February 2000

Online CRM Solves The $6 Billion Problem

BY ERIC GREENBERG

Looking back on a holiday season that saw the birth of terms such as "e-Christmas," the value of premium customer relationship management (CRM) has become all too apparent. While post-holiday statistics confirm that online shopping has become a valuable alternative for the rapidly-growing population of wired consumers, the rate of failed Internet commerce transactions has skyrocketed, reaching record levels last year.

A study conducted by the Boston Consulting Group and Shop.org, the association of online retailers, showed 270 percent growth in the number of orders placed online, and a 300 percent increase in revenues enjoyed by e-tailers this past year over the year before that. However, according to Enamics, a substantial 25 percent of online shoppers abandoned attempts to buy via the Internet. Further, it was forecast that customer frustrations and disappointments would result in losses of more than $6 billion of potential revenue during the 1999 holiday season.

Heeding the words of industry analysts, e-tailers prepared for the onslaught of online shoppers by investing heavily in content development and site maintenance, and spending millions of dollars on advertising and promotions for the holiday season. However, the focus still seemed to be on acquiring customers, not servicing them. In their attempts to generate interest and move traffic to their sites, little attention was paid to the most fundamental of retailing principles: customer service.

According to Computer Economics analyst Michael Erbschloe, part of the problem is that so many of these new e-tailers are not traditional retailers at all -- they are dot com companies that are strongly focused on raising venture capital and preparing for their upcoming IPOs. As such, they struggle with even the most basic concepts of retailing. On the other side are numerous brick-and-mortar companies that launched sites in anticipation of their first e-Christmas, while not fully comprehending the high level of consumer demand with which they would be met online.

ONLINE CUSTOMERS NEED HUMAN INTERACTION
Although many companies initially thought that Web-based commerce would remove people from the selling equation, this has not been the case, as retailing on the Web is still very labor-intensive. Jupiter Communications reports that 90 percent of online customers prefer human interaction, and analyst Melissa Shore forecasts that providing outstanding customer service is going to be even more important now, as there are more customers shopping online who are less comfortable with making online purchases. New online shoppers tend to be especially nervous about completing transactions without human assistance, and often abandon shopping carts out of frustration, or fear of submitting their credit card information over the Web.

The bottom line is that both novice and Web-savvy online shoppers have begun to demand the same level of customer service and responsiveness they have become used to receiving over the phone. Clearly, this is not what they are getting.

THE SOLUTION: ONLINE CUSTOMER SUPPORT
That's where e-services come in: From enhanced e-mail management to Web-enabled applications, call centers using these technologies provide the solutions for today's online-based CRM problems. Industry trends point clearly to an increase in customers' expectations for e-mail and Web requests, with expected response times dwindling from hours to minutes.

Enhanced e-mail management promotes faster responses, and employs auto-responders that provide tangible proof to customers that their requests are not being ignored. The combined use of new technologies and agents skilled in written communication yields more satisfying interactions for the customer, and reduces customer service costs. If e-mails are not handled effectively, a customer's next step will usually be to use the phone, thereby increasing the cost of that customer interaction significantly.

Web-enabled applications include voice over Internet Protocol (VoIP), Web-enabled interactive voice response (IVR), Web callback, Web call-through, live text chat, and the use of push/pull technology.

Voice over IP enables customers to talk over the Internet (instead of through a carrier such as AT&T) with a telephone service representative (TSR) in a call center. This is essentially the same on the agent side as receiving phone calls through the Public Switched Telephone Network (PSTN), and is handled in the same manner by call centers. However, this technology provides for a substantial decrease in standard telco expenses (especially when used in place of a toll-free number), and tighter integration of voice and data communication.

Web-enabled IVR units provide for the development of a more complex customer interaction. The user's navigation through the transaction is very different than with traditional voice-based services, and the system supports more complex data entry and data responses. In addition, Web-enabled IVR provides the added benefits of centralized data storage and more effective reporting metrics.

Web callback provides customers with a quick and direct link to a telephone service representative, wherein the TSR calls the customer on the phone using the number they have input at the site. Because the phone is used for voice communication, rather than the computer, the problem of working with different PC configurations is bypassed. Web callback is least efficient for customers that are using a dial-up connection and only have one line in their home -- they'll need to disconnect from the Internet in order to accept the incoming call.

Web call-through is similar in nature, however the user's Web browser actually initiates the call to the TSR. The TSR receives a screen pop identifying the caller and the referring Web site information, at the same time the call is transferred to them by the ACD. Web call-through has the added benefit of providing businesses with real data about their site visitors and Web site effectiveness. Web call-through affords customers the comfort of a real person to help them navigate their visit to the site, similar to the way callers have learned to "zero out" of voice mail systems to speak with a live person.

Live text chat offers customers immediate access to a trained telephone sales representative in a familiar setting -- typing messages back and forth through an interface on the company's Web site. Real-time interaction promotes customer participation in sensitive credit card and banking transactions, and is similar to the above technologies in that it provides site visitors with the help they need to navigate unfamiliar Web pages and online procedures.

The above technologies can be combined with push/pull technology to further enhance the customer's online experience. TSRs can interact with the customer in real-time, while pushing appropriate content to their Web browser, providing assistance throughout the session that simulates that of a personal shopper in a department store. Combined, these technologies provide for significant opportunities to cross-sell and up-sell the customer, as well as a significant means of closing more online shopping transactions.

TANGIBLE RESULTS
Whether used alone or combined for a multiple interaction channel approach, the latest Web-enabled technologies provide solutions that online retailers need now. The benefits garnered from these solutions are multi-tiered:

• Orders taken through a client's Web site and by telephone sales representatives can be consolidated, allowing for increased efficiency, and providing for the collection of more accurate metrics;
• The closure rate of Web transactions can be increased, yielding higher revenues, and decreasing the high rate of abandoned shopping carts;
• Customer satisfaction levels can be elevated, while broadening customer relationships and promoting customer retention;
• Significant cost savings can be realized by handling customer interactions via e-mail and the Web;
• Opportunities for cross selling and up-selling are promoted, and impulse-buying revenues are increased;
• And the e-commerce experience is personalized, enabling customers to have the human contact they desire.

Industry analysts predict that the fall out from the first e-Christmas will result in a consolidation of online vendors -- some will make it, but many won't. The companies that do will be those that have outsourced their customer service needs, or beefed up their internal customer service departments. Call centers who turn to e-services as the next line of attack will be able to provide cost-efficient, humanizing alternatives to these companies, thereby increasing revenues and giving consumers the service they are clamoring for.

Eric Greenberg is the president and CEO of Millennium Teleservices, LLC. Millennium Teleservices is a premier provider of integrated teleservice and direct marketing solutions.