate press of holiday business dies down. The next three months will help show who's right: the people who invested heavily and early in customer service or the ones who put off getting personal. By Timothy J. Mullaney _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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