The customer is always right. Right?
Customer satisfaction with the goods and services that Americans buy reached an all-time high in the fourth quarter of 2006, according to a report by the University of Michigan's American Customer Satisfaction Index (ACSI). Online retail is one of the highest scoring industries in the ACSI, up this quarter by 2.5 percent to 83. Barnesandnoble.com (88) continues to lead the industry, followed closely by Amazon.com (87).
And yet, bad service thrives. The customer is right there, too.
In a recent online shopping experience, I found myself repeatedly frustrated by long waits when, having found the item I wanted through an online search, the 800 numbers listed on websites weren't answered, call centers kept me on hold for more than 20 minutes, and items that I purchased were never shipped.
What are we to make of a retail world that calls for performance marketing so retailers can pay for actual results, but then fails to live up to the standards it needed to actualize the shopping experience? In a performance-based advertising model, merchants must look beyond buying keywords and consider the entire buying and service cycle.
Whether the local small merchant accepts it or not, once that business opts for the performance marketing model, it must heed the expectations set by Barnesandnoble.com and Amazon.com and every eBay seller who lives and dies by customer feedback rankings.
Merchants need to learn how to transform clicks into sales, and a big part of that equation is effective customer service.
Entry costs rise
Meanwhile, the entry costs for web advertising are becoming higher and more time-consuming.
If it takes 20 clicks to make a sale, and it only takes a competitor 10 clicks to make a sale, guess who will have more resources to put into the next marketing campaign? The yield-to-results ratio depends on meeting (and beating) customer expectations.
According to comScore, Americans conducted 6.8 billion searches online, about 1 billion of them "local." Of these local searches, comScore estimates that 52 percent are searching for a phone number or address, as I was. How many of the 500 million searches (give or take) result in a call that is answered and efficiently processed? My experience tells me that there is a lot of value left ringing on the phone. The battle to provide the best customer service will not just be fought in the call center, but on the streets, with local merchants.
My experience is hardly unique. A recent survey revealed that a growing number of consumers -- 41 percent in 2006 compared to 28 percent in 2005 -- said a frustrating online experience would make them less likely to shop at that retailer's physical store. And 59 percent reported that when they have a frustrating shopping experience online, it affects their overall opinion of the retailer/brand negatively.
For many companies, products are becoming more difficult to differentiate through features, functions or price. There is a shift toward customer acquisition, customer satisfaction, and customer retention aimed at improving the customer lifetime value.
E-business center is potent weapon
A company's "e-business center" is its most potent weapon for maintaining long-term customer relationships: an e-business center encapsulates the call center, and customer service teams responding to email and chat requests.
What happens to companies when they blow it? They lose immediate business. Customer acquisition costs go up. Eventually they cannot afford to pay a premium price for their keywords.
eBay has been a pioneer in promoting better customer service by its sellers, knowing that good sellers mean more revenue for eBay. Are Google, Yahoo!, et cetera far behind in using service rating as a measure of relevancy?
Merchants need to think of the web as a door to their businesses. They need a protocol for customer service that delights every person who enters that door, calls on the phone, emails or chats, because in the world of performance marketing, customer service has come of age.
Just ask the customer.
Richard Rosen is founder and CEO of FastCall411 in Los Angeles. Read full bio.
