With the number of online retail sales expected to grow to a whopping $271.6 billion by the year 2011, companies simply can’t afford to fall out of favor with their Web shoppers. Here’s what businesses need to bear in mind as they strive to keep their customers happy during the holiday crunch:

Manage your inventory. “Adequate inventory is something e-tailers can have difficulties with if they experience a spike in demand,” warned Michelle Warren, a senior research analyst with Info-Tech Research Group.

Keep tabs on your technology. Unanticipated spikes in online traffic can send an e-tailer’s servers crashing — and Web shoppers running elsewhere. For this reason, Warren advised to “consider working with your solution provider to ensure that you have the right amount of technology in place.”

Reach out to consumers. With an increasing number of retailers taking their wares to the Web, companies must reach out to consumers as the holiday season approaches. Marketing initiatives from email blasts to direct-mail campaigns remind shoppers of a company’s online presence and can help drive traffic to a Web site.

Enhance customer support. With more online transactions taking place, more questions and concerns from consumers are likely to arise. E-tailers can prepare themselves by bolstering their customer-support channels. A seasonally-augmented contact center for example, can ensure customers’ queries are addressed within a reasonable amount of time.

Hold off on experimenting. If there’s one thing experts can’t seem to agree on, it’s whether or not companies should introduce brand-new CRM capabilities during the holiday rush. “That’s a big debate,” Warren said. “There’s a whole line of thinking that Christmas is the ideal time to test out new technology, but there’s another line of thought that says test it out when it’s not so busy.” Warren recommended companies err on the side of caution and hold off on deploying that new “live chat” feature, for example, until customer demands have tapered off. If, however, the temptation is too hard to resist, be sure to thoroughly investigate the difficulties that can arise.

Prepare for returns. Christmas festivities are only the beginning of the holiday crunch for today’s e-tailers. After all those orders have been placed and packages shipped, e-tailers should be prepared for a steady flow of product returns.

With the right precautionary measures and technologies in place, e-tailers can secure a permanent spot on Web shoppers’ “nice” — rather than “naughty” — lists.

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The notion that customer service is imperative in a recession got a major boost from a recent study by Accenture.

The New York-based consulting and services firm surveyed more than 4,100 consumers over the summer and found that service — more than price — is a clear differentiator.

According to the online survey, 67% of respondents reported switching companies because of poor customer service, compared with 59% last year. U.S. respondents were even more service sensitive, with 73% reporting that they switched companies owing to poor customer service, compared with 47% switching over lower prices. All indications are that the importance of customer service is only growing. Four years ago, when Accenture first began conducting the annual study, only 48% of respondents said they were switching businesses because of customer service.

“That’s a material jump in just one year and from 48% to 67% over four years,” said Robert Wollan, global managing director of Accenture’s CRM transformation service. “Those are monstrous leaps and trends.”

“There may never be a better or more important time to get closer to customer behaviors,” Wollan said. “The clues are there.”

While a number of factors can have an impact on the customer lifecycle and can get lost in high-level metrics, it’s important to understand how individuals or groups are responding to customer service, particularly in a down market.

“The one-size-fits-all experience will do little to differentiate you to your customer base,” Wollan said. “Customer expectations tend to be by segment or category or sometimes by individual.”

That makes segmenting customers and understanding their touch-points with the business particularly important. Organizations that understand which customer segments make the biggest difference to the bottom line and where to reach them can focus limited dollars on the most effective places, Wollan said.

Meanwhile, consumers are becoming more and more demanding.

Based on the results of the survey, Wollan offers three pieces of advice for organizations seeking to improve customer service initiatives.

• First, organizations should look for insight into the data they already have around customer behavior, which can be quite robust.
• From there, they need to apply that to the customer lifecycle. “It’s not just a spot in time, it’s looking for a trend to anticipate change and looking deeply at the channel preference among that mix of customers,” Wollan said.
• Finally, organizations need to establish their customer service baseline and the diversity of their customer base.

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Service again ranked above price as a global driver of customer churn, according to Accenture’s fourth annual study on customer service satisfaction, titled “High Performance in the Age of Customer Centricity.”

In total, two-thirds (67 percent) of respondents reported moving their business to other companies as a result of poor service in a variety of industry sectors, up from 59 percent of respondents in last year’s survey. Underscoring the sharp increase in consumers switching business providers is an overall erosion of customer loyalty.

Half (50 percent) of respondents in this year’s survey reported that they switched providers in multiple industry sectors during the year, taking an average of $4,000 worth of business with them, by their own estimate, each time they took business elsewhere.

For the fourth straight year, the Accenture study also found that the number of consumers who left because of poor customer experience was significantly higher than the number of those who left a business because they found a lower price elsewhere — 68 percent versus 53 percent. Among respondents in the United States, the discrepancy was even greater, with 73 percent of respondents saying they switched service providers due to poor service, compared with 47 percent who switched providers because of lower prices.

The findings also revealed that consumer expectations continued to increase. Nearly one-third (31 percent) of those surveyed described their service expectations as higher now than one year ago, and 52 percent described them as higher now than they were five years ago.

“Service is no longer just a cost of doing business — it’s at the forefront of the battle for the consumer, whether the business is in Beijing, Boston or Berlin,” said Robert Wollan, managing director of Accenture’s CRM Service Transformation practice. “Consumers around the world are deserting companies in record numbers when they encounter experiences that don’t meet their expectations. The upside of our findings is that companies that can leverage sophisticated analytical capabilities to isolate what really matters to their consumers have the opportunity to quickly differentiate their service experience from that of competitors and grab market share.”

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“CanDoGo is packed full of timely “how to” sales, personal development and motivational advice that answers your questions to help you overcome immediate business challenges. With a true expert community you will set yourself apart every day with CanDoGo at your fingertips. Get concise CanDoGo Insights in video, audio and text formats!”

With categories such as Marketing, Sales Basic, Prospecting, Qualifying, Customer Service and many more, this site is obviously targeted to people who have direct contact with prospects during the pre-sales process and who assist existing customers with service and support processes.

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Generation Y: those born between 1980 and 2000 are here, as customers and as contact center agents, and that has major impacts and implications for customer service.

The Gen-Yers, numbering 70 million in the U.S., are the replacements for the now-retiring and fading Baby Boom generation, from whom they are descended. They are also known as the ‘Baby Boom Echo. Their ranks are nearly twice as large as Gen-X, which are those individuals born between 1964 and 1980.

Bill Durr, Principal, Global Market Consultant, Verint Witness Actionable Solutions, points to several key characteristics of Gen-Y that will affect contact center customer service and CRM strategies…

• This is the first completely electronic generation, immersed in computing and communications technology
• Gen-Yers rely on texting i.e. SMS rather than voice, either wireless or landline
• Gen-Yers are “re-tribalized” i.e. they rely on testimony from those in their networks and that they interact with to get information rather than on advertising and mass media. 28 percent post to their own blogs while 44 percent read blogs on top of participating in social networks.

“Corporations used to be in control of information flow, but that’s all gone,” explains Durr. “This is a profound shift from the mass media and advertising that has been dominant since the 1950s. Those corporations that don’t realize that are going to get blindsided.”

Attempts by firms to employ traditional one-way communications tactics through blogs and social networking sites, such as whitewashing negative comments “will get thrown off the Island,” Durr points out. “Instead they have to put in two-way communications and listen and respond with a genuine authentic voice. If they do then people will buy into it.”

To respond to the demand by Gen-Yers to be listened to and taken seriously in order to get their business, enterprises need to make more recordings more often, listen closer to them, and employ speech analytics to find out the intelligence in the information.

“It is not longer adequate to rely on quality monitoring, whose function is to protect the corporate brand,” Durr explains. “Organizations must understand what customers want and that is the role of speech analytics.

When asked, Durr has not seen firms apply analytics to SMS, given the popularity of this channel amongst Gen-Yers though there is nothing to prevent firms from doing it.

“There are no suppliers that I know of that are offering such a solution but I’m certain that one is coming as this need grows,” says Durr.

Gen-Yers affect customer service from another aspect: agent quality. Unlike previous generations this group accepts that there is no longer any loyalty between employers and employees. They are demanding career advancement and training or else they leave.

At the same time, many Gen-Y workers are not well educated, lack formality in their business communications and do not take kindly to criticism in workplaces because they have rarely been criticized in their growing up.

This is creating a scenario where at a time there has never been a greater need for superior customer service the ability, professionalism, and will of agents is less.

“The entry of the Gen-Y workforce is going to increase training requirements to overcome poor education, including grammar,” explains Durr. “They also need to be taught how to promote the brands correctly. They will also need a lot of more internal quality monitoring to ensure excellent service.”

That leaves open an intriguing question: will demanding Gen-Yers accept the poor quality delivered by other Gen-Yers, or accept it, especially casual conversation, as long as it is sincere? Or will organizations have to adapt in both directions?

The answer may more than likely be the last choice.

“I just had a fairly decent conversation with a young contact center agent the other day, and as we ended it I said ‘Goodbye’ and the agent replied: ‘Goodbye, dude’. And as I hung up I smiled. It didn’t offend me but it is very different from an organization point of view.”

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Customer service may seem like a never-ending process — but that’s not necessarily a bad thing. In the morning keynote at the RightNow Summit 2008 here yesterday, one speaker explained that, for consumers, a superior experience is never intended to be the ultimate destination, but rather like an ongoing journey.

Jim Ferron knows a thing or two about sending consumers on journeys. As senior director of customer operations for Expedia, the Bellevue, Wash.–based provider of travel products and services, Ferron had some real-world stories to share about the importance of creating a multichannel strategy.

“Interactions are not a series of disconnected events. They are part of the overall journey in moving from one place to the next.”

To Ferron, this means being cognizant of the entire customer lifecycle, which includes need, browse, shop, buy, and consume.

That knowledge, he explained, is essential if you want to have any hope of controlling the cycle to the best of your abilities. But it’s important to realize, he warned, that you cannot be perfect every single time. “The faultless journey is rarely [so],” he admitted. “Much of what we’ve done is put work in place to make it ‘as error-free as possible.’ “

While the pursuit of perfection is always a goal of customer service organizations, it is how a company deals with hiccups that will determine its ultimate success. “We need to create escape hatches, so when faults occur we give the customer an opportunity to escape from that fault,” he said.

The way to accomplish this, according to Fellon, is by creating a systematic multichannel strategy allowing customers to be able to find the information they need when and how they want it. However, before spreading out information across multiple channels, it’s imperative to ensure that the information you have is accurate, and to realize that it must be continuously updated. “All knowledge expires,” he matter-of-factly pointed out. “We need to be on the path of constantly learning, and imparting that to our customers.”

Another point of emphasis for Ferron was that companies should look to implement one channel at a time — whether it be chat, email, phone, or Web. “A lot of organizational change has to take place that’s incremental to the actual technology implementation,” he explained. “You need to make sure your processes are buttoned down. By doing it this way, it allows you to pace yourself and learn valuable lessons as you move forward.”

Ultimately, Ferron said, companies must leave the choice to the consumers: How do they want to interact and pursue this journey of customer service? “I hate the term ‘call deflection,’ ” he declared. “We must increase the choice our consumers have in regard to how to contact us. You can’t force customers into a [given] channel…. Give them knowledge that’s dispensable in a way that they want to [access it].”

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Organizations believe that they provide exactly what customers desire. Ask any firm and the Paretto Principle prevails. 80 percent of most organizations believe they deliver exemplary customer service. Ironically, less then 20 percent do. According to research by consultancy Bain and Company, only 8 percent of companies really deliver on customer service.

Our present environment exists with a gap in delivering service. There are numerous reasons for the gap, however, we believe two issues contribute to this gap, a) greed and b) the inability of customer relationships.

Greed

Prior to heightened fees, customer remain for two purposes 1) either first mover advantage in the case of Starbuck’s or 2) value such as American Airlines. Yet when fees increase, customers tend to jump ship for cheaper and more appealing alternatives.

The solution for any firm is to thoroughly conduct an impact analysis to determine potential market losses. New revenue means nothing when you lose a core customer base. Customer dissonance cannot be taken for granted.

Customer Relationships

Customer connections are very difficult to build- that is to say unless you are focused on your core asset. First, as mentioned earlier, an organizations entire strategy must exist for the client. Strategic questions to ask are, “Who is the customer? Why does the customer buy? What is the value that our firm provides? How do reach disseminate product, service and announcements to our customers? These questions all told focus all beliefs, all values and all attitudes for the company asset. Further, it is imperative to treat the client as such- an asset. Nothing happens, no one gets paid and the electricity does not provide power to the plants unless a customer is involved.

Herein are several techniques to align with your clients-

Refrain from CRM. We do not challenge the power and functionality of Customer Relationship Management. Yet too much resource is placed into these trivial software systems. Stop trying to augment human interaction with software. Just like a political candidate if you desire to press the flesh then do so, do not leave an email to chance.

Interaction. The proliferation of the Internet and technology has taken away the most precious asset of any relationship- interaction. Avatars such as Proctor and Gamble and Southwest Airlines discovered long ago that the better part of customer service is being there! Get off your carcass and stop administering start speaking. Make it a plan to meet with your clients as often as possible.

Enculturation. The entire organization must holistically focus on customer service. Everyone must focus on one thing, why you are in business. Exemplars here are FedEx where the culture suggests, everyone’s employment is based on guaranteed overnight delivery.

Value and Brand. There is little doubt that a housewife buys appliances for service. She buys because of the experience others have had. Speed, cost and service become part of the customer experience relative to value. Cadillac and Coca Cola have become industry standards because of this success. Not many claim to be the Taurus of the business.

Avatars and Advertising. When the service you provide is so strong, your established customer base speaks for you. When the time arrives that prospective clients speak higher than your advertising creating new customer arrivals, your customer gap is immensely narrowed. Crocs the apparel company created a billion dollar entity with little advertising.

Value Again it is so important. What does the customer consider value? The default is price but this is untrue. Price is only part of value. The concept of value is complicated and rather than surmise, the only person to respond is the customer himself. Management must refrain from board meetings and speculation, if your organization desires the response then ask the customer.

Feedback loops. In addition to client visits, ensure success with Customer Briefings, Focus Groups, Interview, 360 feedback and other imperative mechanisms. Customer Service is not one-dimensional and requires that organizations connect the dots between what they learn about customers and what they currently offer to customers. This also includes organizational functions and customer response times.

The roads to customer service and customer loyalty are rocky, uncharted and complex. And, today’s competitive matrix further complicates the issues. There are numerous paths to take and numerous bridges that must be built to close the gaps. However, the most imperative is not discussing matters in the boardroom and leaving the issues amongst the silence. Broken promises are the missing puzzle pieces as they become the keys to future growth. Customer gaps are filled when the culture of the organization from top to bottom, exemplify with admiration and energy an emphasis to a key corporate asset- the customer.

Of course I must comment on Drew’s thoughts about refraining from CRM. The problem is that many organizations see CRM technology as the be all end all “cure” to their customer service woes. This, is of course is far from the truth. However, it can not be denied that CRM technology can be a great enabler, (for process improvement and personnel behavioral changes), that can lead an organization toward achieving its CRM strategies, including dramatically improving customer service.

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A survey conducted by Computerworld Hong Kong indicated that users are generally tired of their company’s phone and e-mail systems and are looking for alternatives with increasing enthusiasm.

The survey also showed that 55 percent of respondents were already using instant messaging regularly at work, 42 percent were using videoconferencing and 29 percent were using person-to-person VoIP tools like MSN Messenger, which means that home communication technologies are used in offices.

Another important outcome of the survey was that 91 percent of respondents wanted presence capabilities built right into their corporate applications and 94 percent wanted easy access to voice, video, presence and other tools from within those applications.

As a result, it was clear that unified communications (UC), which breaks down the walls between e-mail, voice, video, IM, presence and other applications, is the thing that many of those dissatisfied two-thirds of companies are looking for.

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Managing the customer experience seemed to be a major priority for many attendees here at the Gartner CRM Summit, where it was the central theme of the opening keynote.

While much of the focus on CRM has shifted to better managing the customer experience, it comes with a significant challenge, according to Ed Thompson, vice president and distinguished analyst with the Stamford, Conn.-based analyst firm.

“How do you measure it? This is the biggest question we get,” Thompson said.

The answer, unfortunately, is not so simple. And it’s not for lack of interest.

Thompson offered seven recommendations from Gartner for improving the customer experience…

Listen, think, do: Many organizations survey more than they ever did before. “Everyone is surveying customers to death, sticking it in an inaccessible database and not sharing it with anyone and annoying the heck out of customers,” Thompson said. Forward-thinking organizations make sure they act on the feedback. Only 5% of companies tell customers what they have done as a result of that feedback, according to Gartner research.

Design process from the outside in: Find the two or three processes that customers care most about and design them from the point of view of the customer.

Use multiple channels: “This is where IT tends to lead the charge,” Thompson said. This is the slowest, hardest work of any of these projects, he said, and the problem is often politics: Who owns the customer and the data associated with it becomes a hurdle.

Be open and exclusive: The combination is possible, according to Thompson. Organizations need to be transparent to their customers while showing them their respect and organizing communities that encourage participation.

Personalize products, services and offers: “As you get to one-to-one [relationships], things tend to get extraordinarily complex,” he said. The Nike Plus, which transmits information on a runner’s time and distance to his iPod, is a product that is simple for the user (just plug it into your iPod) but creates an enormous amount of personalized information.

Alter attitudes: Most executives cite employee attitudes around the customer experience as their biggest challenge, but this is an area where HR can help, Thompson said.

Plan and design the customer experience from scratch: Disney designed the parking lots of its parks with a focus on the customers and getting them out as fast as possible, thereby ensuring the memories that lasted were of the rides and the day, rather than looking for their cars with tired children, Thompson noted. Disney assigns cars to the lot by the time they arrived and provides key-cutting and towing services.

“It’s OK to have different measurements; just get everyone who cares about it together to look at it,” he said.

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In the word’s of the company itself, “Get Satisfaction is a community that helps people to get the most from the products they use, and where companies are encouraged to get real with their customers.”

Here’s what Fast Company recently had to say about getsatisfaction.com in an article entitled, Does a New Website Hold the Secret to Great Customer Service?:

Can online networking deliver us from the evil of bad customer service? Thor Muller is betting that “people-powered customer service” will trump outsourcing and the impersonal call center.

Muller is CEO and co-founder of getsatisfaction.com, a user-driven customer service community. Launched in September, 2007, the site provides forums where customers discuss problems with products and services of 2,500 companies from Apple to Zappos — whether the company participates or not. So far, the site has drawn more than a million unique visitors.

The article goes on to discuss with Muller why customer service is the new marketing, why you should bring edge users into the core of your business, and how a company you might expect to get it (Facebook) and one you might not (Comcast) are taking very different approaches.

An article in the New York Times, On the Internet, Everyone Can Hear You Complain, noted…

The Internet is rife with sounding boards for the disgruntled, who have their choice of blogs, sound-off sites like Yelp and Epinions, and dedicated customer service sites like Get Satisfaction, PlanetFeedback and Complaints.com.

All this venting can bring about some productive results — happier customers, resolved disputes — but it remains to be seen whether the sites that serve as intermediaries can actually turn a decent profit.

Complaints.com and PlanetFeedback make money from advertisements; the founder of PlanetFeedback, Pete Blackshaw, said in an interview that he made little money from the site but ran it mainly as a hobby. Matthew Smith, the founder of Complaints.com, said his site was profitable, but would not offer specifics.

Get Satisfaction, which is backed by venture capital and aims one day to be financially stable, has little if any revenue and has not decided if it will sell ads; rather, its goal is to persuade companies to buy the software it has developed. The software helps companies communicate with customers. It also organizes data about the people talking about their products and what they are saying.

For now, companies that want to use Get Satisfaction can grab a free application, or widget, from its Web site and put it on their own sites. The software code in the widget then directs customers to the dialogue on Get Satisfaction. As with many start-ups, Get Satisfaction hopes to build an audience first and make money later.

The company asserts that the Internet can lead to better customer service dialogue — if people make reasonable complaints, customers can help one another solve problems. It can also make companies more open to acknowledging their mistakes and to fixing them.

There are so many new “social/community” sites coming on line that it’s hard to keep up. Needless to say, like the first internet bubble, there will be many failures and a few big successes. I think it’s just too soon to tell the winners from the losers.

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