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Every time it looks like e-commerce companies are going to give their "old economy" competitors a serious run for their money, the customer service issue arises to spread fear, uncertainty, and doubt.
At press time, the 2000 holiday shopping season looks to be a record-breaker for e-commerce retailers. According to several market research companies, more people than ever appreciate the convenience of online shopping. For example, Jupiter Research reports that 40 percent more people visited e-tailers during Thanksgiving week than in 1999, and Forrester Research estimates that e-customers will double their online spending during the season to the tune of $10 billion. Furthermore, in late November, the U.S. Department of Commerce predicted that we should expect a "significant increase" in online shopping for the 2000 season. And to extend this argument with purely anecdotal (and bittersweet) evidence, Amazon.com crashed for approximately half an hour in late November because of heavy holiday browsing and shopping.
Clearly, there's more oxygen available for struggling B2C e-commerce companies, which have been lambasted by analysts and media throughout 2000 as one-hit wonders.
That's the good news. The bad news is that many of these companies -- even if they survive the holiday season -- will be submarined in the new year by lackluster, inattentive customer service.
Try, Try Again
There are plenty of reasons to temper any new enthusiasm, not the least of which is the latest American Customer Satisfaction Index (ACSI) ratings (see www.bus.umich.edu/research/ nqrc/acsi.html), which have been published on a quarterly basis since 1994 by the University of Michigan Business School and the American Society for Quality. The ACSI purports to be unique in implementing a patented methodology that measures customer satisfaction based on the monetary value of the customer relationship. It is also the only index that compares customer satisfaction across industries as well as companies.This edition, which focuses on e-commerce and manufacturing nondurables (the index addresses a different industry sector each quarter), suggests that e-commerce companies overall have a slightly better record than the entire ACSI average (73.2 vs. 72.9). However, a drill-down to the details reveals a fractured customer-satisfaction picture: a few peaks of excellence amid a plateau of mediocrity.
The star of this quarter's ratings is Amazon.com, which perhaps to few people's surprise garnered the highest score (84) among e-commerce companies. In fact, the e-tailers as a whole did rather well, outscoring their brick-and-mortar counterparts on average. (Similarly, online brokerages managed to stay a few tenths of a point ahead of traditional banks.)
The problem, however, is that ACSI director Prof. Claes Fornell, who developed the index's model, believes that these scores should be much higher given the convenience of online shopping. And in the report's introduction, he goes out of his way to point out that "Even though e-commerce provides higher levels of customer satisfaction overall, this is not true for all e-commerce companies." (Portals in particular scored rather poorly.) His commentary includes the sage advice that "E-commerce is not just about attracting new customers. This is for naught, unless customers come back and buy again."
Hold on Tight
Therein lies the rub. Many companies are banking on this holiday season to give them a few more precious months of life, but they should be aware that success will be fleeting without the ability to meet customer expectations. (Remember the fulfillment fiasco of late 1999?) Prof. Fornell sums it up best: "The key to success is obviously to attract and keep [my emphasis] customers. To accomplish one without the other does not help."
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