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Reality Check

March 2000

Lior Haramaty Turning New Customers Into Long-Term Shoppers


E-commerce is beginning to boom. In only its second year as a viable retail channel, consumers spent some $7 billion dollars online during the 1999 holiday shopping season, exceeding analyst expectations. But these customers didn't materialize out of thin air. They were lured online by the $3 billion that Internet companies spent in advertising and marketing. You couldn't turn around in December without being bombarded by Internet shopping ads coming from the TV, radio, billboards, and any tangible or virtual surface that could support a promotional piece.

Though the effort paid off, holiday season statistics demonstrate the expense of changing consumer habits. Customer acquisition costs for traditional retailers are under $20 per customer, established Internet retailers $40 to $50 each, and for many virtual start-ups, the costs associated with acquiring new customers can run up to $100 or more. Given the high cost for each online shopper, Internet companies are under a lot of pressure to figure out how to turn new customers into long-term shoppers.

This is not an easy task when you factor in the shortcomings that thwarted the online shopping experience last season. An abysmal percentage of products were not delivered in time due to supply-chain failures, and shopping carts littered virtual malls as customers were left confused and bewildered by technical glitches and product information deficits. In a hostile environment such as this, how do you build consumer confidence to keep them coming back?

You do so by going back to basics. Traditional retail stores have their fair share of problems but customer service with a personal touch evolved to help turn customer angst into customer loyalty. Until recently, real-time customer assistance was not available when it came to online shopping. If customers had doubts about a company's ability to really deliver a product by a certain date, or if their transactions went through, or if the XL sized shirt was large enough, there was no real-time online presence to get the immediate gratification fix that shopping is supposed to deliver. Instead, customers had two less-than-perfect options. They could e-mail their questions and wait and wait and wait for a response. Or search online for a toll-free phone number, go offline, and then place a call to a service rep, turning the time spent shopping online into a complete waste of time. The call center rep may complete the transaction, but does not reinforce or further educate the customer about the online buying process.

The good news is that this state of affairs is changing. Today there are voice and data solutions available that provide intuitive ways for customers to communicate with company representatives from an online site. Companies can now link their Web sites with their call centers, enabling online customers to click on an icon on a corporate Web page to establish a real-time voice connection. Online calls go directly to call center agents, or any phone number, while customers use their PC audio capabilities to talk to company representatives.

Joint Web browsing solutions are also available that simulate the customized in-store shopping experience from the convenience of consumers' homes. Reps can help customers fill out online forms or show them pages with products that they think the consumer might be interested in. Customers can surf with company reps to pages that refer to competing or related products to ask questions.

How many times have you bought a product because a knowledgeable sales person suggested it? You might not want to admit it, but it's probably a lot. Here is a list of products that can add this personal touch to online shopping in order to increase the number of hits "Submit Order" buttons get. The main features available are:

  • Joint form handling. Call center agents may assist a customer in filling out a form in real time.

Both the customer and the agent can see the form and the entries, and both can type in or correct fields. This can ensure the customer does not quit in the middle, and that the information entered is accurate.

  • Guided Web browsing. A call center agent can guide a customer to a Web page.

This makes the experience easier for the user, especially in finding what the user is looking for, and the agent can offer additional products to the customer.

  • Text chat. Agents and customers can exchange real-time text messages. If a customer, for any reason, prefers to communicate using text, real-time text chat can provide an excellent way to communicate.

Enhanced online shopping with all or one of these features can increase online sales completion rates as well as add new efficiency to the entire sales process. Providing a more satisfying sales experience maximizes the dollars invested in getting consumers to your site by getting them to come back for more. In the future, not only are they more likely to purchase from you rather then a competitor, but they're more likely to do most of the legwork themselves at the Web site, knowing that as soon as they need help a rep is only a click away. This gives call center agents and retail clerks more time to focus on customers at a more advanced stage in the shopping cycle.

E-commerce is booming. Thanks to VoIP and related technologies, it will be a pleasant experience.

Lior Haramaty is a co-founder of VocalTec Communications and belongs to the original group that started the VoIP industry. Haramaty has dealt with passing audio over data networks since the late 80s. VocalTec started shipping VoIP products in the early 90s. Haramaty has a multidisciplinary background in the business, technology and marketing fields, is a co-inventor on VoIP patents, and has initiated and spear-headed standards activities in the industry. The goal of this column is to clearly explain issues related to voice (and other media) over Internet Protocol (VoIP) to anyone, including the "acronym-impaired" person. Requests for future column subjects are welcomed. Please write to lior@vocaltec.com.

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