IQ News: IQanalysis - Ready to Serve

Customer-service sites attempt to connect consumers and businesses. Is anyone out there listening? Now that the frenzied e-holiday shopping season has come and gone, e-tailers and their bricks-and-mortar rivals face the giddy task of tallying the receipts from what was widely forecast to be a boffo year for consumer spending. While the booming economy and deeper penetration of PCs at work and at home fueled 1999›s e-commerce rocket, it likely will take weeks or even months before pundits and vendors issue their final verdicts on how e-companies fared during the holiday rush. What might be missing from the inevitable reports of big numbers is how consumers felt about the purchases they made online and, more importantly, what kind of experiences they had. Many sites came through the holidays with flying colors, but disillusioned shoppers discovered that not all online merchants could live up to their promises. Site outages were common, merchandise was out of stock and customer service was nonexistent. In fact, one out of four e-shoppers couldn›t complete their transactions, due to computer crashes, server gridlock or out-of-stock situations, according to New York-based Andersen Consulting. That›s hardly surprising, given that hordes of newbie e-tailers were focused on being up and running for the holiday season, which accounts for roughly half of retail sales in the offline world. In the hysteria to cash in on the e-commerce bonanza, some sites failed to recognize that building effective online brands takes more than jazzy marketing campaigns and catchy domain names. ˜So many companies were rushing to put up sites and sell something online that they completely forgot about fulfillment and customer service," says Thatcher Wine, founder and CEO of Feedback Direct, a customer service portal in Santa Monica, Calif. ˜A bunch of dotcoms blew out their budgets on advertising, so they weren›t able to follow through with great service." Merchants could pay a steep price for stiffing shoppers. A staggering 90 percent of consumers surveyed by Cambridge, Mass.-based Forrester Research said good customer service was critical in their selection of a Web merchant, and nearly half the respondents said they would stop shopping at a given e-tailer altogether if they were unhappy with the service they received. That should serve as a wake-up call for e-merchants hoping to be around for the long haul. ˜I think the biggest thing merchants can learn from this is that unless customers feel like they are getting personal attention and real-time service, they are going to go elsewhere„like the local corner store," says Larry Wasserman, vice president of marketing at New York-based Live Person, an online customer service technology provider. TIME TO LISTEN As consumers become increasingly frustrated with the problems of shopping online, Feedback Direct and Live Person„along with other customer-care services such as Sunnyvale, Calif.-based eGain„hope to leverage user feedback to prompt companies to action. Because interacting with customers can be a challenge for online merchants that never meet shoppers face to face, Live Person has developed a technology that allows subscribing Web sites to conduct real-time chats with consumers. The year-old company already has licensed its technology to more than 300 online merchants, including iQVC, Beauty.com and Gifts.com. Feedback Direct, on the other hand, aims to give consumers a choice of ways to connect with vendors, including 800 numbers, snail mail and e-mail. They can even lodge complaints anonymously. ˜Different customers want different things [from businesses they deal with] and we give them options," Wine says. Soft-launched last month and slated for full operation in the first quarter, the Feedback Direct service is designed to give consumers a standardized format in a centralized location where they can find contact information about businesses and reach them online. The site already has accumulated information on the thousands of companies in its database, which has been dubbed the Orange Pages. Feedback Direct plans to list every Fortune 500 company in its database, including major offline and online brands and merchants ranging from Amazon.com to Zenith, and later will expand listings and links to cover smaller, local vendors as consumer demand grows. It also invites users to suggest names of companies that they are interested in reaching. If consumers choose to correspond with businesses via e-mail, Feedback Direct provides an e-mail template that helps them formulate their queries. Live Person›s Wasserman thinks the e-mail solution for customer service has its limitations. ˜E-mail is good if a customer can wait for a long response or wants a preformatted reply," he says, ˜but the problem is it will take a few hours at best and, at worst, it could be four or five days till they get a response„if ever. And that›s very disconcerting to someone, particularly in the holiday shopping season." Not surprisingly, Wine doesn›t agree. He says that giving consumers the option of lodging their complaints anonymously will encourage more people to speak up. He adds that Feedback Direct audits the amount of time it takes for a company to respond. ˜When the company responds, we send you an e-mail and ask you how good the response was and whether the company did it on time," says Wine. ˜We close the loop." Beginning tomorrow, Feedback Direct will beef up its interactive customer service database to include such features as a user-enabled company ratings area and the Feedback Direct 50 list of companies that provide stellar service. Feedback Direct hopes to sell its analytical services and competitive data to businesses. Wine claims that the gold mine of consumer data he expects to gather will not be abused for the benefit of internal marketing, which the company plans to do on an opt-in basis. ˜We consider the dialogue between a customer and a company to be private," he says. GROWING EXPECTATIONS A veteran of US Interactive, New York, and other strategic Web consulting ventures, Wine founded Feedback Direct because of his personal frustrations as a consumer unable to communicate with businesses and as a business person who often found it difficult to gauge what customers were thinking. He believes the time is right for a stronger focus on customer service, pointing out that consumers are growing less tolerant of poor performance and service. While online shoppers once rejoiced simply at receiving the correct products from an e-tailer, undamaged and in a timely manner, they›ve become more savvy and demanding. ˜We expect a lot more now, because there are companies like Amazon and eToys out there," says Wine. ˜If you have a great customer experience at Amazon, you expect that same experience from every other company you do business with. So, I think some high expectations have been set." Chris Kelley, an associate analyst at Forrester, agrees. ˜Consumers are used to a certain level of customer service in the offline world and now their expectations are starting to get more sophisticated in the online space," he says. ˜When there are so many [e-commerce sites]„the prices are similar and the sites look similar„companies will need to go that extra step and use customer service as a differentiator." While there are some stand-out e-merchants, many still have a long way to go before consumers view them as trusted brands. Wine thinks a handful of e-tailing vets have gotten the formula down pat. ˜The companies that consistently do [customer service] well„Amazon, eToys and Dell„offer customers a great combination of service and utility," says Wine. ˜Those companies are very prompt and timely with their orders." And as for the losers in the category? ˜I won›t single out any companies that don›t do it that well, but I›m sure everybody has their own targets," he says. According to Kelley, e-businesses need to consider customer feedback beyond the holiday shopping season. ˜Merchants will definitely need to integrate the information they learned from this past year, not only for holiday shopping," says Kelley. ˜The competition between e-tailers is so intense and they need, frankly, to be able to serve customers the best way that they possibly can if they want to keep customers." There are many lessons still to be learned from this most recent e-holiday, many of them centering on building effective fulfillment and customer service infrastructure. For the online customer-service providers, ensuring better service begins with proactive conversation between buyer and seller. Customer service ˜may or may not be worse than last year," says Wine, ˜but you will definitely hear a lot more complaints about it this year because there are so many more new companies." n

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