Online Retailers Have Little Margin for Error in Customer Service, Study Says

By September 26, 2008 1 comment

A new study commissioned by Tealeaf and conducted by Harris Interactive reveals that almost half of online consumers (41%) will cancel their transaction if they experience a problem with an online transaction. That cancelled order often goes into a competitor’s pocket. “This represents a $57 billion potential impact to revenue on shopping sites alone.” Customer service is still the stated top desire of retailers: 91%, in fact, said it was either very important or critical to their business plans, according to Forrester Research’s report “Obstacles to Customer Experience Success, 2008.”

While brick-and-mortar stores like Best Buy or Barnes & Noble might have few competitors in physical proximity, myriad online sites offer similar products at similar prices. Long lines at Best Buy are waited in if it’s the only place in town to buy. And if there are no other convenient options, you’ll go back, even knowing in advance there might be only two cashiers to two hundred customers in the entire store.

The ubiquity of e-commerce sites necessitates that sites get it right the first time. The giant market is also slippery, and that’s good for us as consumers as, ideally, the wealth of products should mean we can -- again, ideally -- choose the way we shop, not funnel our desires into a single available outlet. And it makes it easier to change where we shop if we’re not happy with the results.

In another Forrester study, retailers are spending 21% of their 2008 budget to online customer retention.

Word of poor customer service spreads quickly online. 58% of customers share their negative experiences online. Commenting, forums, blogs, social networks, and customer review sites mean that customer dissatisfaction can be quickly disseminated.

Rebecca Ward, CEO of Tealeaf, says that "[b]usinesses must take definitive steps to differentiate themselves by understanding and improving their customers' site experiences, and equipping their contact centers to truly meet the needs of online customers. Companies that do take action will be the ones to claim a greater share of this billion dollar business opportunity."

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1 Comment

Very interesting article. As President and CEO of a Mystery Shopping firm, I can tell you that online retailers need to be as proactive about customer service monitoring as the brick-and-mortar stores are. Hiring mystery shoppers to "shop" their websites and review ease of use, delivery of products, customer service emails or calls, etc. can be a very effective way for companies to see their site through the eyes of their customers.

Submitted by Kathy Doering- Ann Michaels & Associates, Ltd. (not verified) - on September 28, 2008 at 03:15 pm

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