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Friday | 5 December, 2008
CIO
The Customer (Service) Is Always Right
Joshua Hallford (Computerworld) 20 September, 2000 12:01:01

After largely being ignored in the initial hype of e-commerce, top-notch customer service has become the second-most important determinant in choosing one online retailer over another, a new study has found.

Because high expectations of customer service have not waned as more consumers embrace online shopping, improving site navigation, easing the return process and making live customer service readily available have become mission-critical goals for e-retailers struggling to establish repeat shoppers and achieve profitability.

According to the study, 39 percent of respondents said cost is the most important component in choosing an e-retailer, while 32 percent listed customer service.

The inability to tell the quality of merchandise offered online topped the list of complaints by 65 percent of the 3,500 online shoppers who responded to a Yankee Group Inc. survey in August. Fifty-two percent of those shoppers said returning items bought online was too difficult, and the same percentage of shoppers were still skittish about releasing their credit card numbers over the Internet.

Poor site design and navigation difficulties troubled 35 percent of the respondents, 29 percent complained that no one was home to receive deliveries, 28 percent wanted to speak with a customer service representative when placing an order, and 24 percent ultimately were deterred from shopping online because of slow Net connections.

Vulnerable to being sidelined by poor customer service, online retailers should adopt the mantra that a happy customer is a loyal customer, says Rebecca Nidositko, a senior analyst at the Yankee Group.

Only 7 percent of online consumers usually purchase online, while 80 percent research and gather information online and sometimes make purchases. Thirteen percent research but never buy online. Yankee estimates that well-thought-out customer service is a key ingredient in the recipe for persuading an online shopper who might be on the fence to become a regular buyer.

Online retailers can best answer Wall Street's demand for profitability by proving that they are on a path toward increasing their percentage of sales to repeat customers, thereby building a base of lifetime customers whose purchases far exceed the expenditures required to acquire those customers.

Pulling off excellent customer service is a great way to secure that base. But beware: The customers who make up that base generally will tell four people about a good online shopping experience but will tell 11 people about a bad one, according to Yankee's study.

In addition, Yankee found that online retailers must demonstrate an understanding of customers' needs and build customer-centric shopping experiences. When Amazon.com Inc. began mulling a redesign of its navigation bar, it solicited advice from its customers as to how it could better organize the 16 different tabs or stores on its site. Another example is Garden.com Inc., which has engaged in the vital customer-centric strategy of personalizing a shopper's visit to its site.

Easy access to customer service representatives may be more important for online retailers selling high-end items, such as jewelry, that can differentiate themselves from their competitors. Land's End received kudos from Yankee by providing a callback service whereby a company representative would call online customers on the phone to answer questions or talk them through navigating its site.

BestBuy.com is another e-retailer that has done an exemplary job of being where its customers wanted it to be, by allowing items bought online to be picked up and returned to its offline stores. It also is working toward having in-store kiosks, which can help convert a consumer who is comfortable only researching online to actually become an online buyer. The company also is improving its online help desk so that customers can track the status of repairs.

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