October 4, 1999 Howard Rosenbaum hrosenba@indiana.edu

Customer Service for Electronic Commerce: A Driver of Organizational Change October 4, 1999 Howard Rosenbaum hrosenba@indiana.edu Center for Social Informatics School of Library and Information Science Indiana University http://www.slis.indiana.edu/hrosenba/www/Pres/11pdc/index.html

I. What is customer service? • Two views II. Using web-based customer service • A model of web-based customer service • Examples III. Web-based customer service and organizational change • Cultural • Process-oriented • Technological • Structural

I. What is customer service? Ecommerce changes the way business is done by: Shortening time to market Reducing costs of marketing, sales, and after- sales activities Encouraging new relationships between firms and customers Creating a digital supply chain, and Improving the ROI on marketing and advertising

Etailer (US/Canada) will be worth $36.6 billion (1999) (Thompson, 1999) European ecommerce revenue will be $430 billion in 2001 (55% of US ecommerce revenues) (Andersen Consulting, 1999) UK ecommerce will generate $15 billion by 2000, up from $4.8 billion in 1999 (NOP Research, 1999) Ecommerce will generate $3.2 trillion globally by 2003 (5% of global sales revenue) (Forrester Research, 1998) Business-to-business ecommerce generates 2-3X the revenues of business-to-consumer ecommerce US b-2-b ecommerce will be worth $$1.5 trillion by 2004 (ZDNet, 1999) [All estimates in US dollars]

Two views of customer service: the firm It is at the end of the value chain (Porter 1985) The activities needed to keep a product/service working for the buyer after it is sold and delivered It is a linear process with three phases separated by time Pre-transaction: organizational buy-in and preparation Transaction: minimize the time between ordering and receiving the product Post-transaction: customer care It is a set of activities a firm engages in to win and keep customers over and above assembly and sale activities

Two views of customer service: the customer This is a life cycle model with four stages Assessment: do I need the product/service? Acquisition: how and where can I buy it? Ownership: where the product/service is used Retirement: should I get another one? If the customer engages in another transaction, the cycle begins anew She can be at different stages of the life cycle at any given moment if she has purchased different products from the firm at different times

Firm and customer views of customer service

Ecommerce companies are competing to acquire customers - one at a time (Sterne, 1996) ...Look at how you can focus all of your IT investments behind a single, winning strategy: make it easy for your customers to do business with you! (Seybold, 1998) Online the balance of power shifts toward the customer... If...a customer [is] unhappy, they can tell thousands of people….if [they are] happy, they can also tell thousands of people. With that kind of megaphone in the hands of every...customer, you had better be a customer-centric company (Bezos, 1999)

Questions: What are some common strategies used by ecommerce firms to provide customer service and support? How will customer support processes contribute to the “stickiness” of ecommerce web sites? How will organizations change to accommodate the demands and requirements of web-based customer support?

A model of web based customer service Solitary Interactive Email support Opt-in mailing Conferencing (Lists and newsgroups) Webboards Autoresponders “Pushed” content Asynchronous Knowledge base FAQ/Help pages Streaming video VRML/QT files ----------------------------Tracking systems Order verification Accessing accounts and profiles Comparison pricing -----------------------------Chat Instant messaging Live webcasts “Call-me” service Synchronous

Solitary asynchronous options Autoresponders deliver files to customers Fortune Magazine’s “Fortune Investor” http://www.fortuneinvestor.com/help/help_main.asp Some autoresponders understand customer email, send an appropriate answers, and directs email that they cannot answer to the appropriate people American Finance and Investment www.LoanShop.com

Solitary synchronous options: static Complex knowledge bases allow searching for technical information from multiple access points Microsoft Product Support Services http://support.microsoft.com/search/default.asp Help pages can be customized One site has an international clothing size conversion chart, a metric conversion chart, and an explanation of global shipping rates, available in several languages eOFFprice http://www.amoff.com/

Solitary synchronous options: dynamic Customers access files such as purchase histories, address books, special occasion reminders and account settings, all but the first can be edited Amazon.com www.amazon.com Or managing portfolios and conducting real-time research E*Trade http://www.etrade.com/ Or real-time tracking of orders and shipments FedEx http://www.fedex.com/ United Parcel Service http://www.ups.com/

Interactive asynchronous options The most popular option is email used by customers to communicate with the firm and other customers One site has email links to the Cork Dork, the Food Dude, the Recipe Queen, and the Webmaster Virtual Vineyards http://www.virtualvin.com/exec/query?page=file&file=shop/ contact.html Firms distinguish themselves by the speed of their response - one promises a response to technical support email within 24 hours Roxy.com http://www.roxy.com/commerce/roxy.cgi?url=roxyhome

Interactive asynchronous options A listserv mailing list or USENET newsgroup can be used by customers and the firm to discuss specific products and services SBBS www.sbbs.com A webboard moves the computer conference to a web page, where participants’ postings are added in a threaded, sequential manner Nemetschek http://nemetschek.com/

Interactive dynamic options Firms are experimenting with real-time chat with customers CDE Software http://www.cdesoftware.com Some are trying live webcasts for customer service: technical support webcasts for registered users Microsoft support.msn.com A “call me” button is a link connecting a customer to a customer service representative over the telephone while the customer remains on the web site The First Internet Bank of Indiana http://www.firstib.com/customer_support/

A commitment to customer service is a commitment to organizational change Customer-initiated transactions begin an information flow that impacts on sales, marketing, inventory and suppliers, support and service, accounting, quality control, and delivery logistics, and the web team “Islands of information” and “information silos” where information is tightly controlled impede the flow Valuable information will be lost unless the web site is integrated into back end systems There must be easy and rapid information exchange occurring in real time among organizational units

A culture is needed which embraces at least the following: What business units do is done for customers, whether or not the people in the unit have direct interaction with them From the initial visit to the web site through the full range of interactions a customer has with the firm, her experiences should be fast, efficient, informative, and transparent People having direct contact with customers should be encouraged to listen and to respond quickly and effectively

Replace the stereotype of the customer with a more complex, segmented and multi-faceted picture If employees believe that all customers are the same, this information will be discarded and useless Continually solicit customer feedback Negative comments help the firm understand what works on the site and in the customer’s ecommerce experience, what is problematic, and what can be improved To ensure that this information is used, people should be responsible for following each instance of feedback from initiation to resolution

Customer information is essential to business success and should be shared widely throughout the organization Customer service representatives should have easy access to this information whenever they interact with a customer Product development people should also have access as they work on versions of the firm’s products and or services Efficiencies and innovations in dealing with issues of customer information and service should be rewarded

Changes in business processes and workflow Web technologies reduce costs by making certain business processes faster, more efficient, and less expensive Others (building brands, marketing, customer loyalty and service) become more expensive By examining the processes and activities involved in doing business on the web, firms can streamline and adjust them to better support ecommerce activities. To do this, they need to understand how customers actually do business with them and how employees do business with customers

An adequate set of metrics is needed for measuring successful web-based customer service Reliable processes are needed to capturing data for these metrics Metrics exist for offline customer service (ex: call centers) but have not yet been developed for the web Existing metrics may be easily adapted for ecommerce, but this effort is not yet underway There is a need to develop benchmarks of web-based customer satisfaction so that they can be compared to those that have been gathered for years for call centers

Technical changes There must be an infrastructure to support a large and complex web site It must support various combinations of solitary, interactive, asynchronous, and synchronous customer service options Ecommerce also requires a high level of system integration linking the web front end to the firm’s back end systems Web-generated customer information has to flow to appropriate business units in real time to create and maintain product knowledge bases and dynamic customer profiles

Structural changes Job responsibilities will change with new positions added and old ones dropped To manage web-based ecommerce, there should be three teams: Content Technical Sales and marketing

A technical team which has the primary responsibility of designing and maintaining the web site A webmaster works with programmers and database designers The goal is to continually improve the site in response to customer input, competitive analyses of rivals, and changes in technology

A content team responsible for publishing the site A team needs at least a technical writer and a graphic design specialist In a larger firm, these positions can be managerial The technical person oversees a distributed publishing process The graphics person works with the outside design firm

A marketing and sales team which has responsibility for the ecommerce activities on the site A manager is responsible for high level activities Marketing and advertising strategy, working with the other business units that need information from the web site, and determining customer service options Team members might include a customer profile and knowledge base manger, a customer service manager, and a web site information analyst

Relationships among the teams will have to be worked out There may need to be a manager who is responsible for coordinating the teams Also, the entire ecommerce division will have to be placed in the organizational structure To whom will they report?

October 4, 1999 Howard Rosenbaum hrosenba@indiana.edu