Keep them happy and coming back for more

Outstanding customer service is more than just a noble goal. These days it will make or break your business. According to eLoyalty, a customer relationship management consulting firm, it costs up.
Written by ZDNet Staff, Contributor

Outstanding customer service is more than just a noble goal. These days it will make or break your business. According to eLoyalty, a customer relationship management consulting firm, it costs up. The personal touch

Ninety percent of online shoppers consider good customer service to be critical when choosing a Web merchant. Forrester adds that 4.8 million people—or 37 percent of those who have made on line purchases—have used customer services while e-shopping. The No. 1 reason shoppers stopped using In ter net merchants? Dissatisfaction with service.

"The basis for successful loyalty relationships is providing a full-service approach," says Wolhandler. "When a sale goes fine, you don't need service; when something goes wrong, it's expected."

Keeping e-shoppers happy involves more than posting a list of frequently asked questions. In addition to the amenities that customers expect on the Web—quick billing and checkout, bulletproof security, prompt delivery, and easy order tracking—businesses are going one step further to keep their customers returning for more.

Shopping online can be a lonely experience, and customers are clamoring for a more human touch. According to a Jupiter Communications/NFO Con sumer survey, 72 percent of online buyers said that customer service is a critical factor in their online shopping satisfaction. However, only 41 percent indicated that they were actually satisfied with the level of service they received. To better the quality of service, Jupiter recommends that companies improve customer response rates, streamline research and navigation, enhance product information, increase product selection, ease the return process, and leverage information about customers.

Show you care

The first attempt at providing large-scale customer service on the Internet was posting a toll-free number. Cus tomers could connect with a person over the phone, but companies soon discovered this method has its drawbacks: Most customers don't take kindly to waiting on hold, and, worse, they usually have to disconnect from the Net to place the call. E-mail customer service soon followed, but this too has its limitations. Customers sometimes wait weeks for an e-mail response—enough to leave them fuming and, in many cases, moving on to do business with your competitors.

But that is changing. Priceline.com, for example, promises replies within one hour, citing technical difficulties as the only exception. Call-back services are also becoming standard. When a button pops up on the screen, the customer can fill out a form requesting a return phone call at a certain time of day. A variation on this theme is following up one kind of service with another - a telephone call with an e-mail message, or vice versa.

While all of these methods work, customers demand more. The next generation of Internet customer service has taken the form of live voice and text chat. Such services allow two-way communication between your service reps and the people they serve. Agents answer questions and address concerns instantly - leading to quicker, and often larger, sales.

Luckily for companies looking to add live service to their sites, there is no shortage of affordable solutions. Jeeves Live, from Ask Jeeves, provides live customer support as a service - that is, it hosts your Internet service solution for you. One of its smartest features is the ability to add the contents of customer chat sessions to a searchable database, saving your agents time and effort when potential buyers ask the same questions. Two other advantages are quick implementation and the ability to add more services as you need them. One Jeeves Live customer, children's educational toy site Right Start, has seen its conversion rate (where browsers become buyers) increase from 10 to 30 percent since adding live service to its site last October. Cost for the solution starts at $100,000, which covers set-up and ongoing service.

LivePerson offers sales and customer service for Web sites via live chat. You pay a one-time setup fee, starting at $1,000 per user and $250 per month for the technology, and you provide the customer service agents. From your patrons' perspective, both LivePerson and Jeeves Live work simply: When they want to talk to an agent, they click on a button on your site to ask their question. Customers stay online throughout the entire chat session, making it easier for them to complete orders, view product information, and add more merchandise to their shopping cart.

FaceTime Communications puts buyers in direct touch with you via America Online's Instant Messenger. FaceTime also lets you conduct exit surveys to find out more about your customers or let them rate the effectiveness of your service. PeopleSupport and WiredEmpire can arm you with software and services to develop your own online marketing campaigns.

Businesses like the Vermont Teddy Bear Company use WiredEmpire's services to find new customers and give them a positive experience so they're more likely to return. The solution has three components: Campaign Agent, Profile Agent, and ReplyAgent. Cam paign Agent sends personalized e-mail based on customers' interests, which are collected through the other components of the software and from offline databases. You can track the results of each campaign instantly through a reporting feature, making it easy to measure success and make necessary changes. Profile Agent lets you learn more about the people who visit your Web site. You can then contact them later, turning browsers into buyers. ReplyAgent automates the process of answering e-mail questions by interpreting each in coming question and automatically generating a reply.

Manage your customers

So what exactly is customer relationship management, or CRM? The idea is to synchronize all of your business processes - including service itself - to enhance the customer experience. It's no wonder that CRM has become a core focus for businesses of all types. AMR Research predicts that the CRM market will grow from $4.4 billion last year to $21 billion in 2003.

Nurturing relationships with customers often means reorganizing processes so the customer comes first. "Confusion characterizes most efforts to create a single view of customers across Internet and real-world channels," says Forrester analyst Frank Prince. "But realizing [CRM on the Internet] will require a clear strategy and multimillion-dollar investments."

Prince isn't exaggerating. It can cost between $250,000 and $3 million to implement a solid CRM system. De spite the expense, however, businesses are finding that not doing it is no longer an option.

Homegrown juice company Nan tucket Nectars sells all-natural juices through 150 distributors, which in turn deal with individual retailers. With a 40 percent growth rate and $70 million in annual revenue, the company was having a hard time keeping up with business. "When customers placed an order for juice, we had no visible inventory," says Drew Farris, Nantucket Nectars' director of information systems. "We couldn't tell when we ran out of stock, and we had customers calling us two days after they were supposed to get an order telling us it hadn't arrived."

Things got so bad that the company forecast the need for a 50 percent in crease in employees just to handle customer-service issues. After doing some research, Nantucket execs settled on Oracle's integrated solution. Then they shelled out $1 million.

The company's goal was to provide top-notch service to every single distributor, and that's what it got. Sales force members are armed with the abil ity to track sales and promotions through the Internet. More important, distributors themselves can log onto customized Web sites to place, track, and adjust orders. By consolidating data throughout the company, from inventory to sales, Nantucket avoids running out of hot items and sending partial shipments - lowering frustration levels of customers everywhere.

"If we are out of orange-mango, we can easily see if they want us to substitute peach-orange," says Farris. "That makes for incredibly happy customers. We get distributors online so they can place orders on the Web, and check the status of orders and marketing collateral. All of this says to our customers that they matter."

Choose the best solution

CRM systems offer a somewhat jumbled array of solutions and services that fall into several categories, including personalization, sales, support, call centers, customer service, human resources systems, content management, finance systems, telephony, and enterprise resource planning. However, no one business does it all - yet.

Trying to choose the best solution for your business can be a mind-boggling experience, and a big waste of money if you throw down cash for software only to find that it's not right for you. Larger companies have already begun to outsource their entire customer management systems. Service providers like IBM and Kana Communications step in so client companies can concentrate on their core business. Wing spanBank.com, an Internet bank, offers 24-hour customer service powered by IBM. Big Blue also helped the Canadian Intellectual Property Office process patent applications faster and made it easier to find patent information. Kana helps companies like Office Depot with personalized customer service by integrating and tracking buyers' account information from all fronts - the store, the Web, or the phone.

If your company provides services rather than products, finding out exactly what it takes to keep your customers coming back is slightly trickier. This is mostly because you are not tracking single purchases but rather how many times people have selected your services - car repair, beauty treatments, medical advice, and so on.

Editorial standards