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At Their Service

Although money's tight, don't even think about skimping on good online-customer support.

Because customers always demand good customer service online, e-tailers should never abandon their customer service initiatives--even during uncertain economic times. "The economy is affecting IT and people's budgets, and customer service initiatives are often the first to go," says Paula Rosenblum, retail research director at AMR Research in Boston. "But at the same time, companies are very aware of the importance of customer service."

Customers who shop online increasingly expect excellent customer service, according to a recent survey of 2002 holiday season shoppers conducted by AMR. Among customers who purchased gifts online that year (online shoppers, by the way, spend about 25 percent more than their offline counterparts), 20 percent had what they described as a "bad experience" and do not plan to return to those sites.

The study of 457 random Internet users also found that many e-tailers lack the basic practices to maximize customer satisfaction. Many complaints were logged about late or nonexistent service updates; order commitments that were rescinded weeks later because of a lack of inventory; and damage during shipping, caused by insufficient packaging.

Customer service takes on an even more crucial role today, especially since the AMR study found that fewer online customers are looking for a price break through a retailer's Web site. In fact, just 20 percent ranked low price as their reason to make a purchase online. "Since price no longer rules, good customer service is gaining ground with online shoppers," says Rosenblum. "While I'm sure some companies would like to be able to cut back on customer service in the current economy, it's just [not] a good idea to do so." In addition, since it costs much more to acquire a new customer than to keep an old one, it's always a good idea to put your money into customer service, which helps keep customers coming back.

Rosenblum insists that the kinds of customer service tools and initiatives that companies should use do not need to be elaborate. For high-end products, such as furniture or high-tech equipment, CRM tools such as live chat are popular, she says. However, with inexpensive retail products--and even for small e-tailers who sell mostly niche products--customer service simply means having an easy-to-use site.

"If you are selling products like books or CDs, all a customer wants is to be able to find a product easily on your site and make sure that it got delivered by being able to check the status of their order," says Rosenblum. She also says it's important to make sure your customer service phone number is displayed prominently on the Web site and that there's a person on the other end of the line.

Double the Profits
For some e-tailers, when it comes to customer service, only the best will do, regardless of economic conditions. These entrepreneurs realize that a happy customer is a customer who comes back to their Web sites.

Consider Mike Faith, CEO, president and founder of 5-year-old Headsets.com Inc., a San Francisco Internet and catalog company whose sales more than doubled to $7 million in 2002, from about $3 million in 2001. He takes customer service seriously. His 10-person customer service staff--which makes up two-thirds of his entire company--is on duty from 7 a.m. to 4 p.m. PST every day. Customers who call outside that time and leave a message will get a personal callback first thing the next day. "We answer every phone call with a live person, and I listen in on calls an hour a day to make sure the quality is at the level I expect," says Faith, 38. Faith also says that he never monitors how long customer reps are on the phone.

When customers leave an e-mail message, Headsets.com promises to respond in four hours, but the reps usually respond within an hour. Customer service reps are also rewarded based on customer satisfaction. To gauge the level of satisfaction, the company includes with every invoice a customer service survey that asks customers to rate the service they received from reps. Every customer who answers the survey receives $10 off the next order.

Great customer service starts with hiring the right people. Before customer service reps are hired at Headsets.com, they must undergo a four-interview process and pass a series of tests, including emotional profiling and IQ tests. Reps also must partake in a one-hour phone call with a business psychologist. Only about one in 30 people interviewed end up getting hired, says Faith. New employees must also take a two-week training course--and score at least 95 percent on a test at the end of the course--before they take to the phones.

Faith can't say how much his customer service practices cost, but he has no plans to cut back on them, even in this economy. "[Our customer service practices are] a large portion of our value," says Faith. "It's one of the reasons we get so much repeat business and why we're on track to have sales of $15 million by the end of the year."

While you may not have the time or resources to launch an elaborate customer service program comparable to Faith's, you should always put a strong effort into your customer service program. Customers will thank you for it.


Melissa Campanelli is a marketing and technology writer in Brooklyn, New York.

Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the July 2003 print edition of Entrepreneur with the headline: At Their Service.

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