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Microcap & Penny Stocks : PNET - XGAG Phon-Net

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To: MakeMoney who wrote (234)6/7/1999 5:29:00 PM
From: IPOhopper   of 262
 
A great article on why etailers should use DirectConnect:

sjmercury.com

Catering to cyber-customers

E-retailers race to ease online shopping frustration by
giving their customer service a human touch

BY DEBORAH KONG
Mercury News Staff Writer

IN the race to stake their claim online, companies have rushed to
set up Web sites where customers could buy their favorite jazz
CD, Chanel No. 5 perfume or a dozen roses with just a few clicks
of the mouse.

But it turns out the technology that was supposed to make online
shopping so easy can get in the way of buying. Companies now
realize they need the virtual equivalent of the smiling face behind
the counter at the mall.

Web merchants learned that lesson during the holiday season, when customers demanded
answers about Daddy's golf clubs, now. When they didn't get them, they disappeared -- perhaps
to the local sporting goods shop or an online competitor.

About 15 million online consumers made purchases on the Web last year, and 24 million are
expected to spend a total of $12 billion online this year, according to Jupiter Communications.

To meet that influx, companies are adopting new customer service technologies, including online
self-service based on artificial intelligence or live, one-on-one chat sessions with customer service
agents over the Web.

Some systems let agents manipulate Web pages so that a picture of, say, a green sweater appears
on the customer's screen as the chat about that item is taking place.

The Fragrance Counter's site uses LivePerson.com's technology to offer live chat sessions with
customer service representatives. The service started in December, in the heat of the holiday
selling period, but the company had to take it down because it was overwhelmed. It returned in
January.

''One of the most important things about being a merchant is taking care of your customers,'' said
Eli Katz, president of the company's e-commerce division. ''Anybody can put up a Web site;
Web sites are commodities. There's this . . . mad rush to see who can sell more below cost than
the next guy. Having this type of service is what sets you apart.''

A few idiosyncrasies

But as with online shopping tools, the technology is still developing and some services have a few
idiosyncrasies. Katz compares the state of online customer service to the progress of his
14-month-old daughter, Rachel, who is standing up on her own and is about to take one or two
unassisted steps.

''That's where we're at,'' he said. ''Part of it is, really, we are building this airplane as we fly it.''

When the technology works, it gets results. The customer service agent, despite communicating
via text on a computer screen, somehow manages to convey a human face and friendly tone, said
Debra Pratt, a Pittsburgh receptionist who used EveryCD.com's customer service when she
couldn't find an out-of-print jazz album by artist Richard Tee.

''There are no interruptions, and it's just as fast'' as the phone, said Pratt, whose conversation is
punctuated with ''hold on, please,'' as she answers another line. ''You type in whatever question
you have and they have the answers. You don't feel like you're taking too long and they seem to
be happy to help you.''

Pratt's agent showed her a Web page where he found the used album and said he would place the
order and it should arrive in two to three weeks. ''I (couldn't) find that thing anywhere,'' said
Pratt, who scoured many stores for it.

Filling customer needs

EveryCD co-founder Pierce Ledbetter said the company's biggest challenge is helping customers
find exactly what they want. EveryCD created a search team that answered e-mail, but soon
found that by the time the notes were exchanged, people lost interest and purchased the music
from another site -- resulting in hundreds of missed sales.

During the 1998 holiday season, it became apparent that e-mail just wasn't fast enough for
impatient customers. That spurred EveryCD to use Acuity's Corp.'s Live Search Center
technology and hire three online agents to answer questions.

Next, Ledbetter said, he will turn his attention to finding a way to route questions about jazz, for
example, to the resident jazz expert. He's also looking at compiling a database of related listings
so an agent could tell Pratt that if she likes Richard Tee, she may also enjoy a similar artist.

That feature is already found on some sites, such as Amazon.com, which presents customers with
other choices when they pick a book or music title.

Changes planned

A recent Jupiter survey of 30 executives of various online stores and services showed that 90
percent plan to change their customer service operations in the next few months.

''Online retailers are now waking up to the growing customer demand for support and are
beginning to recognize the opportunity to convert shoppers into purchasers, via more proactive
customer service,'' according to the Jupiter report.

As examples, Chuck Jepson, CEO of Novato-based Inference Corp., cites Web giant America
Online, which is one of his clients. AOL's call center is staffed with several thousand
representatives who are using the technology to handle questions over the telephone and Internet,
he said.

''At the end of the day, when people are spending money, they want to talk to somebody if
something goes wrong,'' Jepson said.

But both Jupiter and Tim Guleri, CEO of San Mateo's Octane Software, caution merchants to use
the costly human customer service technology judiciously because staffing such virtual call centers
can be expensive.

Metro-Goldwyn-Mayer's www.mgm.com site knows that firsthand. It counts the flood of
unrelated customer service questions to its online agents among its chief challenges: One of the
most common questions is ''Where do I send my script?'' said Darci Pierce, who is in charge of
MGM's corporate site.

Others include would-be starlets and aspiring actors who ask where to sign up and fans who want
to know where they can spot a favorite celebrity or obtain an autograph.

Still, Pierce said she's happy with the service, which started about a month ago and is provided by
PeopleSupport.com. ''If someone has a question or problem, they can click right in. They don't
have to disconnect'' from the Web to call customer service, she said. ''In the end, it's going to
result in more sales.''

Guleri, whose company provides a software customer support package that includes e-mail, Web
and telephone services, said one of the solutions may be getting customers to help themselves.

''A lot of self-service is really a cost-saver for the company,'' he said. ''(But) it does not take
away the need for potentially human intervention, for the right type of customer.''

One self-service technology is Yoda's Help Desk for gamers at www.lucasarts.com. The
interactive service takes gamers through a process that uses automated, artificial intelligence to
answer questions about sound, video, crash problems or error messages, for example. About 500
to 1,000 successful searches are conducted each day, said administrator Brian Carlson.

Service wrinkles

Sunnyvale-based eGain Communication Corp.'s technology allows companies such as Mazda
(www.mazdausa.com) to e-mail a quote for a Mazda Miata, for example, to customers who ask
for it. The request is forwarded to their local dealer.

But the new technology still has some quirks. Some services force customers to wait several
minutes for agents to assist them. Sometimes, no operators are available. Others have limited
hours, usually in the daytime. And at a few sites, repeated queries were met only with ''What can
I help you with today?''

Peter Keenan, who ordered some Pee-Wee's Playhouse videotapes for his children at mgm.com,
sent two e-mail messages asking about their status, but never heard back. When he clicked on the
live customer support, he was pleasantly surprised to find someone who could help. However, the
agent's database didn't carry files dating back to March, so he was referred to another site.

It's a human thing

Still, Keenan, a Los Angeles television commercial producer, said he didn't mind. ''Man, this is
living large because at least you're getting some interaction and it's not a computer. It's somebody
who's trying to take action on your behalf,'' he said.

''From a customer service standpoint, I think it's righteous. But I'm still waiting.''

Ultimately, the new technology offers the same lesson that Web sellers are still just beginning to
grasp: It all comes back to the humans.

In the case of 1-800-FLOWERS.com's service, which is powered by eShare Technologies Inc.'s
NetAgent, Pauline Berko tried contacting a customer service agent after searching the site and
failing to find the answer to her question.

Berko, a controller at a New York Internet design and Web-building company, found only a
generic listing for houseplants on the site, but wanted to know whether the company could deliver
a peace lily as a Christmas gift to a friend in Houston.

She clicked on the live online customer service button, but the agent ''didn't understand what I
was asking,'' said Berko, who quietly typed her questions while at work. ''She just seemed a little
lost.''

Undeterred, Berko ended the session and tried again. This time, she found another agent who told
her she could get the plant, and she placed an order for it.
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