When it comes to e-commerce, Internet businesses are discovering a surprising truth - computers can't replace the human touch.
"Just goes to show what a numbskull industry this is," said Lori Orlov, an analyst at Forrester Research in Cambridge, MA. "The fact that it suddenly dawned on them that people have questions and that a Web site doesn't cover all the issues, is pathetic."
While lots of Web sites have you e-mail them queries or comments, the response statistics are abysmal. About half of the 125 top Web sites fail to respond to e-mail or take five or more days to do so, according to Jupiter Communications. The result is that two-thirds of shopping carts were abandoned on these sites. Not a good thing for revenue, that all-important number that determines success in the Internet world.
To solve this problem, a number of companies have developed "live chat" software that enables a customer to type in a query and get a response from a person at the other end in a matter of minutes or sometimes, even in a few seconds. Companies providing this type of interactivity include LivePerson, NetEffect, Acuity Corp. and Webline. There are also companies like PeopleSupport, Inc. and Stream International that also supply customer service representatives - now acquiring the moniker "e-reps."
People Who Need People
While only 1 percent of e-commerce sites have e-reps, analysts expect that within a year, 90 percent of sites will offer this option, because conversion rates - the ratio of looking to buying - improve dramatically with live chat. The industry average is 2 percent, but LivePerson, for instance, says that clients using its software are seeing conversion rates zooming to as much as 30 percent.
TeleSales Inc., a company that outsources e-reps, has even more startling statistics.
"With e-mail interaction, we found the conversion rate to be 4 percent. With a call center that goes up to 36 percent. But with live chat, it's a dizzying 51 percent," said Bob Baker, vice president of technology partnerships at the Wilmington, MA-based company.
Functions such as live chat offer the possibility of generating even more sales. TeleSales's Baker gives one instance of this.
"This consumer wanted to order a $600 outdoor grill so he got on to live chat, asked all these questions and decided to buy it. Right then, our e-rep figured, 'If this is someone willing to shell out big bucks like that, why not offer him another item, like these two solid redwood chairs for $1,000-plus?' And guess what? That pitch resulted in a successful sale, right there and then."
Is There Anyone Out There?
More than a call center, an e-rep's skills are more suited to a consumer who is computer literate and recognizes the opportunities the Web affords. TeleSales Inc., which began as an e-rep provider in 1997, recognized that.
"We realized that this space is so different, we need to have a different hiring profile," Baker said. "The rep is usually college educated, more savvy and of course more tech-oriented."
E-reps guide the consumer by answering all sorts of questions, from explaining waist sizes to tracking down items the consumer might have seen on television but not remembered exactly.
"When people talk about abandoned shopping carts, most people seem to think that consumers are afraid to put in their credit card and that's the point of abandonment," Baker said. "But that's not the case. Only 16 percent do that. The other 66 percent who leave the site without a purchase do so because of unanswered questions."
Who ever figured that live customer service would become so important to e-commerce?
"All these sites expect too much of a consumer, forget a consumer shopping online," said George Russell, President and CEO of E-Commerce Solutions, the Internet's leading developer of retail "e-partment" stores. Russell recalls a time he worked for a company that sent out millions of cash refund vouchers to their customers. The customers had to fill in these vouchers with a few basic things like their date of birth, and address among other things.
"Less than half were filled out correctly, and that was such a simple thing to ask," he reminisced. "Imagine going to a Web site and navigating all that stuff without any help?"