Six Golden Rules of Online Customer Service

Here’s a sure sign that e-commerce has come of age: More Americans shopped online during the 2001 holiday season — 58.7 million — than voted in the 2000 presidential election. So even though Internet sales still account for less than 2% of the total retail economy, the Web is a viable and growing sales channel.

That said, Web shopping is still a new channel with considerable room for improvement. Using research from three comprehensive studies that The E-tailing Group has conducted with the Direct Marketing Association, we have tracked the evolution of multichannel and cross-channel selling. With each study we looked at 100 top online merchants across 16 consumer categories to measure online merchandising and customer service. We’ve used this research to formulate the Golden Rules of Online Customer Service.

Rule 1: The role of customer service is to deliver a complete customer experience.

The shopper experience begins at your home page, then proceeds to search functionality, completing the order, post-order communication, and the receipt of the goods. Returns, if they occur, are also part of that experience, as are pre- and post-order inquiries to the merchant.

Among the merchants surveyed by The E-tailing Group and the DMA, product was generally shipped in a reasonable time (three to five business days); orders typically arrived within four days. Efficient return methodology, from prepaid labels (provided by 15% of sites) to online return forms (4%), can help convince wary shoppers to give ordering from a Website a try. So does allowing online buyers to return merchandise to brick-and-mortar stores (offered by 65% of the surveyed Websites that had physical stores).

The bar for exemplary service continues to rise as customer demands constantly change and evolve. Fortunately many merchants monitor their customer service and customer behavior in an attempt to set high standards that are sure to satisfy shoppers.

Rule 2: The goal of e-commerce is to motivate shoppers to buy.

If your Website is a popular destination, that’s great — so long as the visitors at one point or another make a purchase or three. And there are definitely ways that you can tempt these visitors to buy.

During the holiday season, when The E-tailing Group and the DMA conducted their most recent study, several online marketers offered some form of free shipping, though only 4% of the sites surveyed gave away unconditional free shipping. In keeping with today’s mantra of “profitability first,” 66% of the sites featured free shipping at a threshold. (What appeared to be most common was a $100-$200 minimum-order requirement at sites where the average order was less than $74.) These free-shipping offers are effective tools to increase the basket size or average order.

E-mail has also proved to drive online sales; many marketers use it to let customers and site visitors know of free shipping and other offers. What’s more, to encourage repeat purchasing, 83% of the merchants surveyed sent targeted e-mails once our transaction was complete. Those e-mail messages ranged from reminder services to information about cross-channel conveniences. Cosmetics manufacturer/marketer Clinique went so far as to personalize the message with information about a store in our neighborhood.

Gift services, such as certificates and suggestions, are also a critical selling strategy, particularly during pertinent holidays. Of the merchants surveyed, 72% delivered gift certificates online. Offering them both electronically (44%) and via mail (83%) facilitates last-minute gift-giving. And that’s key, since according to BizRate, last-minute shoppers spent $54 million on Christmas Day, up 26% from 2000. Surely the widespread availability of gift certificates played a central role.

Gift Services: Who Offers What
Feature 2001 Penetration 2000 Penetration
Gift certificates/cards 72% 70%
Gift suggestions 85% 86%
Gift search 46% 14%

In gifting, the little touches add up for the shopper — and therefore can add up to sales for you. Among the merchants surveyed, 55% offered gift-wrapping or boxing, though only 15% of those sites did so free of charge. The average cost of gift-wrapping has risen slightly from $4.31 during holiday 2000 to $4.59 in 2001. Was the gift presentation worth the money? A number of merchants excel in this area, including upscale apparel marketer Neiman Marcus, cosmetics purveyor Reflect.com, multicultural gifts cataloger Eziba, and online apparel discounter Bluefly. But the gift-wrapping of other significant marketers was not worthy of the price; they should be concerned that their prestigious brands might be tarnished by such a shoddy presentation.

You’ve Got Mail: Who’s Responding
Feature Penetration
Answered e-mail on first attempt 79%
Answered e-mail on second attempt 3%

Average time it took to receive answer to e-mail 21.08 Hours

Rule 3: Establish shoppers’ expectations, from product availability to delivery costs — and then meet them.

Establishing — and meeting — expectations often begins with responding to an e-mail query from a prospective customer. The E-tailing Group believes that 24 hours is an adequate time for turning around answers to customer inquiries. Happily, among the sites surveyed, the average response time was slightly more than 21 hours. But only 79% of the marketers gave any response at all to an initial e-mail query. A word to the wise: Whenever possible, offer a personalized response (77% of those that responded did); you cannot underestimate the branding value of such a message.

The rough economy led many marketers to maintain lower inventory levels; this in turn led to more backorders and out-of-stocks than in previous holiday seasons. Providing real-time inventory (or as one merchant described it to me, “right-time inventory”) status can allow you to omit sold-out products from your site. If you opt to keep backordered product on the site pending manufacturer shipments, be clear about when you expect the product to arrive.

Rule 4: Respect shoppers and their privacy.

Providing accessible information about how to contact the site, the customer service department’s hours of operation, guarantees, and privacy policies enhances shoppers’ perception of a merchant. And when we say “accessible,” we don’t mean buried five clicks from the home page.

Rule 5: Communicate with customers — carefully and consistently.

Talk to Me: Who’s Confirming What
Feature Penetration
Immediate order confirmation 90%
Post-order confirmation 98%
Shipping confirmation 80%
Information, Please: Who’s Displaying What
Feature Penetration
Toll-free customer service phone number 99%
Customer service hours 74%
Privacy policy (or link to policy) on home page 90%
Guarantee 62%

You want your site to be one of the best? Then it must offer immediate order confirmation as well as send post-order e-mail confirmations and e-mail confirmations that the order that has shipped.

We found that 23% of the sites made live chat available. Those sites that had mastered this challenging art were able to answer questions in about seven minutes. Unfortunately, disappointment prevailed on four of those 23 sites, as the service was not in working order. This brings to mind the saying “If you’re going to do something, do it right.”

Shoppers like to know that a package they returned has been received. This provide you with yet another opportunity to communicate with them — and to turn a negative into a positive. Twenty-three percent of the sites have adopted the welcome customer service strategy of sending e-mail notification that credits had been issued.

Rule 6: Make shopping fast, easy, smart, and fun.

Status Check: Who’s Sharing What
Feature Penetration
Real-time inventory status 54%
Information about backordered/out-of-stock product 16%
Shipping status 79%

Generally speaking, today’s shoppers are time-starved and looking for the utmost in convenience from their shopping experiences. According to a study conducted by BIGresearch last year, 66% of online shoppers stated that convenience was the biggest driver in shopping online, and nearly 27% were motivated by how fast the process was. They will gravitate to sites that offer express-shopping features such as one-click settings and quick-shop catalog ordering.

Such niceties have helped reduce the average number of clicks to checkout from 8.76 clicks in 2000 to 5.36 last year. You can play up the speed and convenience of shopping from your site by using messaging such as “ordering is as easy as one two three” or “just one more step.”

But never forget that shopping should also be fun and that tools that engage the shopper make for a richer shopper experience. Using technology to improve upon traditional merchandising and customer service reinforces the value of the Internet as a channel and bodes well for significant channel growth.


Lauren Freedman is president of The E-tailing Group, an e-commerce research and consulting firm in Chicago. Her book, It’s Just Shopping, will be available in June.

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