It's The Service, Stupid

E-tailers may be missing their biggest chance to snare--and keep--customers

The e-tailing group inc., a Chicago consulting firm, made a revealing discovery in March about customer service on the Web. If you bought something online during the fourth-quarter Christmas season, customer service wasn't too shabby. But if you tried to continue your habit into this year, you were in for a shock. Things pretty much fell apart, says e-tailing President Lauren Freedman. "Clearly, they weren't keeping this part of the business up to speed."

Simple stuff, such as e-mail confirmation of orders, slipped. Ninety percent of the sites surveyed provided e-mail confirmation during the holidays, but that dropped by ten percentage points two months later. Availability of real-time inventory fell nine points. Offers of free shipping slipped six points.

Customer service, it seems, is the online retailing industry's latest Achilles' heel. By service, I mean the niceties that make choosing a particular retailer worthwhile--everything from handling a complaint efficiently to letting you know up front that a certain item is out of stock. It's the stuff loyalty is made of.

But few Internet retailers take customer service seriously. It's an extra--something you can roll out for the season, just as a real store hires a Santa Claus. But it's not a core competency, as the e-tailing survey shows. Certainly not as important as, say, expensive television commercials, which continue unabated.

That's a mistake, because customer service is a place where traditional retailers are especially vulnerable. Service in real-world stores leaves most shoppers cold. A recent University of Michigan survey found that as far as shoppers are concerned, customer service is at its worst since the survey was launched in 1994. Some forward-thinking e-tailers have already begun staking out the service territory. Eight months ago, equipped its Web site with a "call back" button. When the user clicks it and enters a phone number, software forwards the information to a call center, and the customer gets a phone call back. Kirk Sunarth, customer service representative for says "it's still very new, but customers who use it are very impressed. It takes a minute for us to call them and they always say, `Wow."'

Help Icon., a seller of children's toys and products, has added a live chat function to its online retailing site. If you get stuck, click the live help icon and within minutes, you're exchanging instant messages with a customer-service representative. I used that function recently when I wanted to order a gift certificate. I found out from the customer-service rep that Rightstart doesn't sell gift certificates online, only by phone. I didn't get exactly what I wanted, but I'm happier than if I had searched the site in vain.

There are low-tech ways to make the customer happy, too. Here's an easy one for e-tailers: List your phone number prominently. If it isn't, "it can drive the customer crazy," says Internet consultant B.L. Ochman of "What kind of message is that sending? I don't care what you have to say. Just send me an e-mail, and maybe I'll answer."

Internet retailers have successfully created awareness for their brands. But if they really want to make e-commerce a trend rather than a fad, they'll have to focus on service. It's what will turn dabblers into loyal customers. And traditional retailers have left the door wide open.