±±¾©Èü³µpk10

If you've tried to buy things on the web, then frustration and anger are probably familiar emotions. You have one final question before you click on the "Buy" button at hipclothingnow.com, or some such place. What's the site's return policy should that sweater not fit you? You start searching for a phone number. Nothing on the home page. The "Contact Us" button simply pops up an email window. And the "About Us" section merely tells you that the site is "the solution to all your clothes-shopping needs on the web". It might be. But so far it hasn't won many points for convenience.

Finally, you settle for email, even though you know it will take longer.

And then the waiting starts. By the end of the day, you're starting to get annoyed. By the end of the week, you've forgotten all about the sweater.

And then you get an email that says: "Our returns policy is detailed in the FAQ (frequently asked questions) section on our web site." But you'd already looked at that and all it mentioned was the return of damaged goods, not clothing that simply didn't fit.

You conclude that hipclothingnow.com is just a little too hip for its own good. Despite quite a nice web site and some really cool advertising that lured you there in the first place, it failed at the final hurdle.

Looks like those advertising bucks were wasted. You'll never be their customer now.

Many online shopkeepers, in the heat of fulfilling record orders, might not notice that the chances of turning the red ink on the bottom line to black just receded a little further. But some are catching on to the importance of customer service, especially as attention starts to shift from customer acquisition to customer retention. It's a vital part of winning over online newcomers who are still nervous about buying on the web. And the less familiar the business you're in, the more important it becomes.

The founders of Mercata.com already knew that when they opened their site last May. They were going to have to work hard to win over customers.

The company was trying to introduce a new shopping model through which consumers band together to drive down the price of products - from DVD players to vacuum cleaners to wine glasses - through the power of bulk buying.

"We're really presenting a revolutionary way to buy something," says Randy Norgi, marketing vice president. "It's not an auction and it's not standard online retailing. Because PowerBuys (Mercata's group-purchasing system) was brand new, we knew that a lot of our customers were going to need a lot of coaching."

Mercata decided to meet this challenge head-on by emphasizing what was, until recently, a neglected aspect of many e-commerce interactions: full and rich customer service that gives consumers real-time access to agents whenever they want and through whatever method they choose. The company started off with email and a toll-free 1-800-number, and is in the process of adding live text chat with service representatives through the eContact Suite from Quintus.

"I think a lot of e-commerce companies face the same issues, Norgi says.

"Because they exist chiefly in the online world, it's important to establish credibility with customers. Part of that is the quality of your merchandise and of your offering, but a bigger part is the quality of your customer service."

Call it a return to business basics or a small win for mankind in the face of ever-widening automation, but there's a quiet revolution going on in the e-commerce world as sites scramble to bring back the very thing web-based commerce was supposed to replace - the human touch.

While there's no doubt e-commerce is the wave of the future, buried beneath all the hype are some disturbing statistics. Buy-to-browse ratios remain in the low single-digits for the vast majority of sites. Forrester Research recently concluded that more than two out of every three virtual shopping carts are abandoned before the sale is completed. Another study, by Jupiter Communications, found that 40 percent of sites failed to provide email addresses to write for help, never answered service calls or failed to respond within five days.

Add the mounting anecdotal evidence from frustrated first-time e-shoppers that the experience isn't all it's touted to be, and it's apparent that customers want more than convenience, cut-rate prices and vast selections.

They also want someone to look after them as they venture into this brave new shopping world.

"There was an attitude in the early days of e-commerce where they didn't want to talk to the customer," says Damon Oldcorn, CEO of PhoneMe, one of a growing list of companies offering real-time human interaction over the internet. "The whole idea of e-commerce was to reduce the cost of sales by making it a self-service operation.

But it's become clear to many of them over the past couple of years that if they're not talking to their customers more closely, then their competitors are going to do it for them."

"There's a dawning of a new age where people have begun to realize that 'Nothing but Net' is interesting, but irrelevant," adds Vytas Kisielius, president of the US subsidiary of UK-based RealCall. The company offers telephone call-back software that appears as a button on the merchant's web site: when the user clicks it and enters a phone number, RealCall forwards the details to the merchant's call center.

Many online retailers, especially those who poured millions into marketing to drive consumers to their sites, are now discovering one of the basic tenets of the internet - the more traffic you lure to your site, the more problems, technical and otherwise, you are likely to have. And how you deal with these problems will ultimately determine your customer retention rate, as well as the word of mouth about your site.

"Customer service will make or break e-commerce companies, especially in high-touch categories such as apparel, and researched categories like electronics," says Evie Dykema, an analyst for Forrester Research.

It has taken a while for this lesson to sink in. E-commerce sites have been up and running for at least five years, and real-time, real-person customer service technologies have been available for the last two or three. But it wasn't until after the 1998 holiday season that online retailers began to realize that having an attractive site and reliable billing and fulfillment weren't enough.

"Everyone realized back then that customer service was crucial to their space," says Lou Wasserman, marketing vice president of Liveperson. "That was the first wave and everybody ran to put in more sophisticated email.

But the problem was that email is an asynchronous channel. People weren't getting responses for a few hours at best and, at worst, several days or never."

Now a small but growing number of sites are augmenting email customer service through live chat, phone call-back services and, in some cases, both. "A year ago this stuff was on the periphery," says Robert Weinberger, director of marketing at Cisco's Applications Technology Group. "Companies were concentrating on the basics of e-commerce, saying 'we'll worry about that later.' Well, it is later and this new wave of e-commerce functionality has become central and all of a sudden very important."

Ironically, this realization seems to have hit both the pure internet companies and the growing number of traditional retailers venturing online at about the same time.

"We like to say there's the dot-com side and also the dot-bam (brick and mortar) side," says Quintus marketing vice president Lawrence Byrd.

"The dot-com sites start with a web initiative, then discover that maybe they need customer service. And then they realize that people will want to talk to them at some point.

"The brick and mortars come from completely the other direction," Byrd adds. "They have already invested a lot in their traditional call centers. Then these centers suddenly discover they have a web site when customers start calling and saying, 'I've got a question about my web transaction.' If you've not trained your call center staff, you're not getting any benefit. In fact you're getting tremendous negative customer reaction."

The good news for e-commerce sites is that in the past few years more than two dozen companies have sprung up offering to add the human touch to your web interactions. The services range from simple icons on web sites that, when clicked, trigger a phone call from a customer service representative, to full-service solutions that offer a combination of live chat, email, telephone call-back and even internet telephony, all integrated into your existing sales and service infrastructure. Not only do these services provide a better way to handle customer service questions and complaints, but they are also prime vehicles for pitching additional sales to an already interested consumer.

"Where we see the real value in the Quintus product is in our ability to close more sales," says Terry Miller, Mercata's vice president for customer acquisition and retention. "It's no secret that in the online world a lot of folks abandon before they complete the deal. And we feel that by solving customer problems while they're in that process we will improve our close."

Some companies, such as RealCall, have built their business models around the promise to deliver the customer to the right sales agent at exactly the moment they're ready to buy. "We're not so much a customer service as we are a customer capture system," says CEO Eric Van der Kleij. "We charge every time the user clicks the button and connects successfully to the vendor. We don't charge for phone calls, we charge for each customer."

RealCall's future will depend entirely on its ability to fulfill that promise over and over again. The company offers its software to clients for free and charges only 50 cents each time it connects a consumer to a vendor, regardless of whether it leads to a sale.

While there are numerous companies and a variety of business models to choose from, e-commerce sites looking for real-time human interaction with online customers currently have two choices: text chat or icons that trigger live telephone calls. Several services, including Cisco WebLine's Customer Interaction Suite and eTetra's iConnect, can provide both.

Of the two, telephone call-back offers generally lower up-front software costs and easier installation. E-commerce sites can be enabled with a call-back button with surprising speed. PhoneMe's Oldcorn claims a UK utility company was able to install an icon on its site in just one minute and seven seconds. Once installed, a single consumer click notifies the site's customer service center to call the customer back within two minutes, or whenever the customer notifies them it's convenient.

Call-back's main selling point is its simplicity. This is especially good for e-commerce novices who tend to be intimidated by technology in the first place and reluctant to solve a problem related to a web page by activating another online application. "We're dealing with the internet for the 'inter-not-yets' in many cases," observes Van der Kleij. "They're gently easing into it but they still want familiar touches, such as a human voice."

It's was this that first attracted ebank.com chairman Richard Parlontieri to RealCall's service. "Even though our customers are a little more internet proficient than the average consumer, and even if they know how to navigate the web and have borrowed money before, we believe they will want to talk to someone when they have a problem or a question," he says.

Surprisingly, what most would consider the main obstacle to using the phone to answer questions related to a web site - the single phone line into the home - hasn't emerged as a major issue. This is due in part to the fact that as Americans spend more and more time in the workplace, an increasing amount of their online interactions are taking place from the office. But there has also been a rapid increase in the number of multiple phone line homes. A recent Forrester study found that over 37 percent of US homes now have two lines or more. In addition, the rapid rise of cellular phones for both business and personal use and the slow but steady ramp of broadband services, such as high-speed DSL connections and cable modems, make simultaneous phone and internet use more prevalent.

"A year ago I would have agreed that it could be a problem," says Cisco's Weinberger. "That's one of the reasons we initially focused on business-to-business solutions. But right now it seems like more of a red herring."

Chat, on the other hand, has the advantage of having no phone line limitations.

It also gives customer service agents a presence on the web page while the customer is still there. Chat advocates also tout its efficiency, since in theory customer service or sales agents can handle more than one chat session at a time using personalized, pre-written answers to frequently asked questions. "Chatting is like going to a library and asking the librarian for help," says Quintus's Byrd. "He or she can point you in the right direction and then assist others while you're off looking."

But others question whether a representative handling multiple consumers at once can really offer top-notch service. "The biggest problem is that some web vendors expect too much out of it," says Cormac Foster, an analyst for Jupiter Communications. "They expect it to be their primary customer service vehicle, but while it's very good at some things it's not so good at others."

There's no doubt that text-chat technology can be relatively cost-efficient.

LivePerson, for example, charges an initial $500 setup fee plus $250 per month for each LivePerson-enabled service representative at the client's customer care center.

But, as advocates of pure phone services point out, the consumer has to be a very proficient typist or else the chat process can drag on. "The lag time is such that even though you're connected to a person in real time, it doesn't feel like it," Foster says, "because they're taking a minute and a half to get back to you with simple requests like 'What's your address?'" The use of canned responses available to the service representative at the click of a button can help. But that also reduces the very sense of human interaction such services were installed to promote.

So what do consumers want right now? Clothing giant Land's End offers visitors to its site the choice of either chat or phone services through Cisco WebLine Customer Interaction Suite. "Currently more people are choosing the chat option," says Lands End research specialist Jeremy Hauser.

Hauser adds that a pleasant surprise for the company has been the fact that most of the questions have been product-related rather than tied to any technical or transaction obstacles. "I think that part of the reason you're still seeing carts abandoned at a lot of sites is that, even if you're familiar with the brand, you'll always have that one last-minute, shadow-of-a-doubt question, because the product is not right in front of you," he says. "So you want to know, 'Is the product going to be in stock? How quickly do you ship? Do you ship to a PO box? What are the care instructions?' Or else you get questions like, 'I'm buying this dress shirt, do you know any ties that would go along with it?'"

And the technical questions that do arise often aren't that complex.

Frequently, consumers simply don't understand a portion of an online form, according to Robert Anastasi, vice president of sales and marketing for eTetra.

It's not that we're a nation of people unable to follow simple instructions.

It's just that automated form technologies routinely reject applications without identifying where the problem lies. A consumer's credit card can come back invalid if there's even the tiniest error in filling out the address form, without the consumer ever knowing why. "For a retailer, it's painful to end up stuck after they've got a person 99.9 percent there," Weinberger says.

The questions do become more complex, however, once you get beyond simple e-tailing into more complicated businesses such as financial services.

It's no coincidence that brokerage houses, mortgage companies and banks were among the earliest users of these new forms of customer service and remain among their most enthusiastic advocates.

"We ask for a lot of detail, because in many cases you're talking about $300,000 loans," says Lee Furnival, e-business manager for online mortgage firm DiTech, which uses the LivePerson chat technology. "We get a lot of questions because the form is long and technical. Our thinking is that if we can answer them while you're in the middle of filling it out, there's a higher propensity for you to finish and submit, rather than get frustrated and leave."

Despite the differing approaches, virtually all the companies agree that the future will bring a new way to communicate with consumers: real-time voice interactions online, aka voice-over IP. Many companies have successfully tested the technology already and are simply waiting for the marketplace to catch up.

That will require many changes at the consumer level, including higher bandwidth into homes, and the adoption of microphone-equipped multimedia PCs. But it will also need a great deal of education so that the mass market regards internet telephony in the same way it now looks at traditional telephone service.

"We think it has to become a lot simpler," says Quintus' Byrd. "Right now you need all sorts of downloads for your PC, and some new hardware. But it will appear in some new markets soon."

In the interim, Jupiter's Foster suggests sites could best serve their customers, and their bottom line, by offering a variety of channels through which customers can ask questions or register complaints. "If someone has a question that really isn't that pressing you can push them toward a cheaper channel like email," he says. "You really don't want someone calling you up just to suggest you change the color of your web site. It becomes a process of segmenting those users properly."

The important thing to remember is that none of these customer service technology solutions is an answer in itself. Indeed, all of them have their flaws: email can be too slow; phone calls too costly and too dependent on dual-phone line homes; and chat too impersonal. But e-commerce companies are realizing that they need something that enables them to connect with consumers and that they require qualified customer representatives to make those consumers feel like someone cares about their online experience.

"At some point everybody is going to encounter some kind of performance problem. Something's going to go wrong with the server or too many people will come to your site," Foster says. "And you have to be able to deal with that and assure people that you're in this with them and that you're taking care of them. The window of opportunity you have for doing that, for winning them back, is actually very small. That, combined with the realization that you can't always compete on price, is really starting to wake people up that customer service is important."

CASE STUDY - Shopnow.com lets text chat take the strain

Shopnow.com came out of the 1998 holiday shopping season knowing it had to make some changes in its customer service operation. It wasn't that the company was unhappy with how it was dealing with consumers. It's just that it was all being done in-house.

"We did it all a year ago, and we did a bang-up job," says Mark Miller, Shopnow's operations manager. "But that's not what were about. It's not our core competency." The company, which began in 1994 focusing on educational and video services, has gradually evolved into not only an e-commerce site, but also an e-commerce enabler that provides the technological support to help small retailers sell products online.

Once Shopnow decided it could no longer handle customer service internally, the company first outsourced its customer service and then turned to New York-based LivePerson to add real-time text chat to its site, initially for merchants and later on for online customers.

Thus far the results have been impressive. "I would say well over 85 percent are totally enamored with the process," Miller says. "Most people only have one phone and so they have to interrupt their internet connection, call a toll-free number and then maybe risk being put on hold by an agent.

And if their problem was trying to check out, they then have to finish the call, log back on and finish the transaction. So our customers who are familiar with the technology and have seen it elsewhere love it."

The type of questions that consumers ask tends to vary with the season.

"During the holidays they all tend to be more core customer service," Miller says. "It's 'Is it going to ship or has it already shipped?' But one of the things we've promoted heavily is that we can help you find the perfect gift, so we've been getting a lot more inquiries regarding products as well."

Shopnow is already working with Liveperson to add internet telephony early this year. While conceding that voice-over IP may be a bit ahead of the curve for the mass market, Miller stresses it's never too early to begin readying for the next technological trend. "Our merchants are certainly ready for it," he says, adding, "Six months ago, I never would have been able to anticipate the number of people using live internet chat."

CASE STUDY - ebank.com keeps service cozy with call-back

While banking was one of the earliest industries to embrace automation, it hasn't completely eliminated the need for one-to-one human interaction.

ebank.com soon realized this when it started an online site 18 months ago. ebank.com is a twist on the "clicks and mortar" model. In addition to its web site, the Atlanta-based company has a physical branch in its home city and plans to open three others in the Southeast.

ebank looked at the customer service technologies of other companies in its sector before deciding on RealCall's phone call-back method. "Barclay's Bank in London had a great experience with RealCall. That created a comfort factor for us," says chairman and CEO Richard Parlontieri.

Unlike other lenders, ebank does not offer complex forms online. "Even with commercial loan applications , our forms are very concise and precise," Parlontieri says. "We're not going to bore someone with five pages of questions." As a result, he says RealCall offers ebank a cost-effective option that doesn't require a great deal of overhead. For one thing, it only charges for completed calls. "We don't expect a lot of questions and a lot of interaction," he adds, "because historically with banking you don't get that. It's not like buying a book or a shirt. Banking is pretty succinct."

Parlontieri says its in-house customer service team will be among the features highlighted when ebank rolls out its national ad and marketing campaign this spring. RealCall will enable it to offer the warm and personalized service that fosters loyalty among its small business customers. "Banking in America hasn't eliminated voice," he says. "Otherwise you wouldn't have all those tellers in all those branches."

CASE STUDY - LenderLive.com, loan arranger with live chat

Nowhere is the need for the human touch greater than in the complex and often confusing world of mortgages. Thus, the LenderLive Network established live text chat using eTetra's iConnect technology, soon after it rolled out its LenderLive.com online mortgage service last fall.

LenderLive offers technology and fulfillment services to banks and credit unions wishing to take their mortgage application processes online. It provides everything from site management to the actual underwriting and approval of loans. It currently has about 30 service representatives working on behalf of seven financial institutions.

"Our customers, the banks, want to be online, but don't have in place the call centers and facilities," says chief technology officer Andrew Batson. "So we answer the phones and process the applications, but we do it all under their name."

The Colorado-based company chose iConnect primarily because it goes beyond basic live chat, allowing representatives/loan officers to push documents back to customers, direct them to one of 2,000 pages where questions can be answered and help them fill out forms.

"With online mortgages customers still have a lot of questions and need a lot of personal service," says Batson. "You get a mortgage every five to seven years on average, so it's a major event - you want it to be done right."

Most customers who enter into live chat have questions specifically related to the loan process, rather than about navigating the site. "The web audience tends to be geared toward self-service," notes Batson. "But the live help icon is always flashing if they need it. About one third of those who apply for a mortgage enter into a chat session first." For LenderLive, there are two primary advantages of text chat over telephone service. Firstly, it's usually easier for customers to digest written explanations at their own pace.

Secondly, text chat sessions can be added to the loan file. Thus, anyone dealing with the same customer at a later date will have a complete record.

LenderLive is already looking at adding services, including internet telephony and even streaming video. But Batson stresses the company wants to avoid getting too wrapped up in technology that their customer base may not be comfortable using just yet. "You want to concentrate on areas that bring value to the transaction and aren't just neat," he says.

Putting the human touch to the test

So how does it work in practice? Revolution decided to put online customer service to the test by going on a cyber-shopping spree for everything from books to mortgages

SmarterKids.com

Technology: Cisco Webline's Customer Interaction Technology

How I fared: SmarterKids.com is an e-tailer specializing in educational books, software and games for children. Since I have a three-year-old child, I decided to look for products that could trigger a toddler's interest.

Clicking on the Help button took me to a page with a list of FAQs, as well as an icon offering live help. Another click connected me to "BrianW." Brian quickly responded by directing our browser to a page featuring a CD-ROM, which would help evaluate my child's capabilities as well as provide early reading introduction. When I replied that I didn't want my child banging on the keyboard of my only home computer, Brian directed the browser to a book, costing a fraction of the price of the CD, which he said would provide the same benefits. Switching tacks, I queried SmarterKids' policy on returns. Brian quickly moved my browser to a page detailing the liberal return policy. The entire experience took under 10 minutes.

Verdict: B+

A generally positive experience, give or take a few 30-60 second pauses between exchanges.

Ditech.com

Technology: LivePerson live text chat

How I fared: With visions of an oceanside villa, I paid a visit to Ditech.com to go mortgage shopping. Ditech has an icon flashing "Click and Chat" and "24 hours" that was easily visible on the home page, but I first took advantage of its free credit-check service. I got stuck filling out the forms and clicked on the help icon. A few minutes later a box appeared and "Tom" asked how he could be of service. After answering several questions, Tom moved into sales mode, sending me his phone number along with a promise to process loans in 10 minutes. After I deferred and signed off, I received an email saying that an account had been created based on the information I provided. I was given a user name and password for future reference.

Verdict: A

The live chat technology worked very well and I'm giving Ditech credit for taking customer interaction further by offering a positive, but not too pushy, sales pitch.

Mercata.com

Technology: email response

How I fared: Mercata.com is still in the process of setting up its live text chat technology, but I decided to check out the site's email customer response program. Having spotted an MP3 player that I liked, I quickly went to the Customer Service section. There amid lists of FAQs was a link to email a customer service associate for help. I sent off a query on MP3 and my worries about inadvertently getting into trouble by downloading "illegal" music. I added a second query about shipping time. Within a minute I received a message saying my questions had been received along with an invitation to either call a toll-free number or check out their list of FAQs. About 45 minutes later "Michael O" sent me an email, first answering my shipping question and then reassuring me that MP3 files downloaded from licensed sites are legal.

Verdict: B

While I had long since left the site by the time my questions were answered, I did get a personal and conscientious response within a reasonable time frame.