[January 10th, 2001]

See Also   Why You Need an Add URL Page   A Tale Of Two Sites   Don't Duplicate...Differentiate!   The Continuing Battle Against Online Fraud   Taking Care of the Pennies   How To Recession-Proof Your Business   Your Fulfillment Choices   The Silent Thief - How to Get Rid of TopText   A Checklist for Accepting Credit Cards Online   Five Questions That Will Help YOU Succeed Online   Back To "E" Basics   Beyond SET: Enhanced Security for Online Transactions   Just How Serious is Online Fraud?   Your Direct Channel to Customer Service   Online Customer Service: Best (and Worst) Practices   How to Survive the Dot.Com Shakeout   Step-by-Step to Your Own Profitable Web Business   Where Do Average People Find Business Success?   What's REALLY Required To Start An Online Home Business?   CRM in SmallBiz: Disappointing Misconceptions

For many people, last year's spate of dot.com failures did not come as a complete surprise. After all, quite a few financial analysts had long been making noises about the dangers of investing in over hyped and overvalued Internet stocks. And even to me it was obvious that many e-businesses were suffering from a terminal disease I call NDBP - No Discernible Business Plan.

With the benefit of hindsight, there were other clear signs that things were going badly wrong in the world of e-commerce. Take for example the fulfillment fiasco of Christmas '99 that eventually resulted in 7 major online players agreeing to pay the FTC $1.5million in fines because they had failed to tell holiday shoppers that their deliveries would be late. This was an obvious warning that online shoppers were not receiving the level of service that they expected. And it should be apparent to everyone that companies who fail to look after their customers are doomed.

Unfortunately the dot.com shakeout is continuing, and possibly even getting worse. A massive 60% of last year's dot.com layoffs took place in the last quarter and disappointing holiday season sales may lead to further large-scale job losses over the next few months.

So what can you do to help ensure that you're an e-commerce survivor?

Quite simply, I believe that those e-businesses that can quickly learn how meet or exceed their customers' service level expectations will stand a good chance of surviving the ongoing shakeout while those that don't will eventually join the growing list of dot.com corpses.

At first glance the statement above might appear to be a sweeping generalization. After all, there are many different types of e-businesses selling a huge range of products and services. In my view though, there is really only one type of business: we are all simply in the “hassle-reduction” business. And so those organizations that provide the greatest level of “hassle reduction” for their customers at the best cost will be the eventual winners.

Some readers may disagree with these remarks and point out that many e-businesses are trying to compete on price or on the uniqueness of their product or service offering. However, I think it's clear from last year's “dot.bombs” that while these differentiation strategies may deliver some short-term success, the only viable long term solution is to provide an outstanding level of customer service.

The failure to meet online shoppers' expectations of service levels is still the biggest problem facing e-businesses today. Unfortunately, this message does not appear to be getting through to many e-businesses. Take the following examples from the many surveys and reports that I published last year:

• In a pre-Christmas survey from resource, 25% of tested Web stores had technical glitches that prevented orders from being placed. [Full article]

• According to the Yankee Group, only 30% of companies respond to emails within 24 hours while Forrester Research claimed that two-thirds of shoppers abandon their shopping carts at checkout due to a lack of human contact. [Full article]

• Early in the year resource also found that only 18% of Web stores had live representatives to aid confused or harried shoppers. [Full article]

• And finally, Shelley Taylor and Associates reported that only 36% of Web stores indicated whether products were actually available before the customer had to provide his or her credit card details and that only 57% of Web stores provided live, online order tracking. [Full article]

So here's the bottom line: poor customer service levels inevitably lead to one thing - the customer clicking away to a competing Web store, never to return. However, because of the high cost of acquiring new customers, e-businesses must learn how to turn first-time site visitors in to new customers and new customers in to repeat customers if they are to be profitable.

I'm going to be focusing on this issue for the rest of the month. Over the next few weeks I'll be taking a look at some Web stores that provide good - and bad - levels of customer service and showing you ways to improve the level of service in your own Web store. And finally, to make things easier for you, I'll also be taking a look at some technologies (many of them available for free) that can help with some of the most common customer service tasks.