Service To Order

Dec. 21, 2004
A Web page can't replace top-notch support.

A funny thing happened when companies set up their Web sites to operate 24/7, expecting to either drastically reduce or eliminate the need for customer service staff altogether. It didn't work out the way they expected. If anything, the world of e-commerce heightens the need for immediate attention to customer needs. People doing business over the Internet not only expect service around the clock, they also expect they'll get at least the same quality, speed, and effectiveness of service as they would if they walked into a store, or placed a telephone order with a supplier. What's more, they tend to react more quickly to problems, and usually have more information at hand with which to challenge the quality of service. Customer service is the most important factor -- ahead of both price and on-time delivery -- in determining whether a potential buyer returns to a particular merchant on the Web, according to a survey by, a Los Angeles firm that tracks customer satisfaction with e-commerce. Unfortunately, many manufacturers still offer minimal or no service options on their Web sites. In other words, you got a problem, pick up the phone and dial our 800 number. Deal with our friendly telephone tree, mind-numbing Muzak, and the interminable wait on hold before you get any help. In the digital age, though, that kind of treatment of the online customer won't cut it. What manufacturers and retailers alike are finding in the world of Web-based customer service is that, in many instances, customer questions and problems can't be handled without human intervention. "Companies are going to have to figure out how to get a person on the line quickly when you need to talk to a human being," says Russell Brackett, senior partner in Computer Science Corp.'s consulting group in Cambridge, Mass. All the same issues that companies faced in the brick-and-mortar business world -- order fulfillment, customer questions, shipment errors, product returns, warranties, etc. -- are alive and well in the world. The big difference is that when ordering products over the Web, customers often make errors or get confused. That's when they need help. About two-thirds of the people who fill e-commerce "shopping carts" with selected items abandon those carts without ever placing an order, according to Paul Cole, global leader of Ernst & Young LLP's customer-relations-management practice in Boston. "The decision to abandon a shopping cart is often born out of confusion, or out of concern about security or accuracy." Problems or questions surrounding the filling of orders over the Web also plague e-tailers. Often these snafus can be traced to companies' failure to link the Web site to the back-end business systems that actually fill the order. For example, David Simbari, president of Optum Inc., a supply-chain-execution software company in White Plains, N.Y., placed an order over the Internet for a set of $80 lenses for his sunglasses. Dealing directly with the manufacturer's Web site, he agreed to pay extra for one-day delivery. A few days passed. When Simbari, who had neglected to write down the order number, called the manufacturer, it took the customer service person 20 minutes to find his order. Then Simbari learned the lenses were out of stock and back-ordered. Simbari logged onto the Web site the following day to check his order's status, using the order number. All he could find out was that the order had been received. "I continued to check the Web site daily for two and a half weeks, and my order status never changed," he says. Finally, about three weeks later, he received the lenses. The next time he needs new lenses for his sunglasses? "I'll go to a brick-and-mortar store," he says. While Simbari's difficulties online stemmed from a lack of connection between the seller's Web site and its back-end business systems, the troubles he encountered could have been ameliorated had he been offered the option to interact with a customer service representative. Fortunately, a host of online customer service firms, including LivePerson Inc., eAssist. com,, and PeopleSupport Inc., have sprung up to provide this service on an outsourced or contract basis. For instance, MetalSite LP, the steel industry online trading system, contracts for online customer service support from LivePerson. Webvan Group Inc., the Foster City, Calif.-based online grocery delivery service run by former Andersen Consulting CEO George Shaheen, also uses LivePerson. Based in New York, LivePerson provides a team of customer support people who work "behind the screens" to provide Webvan customers with immediate help when they have a question or problem. "We offer a text-based chat service," explains Robert LoCascio, president and CEO of LivePerson. "The reality is that humans need to be able to ask questions. The Internet is not just a vending machine." LoCascio says having live support fulfills the expectations most people have for conducting business over the Internet. "There's this unwritten promise that the Internet is supposed to be real time, but without live customer support you're not doing that," he says. LivePerson, which has 450 clients, charges a $1,000 start-up fee and a monthly fee of $250 per operator. A single operator can handle up to four live chat conversations simultaneously for the same client firm. This type of outsourced online customer service also allows companies to learn what the problems are with their products or their Web sites so they can be fixed. Says LoCascio, "If 1,000 people are having a problem with your shopping cart, then you can see what it is, improve it, and improve the business." Executives can try out LivePerson's service by going on the company's Web site at Once on the site they simply click on the "click for a live person" box. In a matter of seconds a message appears on the screen. On a recent foray IW conducted a live chat with a LivePerson operator named Tracy, who described the company's customer support service. These online help services aren't just for retailers. They can be used by manufacturers and others doing business-to-business e-commerce just as effectively. For example,, a Web-based market for industrial equipment, uses the online customer support service "We wanted a Web-based live support function," says Michael Coffin, CEO of the San Diego-based online market for metal cutting and forming machines. It took just four weeks to get the online customer-service system up and running. "Our customers are Internet-aware but not necessarily Internet-savvy," Coffin says. "They're still a bit befuddled when doing business-to-business transactions. Having live support for them is important." eAssist not only offers Equipp .com customers a live chat feature on the Web site, but it also provides a voice feature. "We don't want our customers to have to wait for an answer when they have a question," says Coffin. "These people are in a hurry to get something done. To us, customer service is one of the most important functions of our business. It helps us to turn a visitor into a repeat buyer." But customer service encompasses a lot more than just answering questions. Other issues such as complaints and handling warranties now can be resolved over the Internet. For instance, online complaint services can do the dirty work for consumers who want to lodge gripes to retailers and manufacturers. Warranty support is another key area of service that often is overlooked. WarrantyNow, an extended-warranty-service administrator, offers consumers online warranty support. Thus, when a customer has a problem with, say, a new high-definition TV set or digital video disc player, he or she can go online to start the service process. "We're trying to make these transactions easier for the consumer, as well as for other parties involved," says Ron Goedendorp, CEO at WarrantyNow in San Francisco. WarrantyNow handles online warranty administration for companies selling automobiles, computers, consumer electronics, furniture, watches and jewelry, exercise equipment, and tools. Another company that was quick to provide its business customers with online support is Consolidated Freightways. In April 1999 CF began offering real-time, two-way dialogue with customers through its Web site. "Our real-time, interactive e-commerce solution simply makes us easier to do business with," says Joe Schillaci, executive vice president for sales and marketing at the Menlo Park, Calif.-based transportation firm. Developed by NewChannel Inc. of Redwood City, Calif., the new technology connects visitors at with a CF representative while online. Using a dialogue box, CF staff converse one-on-one with customers, providing assistance, information, and sales help. "Two-way dialogue via the Web is highly dynamic, enabling CF to build a personal relationship in an environment that has been otherwise impersonal and one-sided," Schillaci says. One of the reasons online buyers abandon their shopping effort at a particular Web site is a lack of information to clarify a question or clear up confusion. In fact, according to Vikas Agrawal, an e-commerce specialist in McKinsey & Co.'s Palo Alto, Calif., office, the lack of attention to customer service can drive would-be buyers away. "People often have nonstandard questions," says Agrawal. "And with a lot of Web sites, there is no mechanism to ask these questions. You are left to figure things out on your own, if you can." Experts cite a variety of deficiencies on many sales-oriented Web sites:

  • No toll-free telephone number for assistance. According to one study, fewer than half of commercial Web sites provide an 800 number, says Ernst & Young's Cole. "It's almost as if they don't want you to talk to them," he says.
  • An 800 number is listed, but calls go unanswered. In some instances this occurs because call centers are staffed only during normal working hours, while the Web site is accessible 24 hours a day.
  • Similarly, a site may claim a "live" customer service chat option but no one is available to respond.
  • The Web site lacks a section for frequently asked questions.
  • There is no Q and A option, where e-mailed questions are answered within a 24-hour period. "Providing an e-mail feedback mechanism seems like a fairly obvious thing," Agrawal says, "but you'd be surprised at the number of companies that never answer their e-mails."
One danger with e-commerce is the temptation to regard a Web site primarily as a way to reduce customer service costs by replacing customer-service phone calls costing $6 with Web site visits that cost 10 cents. But rather than diminish the need for human assistance, a Web site tends to dramatically increase the number of contacts a company has with its customers. "The battleground over customers in the next two years is going to be in the area of customer service," predicts Greg Stack, a vice president at eLoyalty Corp., a Chicago systems integrator. Many growth companies have found it necessary to increase customer-support staff as a result of e-commerce, rather than slash it. For example, Dell Computer Corp. continues to add sales-support representatives. Even so, making product information available on the Web site and accepting orders online has enabled Dell's call center staff to be more efficient. "It gets them out of [the mode of] being order takers and allows them more time to answer the in-depth questions that customers have," says John Fruehe, product manager for John Sheridan contributed to this article.

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