Tuesday, January 24, 2006

On Line Customer Service

In the on line business community there seems to be this feeling of autonomy amongst its business owners when it comes to those who purchase their items or services. You can't see us so why do we need to serve you seems to be the prevailing attitude. In other words you buy at your own risk. Customer service this year was at an all time low.

Talk about creating the all time negative customer experiences. You want to contact someone, send an email, get an auto responder and wait. If you’re lucky you will get a reply, but if your like the rest of humanity your probably still waiting, or if you did get a reply it was far from satisfactory. The Christmas buying binge is over and the overall approval rate by customer of online customer service is down. In fact it was down some 36 points below 30% to be exact. Now that ought to set off a warning light somewhere.

The kind of issues addressed were not a lot different than those of the traditional business. However they were more acute. Most consumers cited the lack of response to help enquiries that dealt with ordering issues or failed order confirmations. You would think that by now with as much as the online community talks about it they would have their order systems functioning correctly. Next, were orders that were delivered to the wrong address or not at all? Again besides the obvious the tracking was incomplete and customer’s ability to reach the companies was terrible. Most complained of either the inability to reach a live person to help resolve problems or the actual company instead of some international or regional call center. Many listed that many companies just wouldn't respond at all to their request.

The next complaint was the inconsistency in the information or instructions that were provided for either the product or the ordering process. Another of the top five was the ability or unwillingness of the online community to address return issues. Apparently a large percentage of online businesses failed to provide return policies and infrastructure for their clients. The last one that I'll mention was the inability to fill orders. Three weeks before Christmas 60% had reported out of stock on major items. Stock levels were at an all time low this year. Can anybody venture a reason as to why or was it just bad planning?

The point is that the online community, including established online businesses, failed to address customer need and to consider the negative response of poor customer support. This has always been an issue with the industry and most of it is do to managements disconnect from the customer with the web as the barrier. The sad thing is that come Christmas next year 80% of the businesses that sold this year won’t be there. I wonder why?

The solution is really quite simple. Use traditional business modeling for you online businesses. This includes customer service policies. Listen to customer feedback and provide early solutions don't ignore your customer. Online spending fell short of its expectations this year for a reason and it appears that in the area of consumer items it will continue to fall below expectations unless something changes. Customers are what drive your businesses and the markets. If you ignore them you do it at your own risk.

Customers remember and the number one reason cited for not buying on line is a previous bad experience. The markets are not unlimited and in fact have huge limitation. How many people do you think in this world have or can qualify for credit cards? Most don’t even make enough money to buy food let alone something over the net. The main market is still the US and Canada with Europe a very distant second. China, Southeast Asia, India, South America, Eastern Europe and Africa are emerging markets not participating markets. Less than 2% of these can purchase on line and even a smaller percent of that will try. If they do, there are the problems of logistics and payment verification, credit card and payment fraud etc to deal with. Take note, over 90% of all internet fraud comes from these emerging economies.

Limited markets mean declining markets when you mistreat your customers.

We invite your comments and suggestions as always.

For more information on Customer Service and the Customer Experience go to
The Customer Development Center.

2 comments:

Maria Palma said...

Tim,
I agree with all your comments. Sometimes I wonder why people go into business in the first place if they're just going to ignore the customer! Go figure...

~Maria Palma

Glenn said...

Businesses will keep more customers and generate more revenue if they learn basic math. Bill and his wife spend $5000 in 3 years at one consumer appliance store. They stop buying there when the manager refuses to take a return because he'll have to take a $165 markdown. How much money will the business lose over five years? How many referrals will the business lose? How many people will Bill and his wife prevent from shopping there because they make a point to tell people about their bad experiences?

Cutting costs is important, but so is generating revenue whether you are bricks and mortar, online, or both.

Go figure...