Customer Service in Dotcoms MS&E 269 Special Presentation Feb. 28, 2001 Team “Just kill it!” Vicki Chin, JC Choi, Ying Mei, Wonhyoung Ryu

Why is Internet Service Important? Source : Greenfield, 2000

Number of Online Retail Packages is Expected to Grow Steadily Source : Forrester Research, 2000

Customer Service is Often Neglected

Reasons Users Enjoy Online Shopping Source : Greenfield, 2000

What is your worst online experience ? Company.comWhy?

Dotcom “Service” – Current Situation Slow speeds Unfriendly user interfaces Security and privacy concerns Broken links Poor content Unanswered phone calls and s Deliveries – wrong products, long lead time, high shipping costs, handling damage

Response Times Drag On Source: “To Bot or Not to Bot?” Business 2.0, March 6, 2001

Source : Anderson Consulting, 2000 Online Retailers Are Not On-time

Why Do Customer Service Problems Persist In Dotcoms? Money - Short term investment mentality - No profit and stock euphoria - Too expensive to implement for small company - Too much $$ spent on marketing for small returns

Why Do Customer Service Problems Persist In Dotcoms? (cont’d) Suppliers & Partners - Too many suppliers - Weak and small suppliers - No quality control and feedback - Bad coordination with delivery service suppliers (UPS,FedEx,...)

Why Do Customer Service Problems Persist In Dotcoms? (cont’d) Other Reasons - Customer feedback is hard to get - ARPANet – Internet originally not designed for consumers - Technology maintenance is difficult - Too wide range of customer - Intangible quality & no standard developed

Is the Internet a Service or a Product? What distinguishes the Internet from Brick & Mortar Companies?

Approach to Quality in Dotcoms Garvin’s Model –Is the Internet analogous to manufacturing? User-based Approach –Shift of power from retailer to customer –Shift from the Manufacturing-based to User-based Approach

Dimensions of Quality (Garvin’s Model) Performance –Speed –Checkout time –Delivery time –Ease of use –User interface Features –Content: product info, user reviews –Product variety –Personalization

Dimensions of Quality (Garvin’s Model) Reliability –Order fulfillment in time specified –Technical reliability –Security and privacy –Stock availability Conformance –QoS on Internet = QoS offline –Same level of service for users of different locations –Standards of Web Design (Cross platform issues)

Dimensions of Quality (Garvin’s Model) Durability –Lifespan of a Dotcom’s service –Consistency of content and site organization Serviceability –Responsiveness to questions (MTTR) –Ability to serve concerns online –Merchandise returns –Warranty

Dimensions of Quality (Garvin’s Model) Aesthetics –Site design Perceived Quality –Brand name (real world counterpart) –Word of Mouth –Media coverage, ad banners

Competing on Quality and Trade-offs Segmentation Strategy Aesthetics vs. Speed –Boo.com Customer Feedback vs. Privacy –Doubleclick.com Features vs. Cost –Kozmo.com Features vs. Reliability –Cars.com

What are dotcoms doing today to improve customer service? CRM software –ByeByeNow.com Naturalized language searches –Developed by Ask.com, Neuromedia.com Outsource customer service (pros/cons) –LivePerson.com, eAssist.com Survey method improvement Smarter marketing –eCrush.com

Customer Relationships in the Old Economy vs. New Economy Source :

Recap of what we’ve said Current situation: –Customer Service is pathetic! Why? –Money, Suppliers & Partners, Feedback, T echnology  Quality is often intangible Defined Quality using Garvin’s Model Quality Tradeoffs What Dotcoms are Doing Today

Suggestions for Improvement Dotcom company changes –Mindset change –Hiring experienced management team –Motivate employees Technical improvements –Security –Speed –Ease of use Suppliers & Partners –Delivery service partnerships –Suppliers (back-end systems providers)