No. 7515

Using the Internet to Improve Customer Service

The Internet has transitioned, over the past decade, from a fledgling, marginally useful communications tool (some thought “toy”) to a proven and thriving resource for doing business and managing consumer relations. This article describes how companies can use Internet technology to improve commerce and customer satisfaction by giving buyers and prospects better, faster access to product and service information and opportunities and by responding quickly to inquiries and concerns.

T A B L E O F C O N T E N T S
Advantages of Internet Technology The Online Store - Creativity and Communication Put Customer Care Online . . . But Keep the Phones Empowering the Customer Self-Serve Market Anatomy of a Jellyfish	Prospects for the Future Industry Associations Industry Events Industry Publications Books Find a Supplier Related SMN Articles

ADVANTAGES OF INTERNET TECHNOLOGY

"It used to be unique. Then it was a competitive edge. Today, offering the very best online customer service is a matter of survival." – Jim Sterne in his book Customer Service on the Internet: Building Relationships, Increasing Loyalty, and Staying Competitive.

Almost every person with a computer is using the Internet to buy and sell products and to find information about anything that comes to mind. If a concept or product is mentioned in casual social conversation or in a newspaper article, or if the urge to acquire a new whatever strikes late at night, a wealth of additional information is just a few clicks away. A couple more clicks provide the opportunity to buy something . . . and to reveal something.

As one result, the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) reports, Internet advertising revenues reached a new record of $3.9 billion for the first quarter of 2006, a 38 percent increase over Q1 2005 at $2.8 billion and a 6 percent increase over the Q4 2005 total of $3.6 billion.

Analysis of the findings attributed the growth to marketers' continued belief in the opportunities and effectiveness of the electronic medium in reaching and engaging their customers."Consumer habits are continuing to change and mature," said a PwC spokesperson. "Companies are effectively learning to devote more of their advertising budget to this fast-growing advertising platform in order to reach the right audience at the right time."

To have even a chance of being a contender in such a competitive marketspace, nearly every business of any size now has some level of Internet presence, whether it’s just a listing on an industry or city classifieds site, simple information and promotion on a shell site, or actual in-the-moment e-commerce. So the challenge to any company, once it has overcome technical, financial and promotional hurdles to developing an online business, quickly becomes the core issue of providing quality and cost-effective customer service 24 hours a day, seven days a week, 365 days a year . . . and expanding its slice of the competitive market by using information to provide more/better goods and services.

Web-based customer service not only saves time and money, but - by involving the customer in the process - often leads to a two-way trust relationship and greater customer satisfaction. A user's visit to a Web site can provide access to extensive database information while simultaneously populating that database, thus enabling companies to learn more about their customers and their needs and wants. Users' preferences for future purchases can be captured just by tracking where they go on a site, what they buy, where they live and work, where their children go to school, what they feed their pets. Ultimately, this information can be used automatically to develop and enhance a profile of the customer.

At the same time, of course, concerns about privacy and identity theft have multiplied right along with e-retailing and the attendant sharing of personal and financial information. Most companies require users to register before gaining access to their Web site, even before an intention to purchase is indicated. IF the registration process is straightforward and relatively easy, AND they feel reasonably assured of security and privacy, AND they believe it will add value to their ongoing relationship with the online enterprise, consumers will undergo the registration process. If those criteria are not met, registration becomes a hassle that most users will avoid by leaving the site and very likely moving on to another.

THE ONLINE STORE - CREATIVITY AND COMMUNICATION

Jason OConnor, owner of Boston-based Web design firm Oak Web Works, offers companies 10 straightforward tips for creating a Web site sure to generate sales:

1. State your goals.

2. Identify your audience.

3. Write sales-focused copy.

4. Include calls to action.

5. Learn from brick-and-mortar retailers – show visitors where to go.

6. Don’t distract visitors.

7. Include compelling images.

8. Offer more than just a sales pitch.

9. Constantly build trust.

10. Nurture your existing customers.

A significant aspect of business-to-consumer communication and customer satisfaction in online retailing is the e-mail connection. Whether a business is selling one product or hundreds, there are customizable e-commerce packages available to provide the full range of automated customer communications. A company can promote its products, build a relationship with existing customers, and attract new customers by adding an online store to its website.

One provider of such packages is Florida-based Website Pros, whose services include developing the site and building the complete array of product information and purchasing capabilities, either in the company’s already-branded look and feel, or with a completely new appearance. Among Website Pros’ customer service offerings:

Merchant accounts: Creation of online merchant accounts, supporting a variety of credit cards, which are set up with a financial institution supporting the required e-commerce software.

Credit card payments: The business' e-commerce store is connected to its bank and processing center, and all of its credit card transactions are deposited directly into the bank account. Because Website Pros' e-commerce store system provides online security, customers don’t have to worry about their transactions on the Web.

Accepting orders: A business has the option of receiving an order via e-mail or reviewing orders through a secure area on the Web site. Automated e-mail responses to customers' orders are part of the package.

Other package features that are becoming essentials in competitive e-retailing include:

Customized tax and shipping at the product level.
Real-time credit card payment processing, plus PayPal, WorldPay, store card, checks, and money orders.
Integration with eBay.com and eBay Stores listing formats.
SSL-enabled security ensuring order protection. (SSL is short for Secure Sockets Layer, a protocol for transmitting private documents via the Internet. Many Web sites use SSL to obtain confidential user information, such as credit card numbers.)
Automated order confirmation e-mails for both shopper and merchant.
Automated e-mail look-up of lost passwords.

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PUT CUSTOMER CARE ONLINE . . . BUT KEEP THE PHONES

It is mandatory, therefore, that companies doing business online acquire e-commerce software that ensures speed, ease and privacy for users and then back it up with reliable and effective human contact - i.e. a cadre of trained, well-spoken, well-mannered, knowledgeable customer service representatives readily accessible by e-mail and telephone.

Nearly every online purchaser or browser is familiar with the shopping cart concept. E-commerce web developers consider four specific criteria to be essential when a business owner is considering implementing an e-commerce shopping cart application to deliver real value for its customers and for the company:

Easy to administer: Nine percent of all e-commerce shopping carts are "clunky" and hard to administer. The more features a shopping cart contains, the more links it requires and the harder and more confusing it can be to use. Businesses should insist on a shopping cart with pages that are easy to figure out and easy to use.

Fully customizable: Turning a shopping cart feature on or off or changing its background color is not customization! In 99 percent of e-commerce shopping carts, businesses can't add any new features and can't modify any existing ones - but they should be able to do just that. A cart that is fully customizable and scalable is mandatory for viability.

Seamless integration: A shopping cart will not match a company’s Web site design if the only thing that can be changed is a small header at the top and a small footer at the bottom while the rest of the page remains untouchable. But if a company can control the entire page, the shopping cart becomes its own design.

Free customer support: FAQ, e-mail or message boards should never be passed off as customer service. What if a customer's question isn't in there? What if a prospect's e-mail goes to someone who doesn't speak English? How long will a potential purchaser wait for an answer on a message board? Why shouldn't shoppers be able to call? Why shouldn't they be able to get answers over the phone, for free?

J.D. Power and Associates discovered in its 2005 Wireless Customer Care Performance Study that customer service issues handled by a service representative - either over the phone or at a retail store - generate significantly higher customer care ratings than non-human, computer-generated interaction. Overall, customers who speak with a service representative over the phone average an index score of 109, well above the industry average score of 100. At the retail store level, the index score decreases to 102. But those customers contacting their carrier with a problem or inquiring through an automated response system (ARS) rate their experiences significantly lower, with an index score of 85. The index score drops even further (75) for those contacts made over the Internet.

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EMPOWERING THE CUSTOMER

Customer satisfaction with e-retailers slipped to 80 on a scale of 100, according to the 2005 American Customer Satisfaction Index (ACSI), down from 84 in 2004 and 83 in 2003. Leaders Amazon and eBay both fell 4 points from 2004 to 2005 - Amazon from 88, one of the highest scores ever in ACSI's 10-year history, to 84; eBay from 84 to 80.

Some of the criteria of effective online information-gathering or shopping, as cited by users:

§ I want a site that moves fast, fast, fast!

§ I like a customized experience so I can drill down quickly to exactly what I want.

§ I like push, not pull, so the information that is right for ME comes to me automatically.

§ I like anonymity in my experience - don’t act like you know me and want to be friends.

§ Just a couple of clicks, that’s all I ask.

§ Tell me all there is to know about a product - don’t make me guess if I should take the risk.

§ Customer service people need to know what they're talking about and assume I know what I'm talking about.

Among the negatives mentioned by dissatisfied users, when bad Web sites fail to consider site visitors’ experiences in basic ways:

§ Finding what I want is just too complicated.

§ There are too many clicks involved.

§ I turn away from those long, grey blocks of text.

§ Often, following the instructions doesn’t bring the results I expect, or was led to expect by advertising.

§ Inconsistent navigation.

§ Inconsistent look and feel.

§ There aren’t any obvious ways to contact the company.

§ The content is the exact same every time I visit the site.

§ I want everything to be automated - I don’t want to talk to anybody.

§ I want my online experience to be customized to my needs, not generic.

§ I want pull, not push – don’t show or send me a bunch of stuff not related to what I want.

§ Keywords often aren't refined enough to get me where I need/want to go.

§ Get rid of all the silly Flash animation.

§ Too much scrolling.

§ Why isn’t it about me, instead of them?

Of course, online retail shopping isn’t the only use of the Internet by consumers. Some customer self-service membership and information applications include:

WebMD - customized medical information and discussion boards.
Netflix - online video DVD "membership" with customized push-pull via the member's queue.
Peapod - ordering groceries and supplies online for home or office delivery.
Individual professional websites - i.e., pediatricians, law firms, fitness trainers, life coaches.
City government - parks and recreation information/registration, trash pickup, etc.
News organizations - fast-paced, customized breaking news by topic, rather than relying solely on once-a-day handheld newspapers or TV broadcasts.
Business services - heres what you need to know to order window blinds from us, publish your book with us, deliver your baby in our hospital, apply to our mortgage loan program.
Fandango - movie details, theater times, and purchase of tickets.
Utilities, credit card companies, banks - self-service, autopay, incremental payment schedules.
FedEx, DHL and other carriers - tracking your delivery right up to the moment it’s approaching your door.

SELF-SERVE MARKET

An emergent indicator of customer empowerment and satisfaction with Internet commerce is the use of online local, directory and classified advertising, even as the electronic versions threaten the viability of the time-honored classified print medium . . . local newspapers. Another 2006 study by IAB, this one in conjunction with comScore Networks, Inc., revealed a positive return on investment and significant conversions both online and offline for companies participating in online local, directory and classified advertising. The research, which also showed these advertising vehicles have a considerable impact on brand image, studied the sales and brand outcomes of text-based listings for categories including: automotive, careers, construction and contractors, financial services, hospitality, professional services, real estate and retail.

Millions of consumers turn to the Internet each month for help in finding a new job or a new car, or to research any number of local services, said a comScore spokesperson, adding that it is abundantly clear that small and large advertisers have a compelling opportunity to leverage the Internet as a powerful medium driving business for local services.

Among the newer entries in this self-serve market is SimplyHired.com, whose website claims the company is "building the largest online database of jobs on the planet." SimplyHired culls up-to-the-minute employment postings from an array of job boards, classifieds listings and company sites, including CareerBuilder, Monster, Craigslist, and a host of professional and niche sites. On any given day, there are more than 5 million available jobs posted on SimplyHired.

Even better, the site leverages the growing trend of offering niche searches, with dog-friendly companies being a recent addition, boasting that "we'll make it possible for you to see every opportunity out there. If your cousin is looking for a part-time job working the evening shift at a pickle factory 300 miles west of Texas, we'll help you locate that one-in-a-million job waiting for her in Albuquerque. Our tools will turn everyone into an expert at finding the needle in their own personal haystack."

Along with casual, user-friendly language and community forums (there’s a SimplyFired forum that gets a lot of traffic), the site features a feedback function putting users in almost-immediate e-mail contact with a customer service rep. In exchange for the opportunity to hear your suggestion or answer your question, SimplyHired will send you a logo T-shirt!

All of this communication and creativity provides a sense of belonging and helps build the trust bond with customers, enhancing their level of satisfaction, keeping them coming back to the Web site, and giving them a reason to recommend SimplyHired to friends.

ANATOMY OF A JELLYFISH

Web-based companies continue to proliferate at a rapid rate, with those presenting refreshing opportunities for the customer to be in the driver’s seat presaging a new era in electronic commerce.

An example is Jellyfish.com, a consumer-focused shopping site launched in mid-2006. Dubbed "the Internet’s first buying engine . . . a marketplace like eBay in reverse" (but without the consumer bidding) by Jellyfish founders Brian Wiegand and Mark McGuire, it’s a search engine not for finding information, but rather for finding something to buy. And there’s a value-add: Jellyfish shares its revenues with the customer.

Using Jellyfish.com just as with any other shopping search engine to find the desired product at the best price, the consumer gets at least half of what Jellyfish earns by connecting to the store via Jellyfish. At launch, merchants already were lining up to bid for shoppers' attention with low prices and high cash-back payments. Jellyfish went live with more than 1,000 advertisers signed up and more than 5 million products listed.

"ShoeMall.com is all about making shoe shopping fun and fast," said a new-business spokesperson for Internet retailer ShoeMall, “and using a partner like Jellyfish helps us give back to the customers."

Jellyfish affiliate businesses include Petco, Barnes&Noble, Gap, Best Buy, Paragon Sports, Dell, Sears and Samsonite.

The company plans to give the customer half the ad revenue it collects from the advertiser upon making a sale. The result is that Jellyfish users can get products for less because half the marketing dollars spent by advertisers go directly to their customers instead of to a third party. The price reduction rises and falls daily as merchants bid for consumers' business.

Simplicity, transparency and customer power – that’s the Jellyfish promise. Wiegand and McGuire say that instead of annoying and overwhelming users with advertising, their site allows stores to use their advertising dollars to lower the end price, as much as 24 percent over other consumer sites. The name Jellyfish reflects the company's intent to bring transparency to the ad market. "You may not know it yet," say Wiegand and McGuire, "but you are now in control. Companies in this new world will have to provide you with a maximum return on the value of your attention or they will die."

Industry and Wall Street analysts agree, predicting the arrival of Jellyfish will make things more challenging for the likes of Amazon and even Google, whose "bubble may be about to burst," said InformationWeek writer Thomas Claburn. Jellyfish offers an alternative to cost-per-click (CPC) advertising by opening an online marketplace for advertisers to bid directly to customers for their attention and patronage. Google's recent acknowledgement that it's testing cost-per-action (CPA) ads suggests "it's aware of the problems posed by the CPC model," Claburn said.

One Jellyfish beta user, wishing to order a beach carry-all from L.L. Bean and discovering Jellyfish didn’t offer L.L. Bean as a vendor, compromised with a swimsuit from Eddie Bauer. She paid $88 for the swimsuit and received $3.86 cash back toward her next Jellyfish purchase. A veteran of online shopping, she had a few suggestions for Jellyfish’s customer satisfaction endeavors:

1. The selection of vendor partners, though extensive, doesn’t yet cover all the possibilities the browsing shopper might like to see.

2. If a user is enrolled in another site’s customer rewards program (such as Upromise, a savings network through which parents can save for their children’s college fund), there is no way to funnel the earned points to that existing program.

3. The selection process can feel overwhelming to the user, with few of the search refinements that are employed by other shopping sites, such as Amazon.

4. A shopper is forced to make separate transactions for each purchase, even when all are carried out on the same site visit, because the transactions are done through the vendor partners, not through Jellyfish itself.

PROSPECTS FOR THE FUTURE

While business websites today are easily reachable via desktop and laptop computer, accessibility by mobile, handheld devices is limited. Wireless palm Treo and Motorola Q Smartphones are among the few handhelds allowing for access and transactions with commercial sites, although the "keyboard" and small-screen limitations make such transactions prohibitive. Likewise, cell phones - even those with instant messaging, music and video capabilities - aren’t made for Internet shopping. Within the next five years, however, industry experts predict the proliferation of wireless handhelds with keypads and screens adapted for online commerce, which will revolutionize the practice once again. Consumers truly will have anytime-anywhere access to online shopping, and customer service practices will have to adjust accordingly.

E-commerce has emerged as the fastest growing sector of the U.S. marketplace. Despite the contraction in the high-tech industry during the end of the last century and the initial period of this one, firms have continued to enter and expand their presence in e-commerce, and consumers have exponentially increased the number of purchases made online. E-retailing currently represents a very small share of overall commerce, but it is expected to continue to expand rapidly in coming years. As e-commerce grows, so will its impact on the overall economy.

The primary way by which online commerce will affect the economy at large is through its impact on productivity and inflation. Businesses and consumers using e-commerce benefit from a reduction in costs of time and effort required to search for goods and services and to complete transactions. The resulting reduction in costs results in higher productivity. An even larger increase in economy-wide productivity levels may result from productivity gains by firms not currently engaged in e-commerce as they eventually respond to this new source of competition. Continued expansion of e-commerce may also

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