Faster than faxing and cheaper than phones, electronic mail is changing the face of customer service. Below, Inc. addresses basic issues about on-line customer service, as illustrated by Communications Marketing and Distribution (CMD), a $6-million Atlanta company that warehouses promotional materials for a number of large companies.

Ten of CMD's 20 largest accounts are hooked into its E-mail, allowing the sales and marketing people at those companies to place orders for items such as brochures directly into CMD's system -- and leave an electronic paper trail. "Customers can order anytime of day and add to the purchase," says CMD president Mark Nedza. "It's a whole different way of doing business."

How does it work? CMD receives purchase orders, answers customers' questions, and sends invoices long-distance via MCI Mail and its resident E-mail software, Microsoft Mail (chosen for its compatibility with MCI Mail and various E-mail software packages that CMD's customers use). When CMD adds a customer's E-mail address and software type to its Microsoft Mail list, messages arrive at a recipient's computers as if sent through interoffice E-mail. To win over hesitant customers, CMD takes care of the technical details and the cost of MCI Mail message charges.

Isn't it expensive? Actually, it can be cheaper. In the past two years, while CMD's sales have tripled, its phone bill has dropped from $1,200 to $900 a month, says general manager David Jacobson. He figures CMD's phone bill would be about $4,000 each month without E-mail. Other monthly costs: MCI Mail is $900; the dedicated phone line runs $25.

CMD dedicates one person, on $35,000 salary, to manage the E-mail half time. Sans the E-mail hookup, CMD estimates, it would need at least three more customer-service reps to handle the same business.

Who uses it? Twenty CMD staffers -- eight sales reps, seven customer-service reps, and five executives -- process more than 7,000 messages each month, including invoices, purchase orders, supplier updates, reports, and questions. Can your fax handle that load? -- Phaedra Hise

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The Cost of Communicating
$20,000 begets: one customer-service rep, or two years' worth of MCI Mail*, or one month of service on a private $1-million fiber-optic voice-data network.**

*Based on CMD's usage **Based on the only small company we know that has such a network

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