Tech Troubles Stifling E-tail Customer Service

According to a report released Tuesday by the Yankee Group, e-tailers consistently fall far short in customer service strategy because too many resources are expended trying to solve the technical riddles of online selling.

The Boston, Massachusetts-based research firm said that while multi-channel selling that balances on and offline strategies for reaching customers is clearly the wave of the future, firms struggle to find the right software solutions to make that type of brick-and-click combination possible.

Ultimately, the firm noted, e-tailers often end up ignoring key opportunities to lock in long-term customers.

Failing Grades

The report bolsters a recently-released survey by Gartner Group showing that even the best-known online retailers fall short in the area of customer service, with the majority of e-tailers paying “little more than lip service” to the issue.

In fact, the Yankee Group study may help explain why Gartner’s survey of 50 e-tail sites did not find any company that qualified for “excellent” or “good” ratings in customer service.

Customer Power

The authors of the Yankee Group study argue that the single most important task facing firms as they move onto the Internet is influencing customers.

“The increased power of the customer and the availability of alternatives makes influencing the customer equally, if not more, important than integrating selling channels,” said Chris Selland, a Yankee Group vice president.

While an entire software industry has been spawned by corporate concerns over customer relationship management (CRM), Selland added that most CRM software solutions target a specific part of the online selling or customer care process and often do not work together effectively.

Scattered Solutions

“The problem today is that no single vendor provides the full range of applications or even the platform capabilities to build such a system,” said Sheryl Kingstone, a manager in the Yankee Group’s Customer Relationship Management Strategies Planning Service.

“The emerging opportunity we see is the need for a unified platform,” Kingstone added, one that not only enables a smooth flow of selling across all channels but also gives retailers insight into customer behavior and transaction patterns.

High Stakes

With the dot-com landscape growing more competitive by the day, the need for improvement in the customer service arena could not be more acute, nor could the timing be worse.

“E-tailers are annoying Web customers at a time when brand loyalty is the ‘Holy Grail,'” Gartner research director Carol Ferrara said recently.

In fact, a report released in July by Datamonitor said poor customer service — represented primarily by abandoned online shopping carts — cost retailers $6.1 billion (US$) in lost sales during 1999 alone, a number that could grow to $173 billion.