Service providers have come to realize that the Internet presents great opportunities as well as challenges in serving customer needs. The new e-consumer is more informed and expects more from his service provider—traditional or online.
According to a Jupiter consumer survey, only 41% of respondents were satisfied with the state of online customer service.1 In another study involving B2B customers, Jupiter revealed that poor customer service presents a serious threat to e-commerce. The study reported that B2B customers are unhappy with the expediency of online channels, specifically when it comes to processing inquiries, i.e., customers who expect rapid responses to their e-mail inquiries were frequently disappointed.2 Poor service translates into lost revenues as well. Datamonitor indicates that e-businesses will lose $3.2 billion in sales because of inadequate customer service on their Web sites.3
Companies doing business online need to see the link between customer service and repeat visits. According to Forrester Research, 42% of shoppers who use online customer service have stopped shopping at a particular Web site because they were unhappy with the service they received.4 Some evidence indicates that Web customers tend to consolidate their purchases with one primary supplier when purchasing from that supplier becomes part of their regular routine.5 Moreover, loyal customers frequently refer new customers to suppliers. eBay, one of the e-commerce leaders, gets more than half of its customers from referrals.
In the early days of consumer e-commerce, the problems experienced by many Web shoppers involved Internet orders that were never fulfilled or were incorrectly fulfilled.
The problem was further compounded when consumers were unable to contact customer service agents or find any kind of resolution. In fact, many of the early dot.com failures can be traced to order fulfillment foul-ups. According to a recent study, one of the main reasons for dot.com failures was a lack of service management processes to support the back-end technology.6 This finding supports the assertion in Chapter 3 that a business process orientation is fundamental to service quality. Companies need to integrate front- office applications like order generation and customer support with back-office processes such as logistics and order fulfillment.
Service has become even more important when doing business online. Research conducted by the management consultant firm Accenture reports that 80% of nearly 1000 corporate buyers rate a strong brand and reliable customer service ahead of low prices when deciding companies with which to do business online.7 Research for luxury purchases online confirms the
Table 6.1 Online Service Quality for Luxury Purchases
Service Ratinga
Good customer service 4.55
Money-back guarantee 4.48
Easy return or exchange of merchandise 4.46
Control over use of personal data 4.43
Site reliability 4.42
Ease of use 4.33
Wide product selection 3.99
Fast site 3.97
Information related to products/services sold 3.93
Wide range of shipping/delivery options 3.88
Brand name 3.65
Site personalization 3.55
Physical presence 3.49
Discounts or coupons 3.24
Personalized product recommendations 3.12
Recommendations to complement previous purchases 2.95
a Ratings ranged from 1 (very unimportant) to 5 (very important).
Source: From Forrester Research Inc., 2001.
importance of good customer service. A survey of consumers rated what was important to them when deciding to buy online from a luxury store. Table 6.1 provides the responses, with answers ranging from 1 (very unimportant) to 5 (very important).8
Forrester Research found that online customer satisfaction is most affected by a business that is well staffed and responsive; offers simple and easy returns; and provides order tracking capabilities. In another study, subjects from an NPO panel of Internet users found that the following factors most significantly influenced e-satisfaction levels (in descending order): convenience, site design, financial security, and product information.9
Generally speaking, online customer service has failed to live up to customers’ rising expectations, especially regarding responsiveness. Online customers’ patience is short lived; in fact, the “15-second rule” usually applies. Customers will quickly abort online activity if they become frustrated while navigating a site or attempting to place an order.
Customers also expect timely responses to their e-mail inquiries. More than half of all consumers expect online retailers to respond to e-mail inquiries within 6 hours, according to Jupiter Research; yet only 29% actually meet those expectations.10 When consulting firm CustomerRespect.com spent 4 months e-mailing the 100 largest corporations, the results were quite startling: 37% did not respond at all—not even with automated form letters; it took 3 days or more for an additional 22% to answer.11 According to Jupiter Media Metrix, only 30% of retailers answered customer service email messages within 6 hours. Jupiter also found that 40% of 250 online retailers whom they investigated took at least 3 days to respond. A study of 50 retail companies by Giga Information Group found that the average response time to e-mail inquiries was 12 hours.12 It is fairly obvious that lack of online responsiveness is widespread and needs to improve.
The previous chapter examined the key determinants of service quality. Zeithaml and colleagues conducted research examining whether traditional service quality dimensions differ from e-service quality determinants. Based on a series of focus groups concerning e-service quality, they proposed a model and 11 major dimensions of perceived e-service quality including the original dimensions of reliability; responsiveness; access; assurance;
and empathy are still relevant in e-commerce. However, several new dimensions of e- service quality emerged from their research including ease of navigation; flexibility;
efficiency; site aesthetics; price knowledge; and customization/personalization. Price knowledge refers to the ability of online shoppers to determine shipping price, total price, and comparison prices. In fact, an interesting finding of Zeithaml et al. was that, contrary to conventional wisdom of how value is framed, price and quality were more strongly intertwined in online shopping.13 Data collected from 271 subscribers to a regional Internet service provider revealed that six e-service quality indicators (reliability; access;
ease of use; personalization; credibility; and security) follow closely to the original service quality indicators developed by Zeithaml et al. Reliability was the strongest
predictor for Internet purchasers’ perceived service quality, followed by personalization, ease of use, and access.14
Online consumers are pretty clear about what they expect online. A recent study conducted by Mercer Management Consulting confirms the importance of information and convenience as reasons why consumers value using the Internet medium. According to a study of online consumers, the information gathered in making purchase decisions offered the greatest value to online shoppers (see Figure 6.1).
Figure 6.1 Why Consumers Value the Internet (From Mercer
Management Consulting Consumer Online Survey, 2000.)