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Service and Its Indispensable Roll in E-Business - Three Steps for Gaining and Maintaining Loyal Customers on the Web. by C.J.Tidby

In traditional local stores, customers returned due to location, price, product quality, and service. For both corner stores and companies selling on the Internet, service has become the customer-winning key.

The Internet is, of course, a very different selling environment than the traditional brick-and-mortar storefronts. On the Internet, comparable products are available from several companies at similar prices – each only a click away from the other. Although convenience is a distinct advantage of Internet shopping, it is significantly more difficult to develop personal relationships (and thus loyalty) on the Web. Differentiation on location, price, and product quality are not easy to achieve, so service has to be the way of gaining return business.

Return business is essential for the success of an Internet company not only for the purpose of differentiation; it is necessary for the maintenance of lower costs and higher margins. The significant time and resources associated with getting new, potential clients to view a site make it crucial to entice established customers to return.

Unfortunately, impressing Internet customers and transferring that into loyalty, is also more difficult on the Web. According to Zemke and Connellan, authors of “E-Service”, the relationship between customer satisfaction and repeat business is non-linear. Only “highly-satisfied” customers are more than moderately likely to purchase again.

Online or off, repeat customers are the main means of survival for any company. The question is therefore, how can an Internet business exceed customers’ expectations in order to entice them to return to the site to purchase again? Below are three easily implementable steps for gaining and maintaining loyal customers on the World Wide Web.

Three Secrets for Gaining and Maintaining Loyal Customers on the Web 1. Quick and personalized communication: Consumer confidence with Internet purchasing has increased substantially in the last 5 years. There is, however, still a high degree of anxiety, particularly when dealing with a company that has no brick-and-mortar counterpart. Without confidence that the business is reputable, few customers will purchase.

Responding to customers within the hour whenever possible gives them a sense of security – the customer knows that there is someone available within the company to deal with their concerns quickly. According to Giga Information Group (Cambridge, MA), in 2002 only 18% of the companies they sampled respond to questions within an hour; Neiman Marcus, the department store (www.neimanmarcus.com) ranked first, taking only one minute to respond to a question. It took twelve hours on average for companies to respond and 10% did not respond at all. These numbers are startling, but illustrate the ease with which businesses can create communication advantages over competitors.

Of course, a quick email is not enough. The ideal Internet communication will be: a) Consistent in voice and image. Email communications should be formatted consistently and should mirror the look of the company website. This can easily be developed through database templates. b) Personalized and relevant. Be sure to respond to clients’ particular questions and take note of any personal information they offer. If you know the customer is interested in a product for a birthday, for instance, be sure to mention it in the response. Customers have begun to not expect personalized care on the Internet and for this reason, efforts to communicate on an individual level will not go unnoticed. c) From varied methods. Even if the emails emitted by a company are perfectly scripted and fast, some customers will still need to hear a voice at the other end of a telephone. Ensure you have a toll-free number and contact your clients via the telephone if there is any confusion with an order, if a customer seems nervous, or to solidify a large deal.

2. Door-to-Door Service. From the time the customer shows interest in a company’s products, until the time the product has been delivered, set up, or consumed, the customer must feel that the company is highly involved in the process. A great example of this is Lobster Pot Direct Ltd, a live lobster delivery company (www.lobsterpotdirect.com) that supplies seafood to parties of any size, tracks shipment via FedEx, emails the clients when the lobsters are about to arrive, and sends storage, cooking, and eating instructions. Minimum steps that need to be followed are: a) Order customization - Offer clients the option of customizing their shipment and become a part of their purchase. Find out who they are ordering for and why they would like different options. b) Shipping information - Give them access to manufacturing and shipping status. Many companies (ex. Office Depot at www.officedepot.com) offer direct links to their shipping providers’ site. c) Follow up on the shipment and ask for feedback – Ensure that the shipment arrived and that customers are satisfied with the product. Asking for feedback to “improve future service” gets customers to consider the process and will act as a reminder of their satisfaction. If negative feedback is given, be sure to act on it.

3. Database Maintenance – Companies must use the information attained through the first two steps to get to know their customers. Most Internet companies have purchased expensive databases, but they are often not used to their full potential. Ideally, Internet companies should focus on the following points: a) Capitalize on their database – Databases should be used to keep track of what clients purchased and when. On the anniversary of a purchase, or when a product would likely be running out, offer to ship a new one. Whenever possible, set reminders prior to family celebrations, anniversaries, and birthdays and if applicable, offer a special price on your product. This makes the customers’ job much easier. b) Develop tiered pricing and specials - Repeat customers should be given “VIP Access” on the company website with discounted pricing. They should also be sent pertinent updates on current web specials for particular holidays or events. North West Airlines (www.nwa.com), for instance, sends their customers weekly emails with weekend specials. c) Don’t Overdo It - The easiest way to lose a customer is by overwhelming them with email. Internet-based companies need to make sure that their emails are targeted and not too frequent. Once a month is a safe time frame.

Conclusion The lifeblood of an Internet company is the repeat customer. Exceptional customer service is essential for developing lasting relationship on the web and offers a reasonably inexpensive means of differentiating a company from competitors.

Three steps for improving online service are quick and personalized communications, door-to-door service, and the maintenance of an information-rich database. By knowing their customer and ensuring that the customers know them, Internet companies are more likely to attain repeat purchases. When used properly, the Internet is an ideal medium for developing long-term relationships.