In an age of competitive fever and instant communication, customers have learned to expect the world. Remarkably, the great new customer-service providers are giving them more

It was a night that Glenda Stone won't soon forget. Close to midnight, the musical chiming of the pager that she keeps at her bedside woke her from a light sleep at her house in Reno, Nev. One glance at the clock, and she knew that somewhere a customer was in trouble. Stone grabbed the phone to check her voice mail. A customer had left a message. He was in a panic, his words barely decipherable. Stone returned the call at once.

"Please, sir, try to calm down," she recalls saying, as she did her best to soothe the customer. But the man roared, "Do you hear me? I don't have a door!"

Stone moved with dispatch. She dialed into the computer network of her employer, Relocation Management Resources Inc., known as RMR, whose business is arranging all the details of transporting household goods for companies that are relocating their employees. She noted that the customer, who was living out of a suitcase in a hotel room, was waiting for the rest of his worldly possessions to be hauled from the Midwest to his new apartment in the South. One problem: the apartment didn't yet have a front door.

"Don't worry," Stone told the customer. "We'll do whatever it takes to stop the move." After calming the customer down, she halted the delivery in its tracks. It was 1 a.m. Mission accomplished. Wide-awake, Stone didn't bother going back to bed. "You take a shower and go to work," she says.

Stone's workday typically starts at 5 a.m. She is one of six troubleshooters in RMR's customer-service department. Having at least one contact person on duty at all times -- days, nights, and weekends -- is a cardinal company rule. It reflects RMR's devotion to customer service as the central tenet of its business strategy, says president Bob Carbonell. But if the level of service that RMR offers is extraordinary, the company's resources are not. Its staff totals 40, and its revenues last year were just $12 million. RMR's stunning 600% growth since 1995 is in "direct relation to the reputation we have for being fanatical," says Carbonell.

Welcome to the new world of fanatical customer service, where even small companies never sleep and no request is too ridiculous. That intensity is evident among cutting-edge companies, such as RMR, and reinforced by a chorus of business consultants. Patricia Seybold, CEO of a Boston-based firm that bears her name, is one such consultant. In her new book, The Customer Revolution, Seybold writes about businesses that are obsessed with every facet of customer service.


In the new world of fanatical customer service, even small companies never sleep and no request is too ridiculous. That intensity is evident among cutting-edge companies.


These days new buzzwords -- such as tier zero, which refers to a customer-service system that's so proactive that it anticipates a customer's every need -- suggest that views of customer service are in flux. Companies in the vanguard are using the Internet and other technologies to further their customer-service mission. One of them, FultonStreet.com, an online retail fish market based in Westbury, N.Y., is no jumbo corporation. Yet with just $2.7 million in sales, it maintains a live chat room on its Web site, zapping answers to customers' queries almost instantaneously round the clock.

ScriptSave, a company based in Tucson that manages prescription-drug-benefit programs, has even created its own currency, called Bravo Bucks (redeemable for gifts), that's awarded to employees who excel in providing customer service. "Maybe we go overboard, but this is a big part of our culture," says CEO Charlie Horn, whose picture is plastered on the $10 Bravo.

Nothing quite like Bravo Bucks is in effect at Phase II, a chain of eight personal-training centers based in Raleigh, N.C. Phase II's CEO, Wade Harris, is pumping up his customer service in other ways. The job of Phase II's trainers, who provide one-on-one attention to customers at the training centers, extends beyond the gym. If a customer, say, is on his way to an appointment and his car has a flat tire, a trainer is expected to rush to his aid. One 68-year-old woman who doesn't drive gets a lift home from Phase II with a gym employee. At monthly staff meetings Harris salutes his trainers for their acts of service. "Once new trainers see what the other trainers are doing, they look for opportunities so that they're not left out," says Harris, whose company did $1.5 million in sales last year.

Ardent dedication to customer service may prevail at Phase II, but how widespread is that spirit around the country? Although good statistics are hard to come by, studies show that customers are demanding better service in general. And there are indications that some managers are responding. Roland Rust, a marketing professor at the University of Maryland and coauthor of last year's Driving Customer Equity, says that companies increasingly see the link between customer service and "retention, loyalty, and increased sales."

Whatever its value, fanatical customer service doesn't usually come cheap. Yet examples abound of companies that have bootstrapped their way to success. FultonStreet, for example, didn't start with a policy of round-the-clock service. The company worked its way up to it. "It doesn't take money to get good customer service," says Stratis Morfogen, CEO of FultonStreet. "It takes a commitment."

The drive to revolutionize customer service at small businesses like Morfogen's has led company leaders to blaze new paths. Among the most dramatic are what you might call the 24-7 clock, the human touch, real-time feedback, and proactive pursuit. Here is a look at how six companies have zealously put one or more of the strategies into effect -- and the results they have achieved.

Path One: The 24-7 Clock
At FultonStreet.com, Morfogen didn't have to agonize over whether the company should offer customer service 24 hours a day, seven days a week. For him the issue was never if he should do it but how. "E-tailing is 24 hours, so customer service should be 24 hours. Otherwise, it's like having a 7-Eleven store with no one at the counter from midnight to 7 a.m," he says.

That's not to suggest that Morfogen started his online fish retail business in grand style. His original digs were about as fancy as New York City's unvarnished wholesale fish market, for which his company is named. FultonStreet had 100,000 square feet of space in an old warehouse near the 59th Street Bridge in Long Island City, on the edge of Queens. From there it's a 10-minute drive to the Fulton Fish Market, where, starting at the age of four, Morfogen spent many a morning. He would help his father, a Manhattan restaurateur, prowl the stalls to select huge quantities of lobsters, oysters, and salmon.

Filled with lobster tanks and freezers, the cavernous start-up space cost Morfogen nothing, owing to the generosity of an angel investor. The facility neatly summed up his approach to customer service: think big time but operate on a tight budget. His adoption of a 24-7 schedule didn't happen right away. At the company's launch, in late 1997, the company's only staffers were Morfogen and Tony Psaltis, an old family friend and former foreign-service officer.

Together Morfogen and Psaltis did everything, including answering customers' calls and E-mail messages. When business picked up a bit, they hired a New Hampshire call center, which specialized in CDs and books, to handle customer service. Big mistake. They found out they needed an expert in answering questions about, say, how to deal with a live lobster. So Psaltis became director of customer relations and hired a few people to cover the phones. By late 1998 the company was enjoying a steady stream of orders. At the same time, customers' requests began pouring in by telephone and E-mail (all of which FultonStreet now claims to answer within one hour).


At RMR, six customer-service reps are fair game for calls round the clock. Even the company's president invites customers to call his cell phone at all hours.


By 1999, Morfogen was living up to a vow he had made to himself on the day he started FultonStreet. He began assigning at least one employee to respond to customers' requests at all hours of the day and night. Today the customer-service staff consists of five full-time and part-time employees, who take turns on the late-night shift. And both Morfogen and Psaltis still pull late-night and weekend duty at times.

In a sense Morfogen is always on duty. The CEO recalls receiving a befuddling order in the wee hours from a man in Alaska who wanted next-day delivery. Morfogen took the call at home from his customer-service rep and advised him about how to proceed. The customer lived practically in Siberia, in an area so remote that his order would call for special shipping arrangements. The fastest possible shipment would require five days and the use of three planes. "We got it there" at no extra charge to the customer, recalls Morfogen, even though it wasn't quite next-day service.

In January, FultonStreet moved into a new facility in Westbury, N.Y., and Morfogen reluctantly cut back the customer-service hours to 10 hours a day because of technical and staffing problems. The company is to resume its usual 24-7 schedule this month, he says. Although FultonStreet receives few phone calls after 10 p.m., Morfogen says that the round-the-clock service is still worth it because most calls yield orders averaging $200 each. "Customer support is very important to closing the deal," he says. "If it were just an answering machine, we would have no orders at night."

Unlike Morfogen's graveyard-shift employees, workers at RMR are merely on call at night. Glenda Stone and five others in Sparks, Nev., are all fair game for customers' calls round the clock. But there isn't a soul among the 40 employees who hasn't helped a customer long past quitting time, says Carbonell. Even he and his top executives invite customers -- mainly relocation managers at large corporations such as EMC and Merrill Lynch -- to call their cell phones at any hour. Carbonell, who drove a moving truck and hoisted boxes in the 1970s, says he was heavily influenced by the service ethic he saw at EMC, which is on call 24 hours a day for its customers. His feeling was "How could I offer anything less?"

Today Carbonell has a full-time customer-service staff on board at his call center year-round. From Memorial Day to Labor Day (the most popular moving time) his staff must put in long hours during the day, plus they are on call evenings and weekends. Of course, Carbonell could hire temporary or part-time workers as customer-service staff for the busy season. Instead, he allows his workers to recover from the rigors of the summer by working eight-hour days the rest of the year and taking a few extra days off.

Each RMR customer-service rep -- a "move counselor" in the company's jargon -- is responsible for just a few corporate accounts and stays with them indefinitely. Transferees, like the jittery man whose apartment didn't have a door, can call RMR's 800 number for help at any time. Troubleshooter Stone, who will personally oversee about 550 moves this year, doesn't mind the unpredictable hours, she says, because of the satisfaction she feels in helping people through a stressful time. "That's the reward," she says. "It makes you feel really good."

Path Two: The Human Touch
At ScriptSave no one has to answer to customers after regular business hours. But if one of ScriptSave's customers dials the company's 800 number during the day, a funny thing happens. The caller doesn't get the typical automated menu of choices. An actual human being answers.

Strictly speaking, ScriptSave's customers aren't the people who call its 800 number. Its customers are health-insurance companies, such as BlueCross BlueShield of Florida, that provide prescription-drug benefits to their members. The insurance companies hire ScriptSave to explain members' prescription-drug benefits to them.

Company CEO Charlie Horn says that when he describes his business to other entrepreneurs, their first question usually is, Why don't you just automate your phone system? To answer that query, Horn has to go back to the company's founding, in 1995, when he first began wrestling with the issue of how to handle customer service. A former marketing manager and sales agent at several insurance companies, Horn had 25 years of experience in the industry. He wanted a system at ScriptSave that would allow the company to make explaining prescription-drug programs to members as squeak-free as possible. Horn knew that the majority of ScriptSave's calls would come from cardholders who were 65 or older and that those customers would require the kind of individual attention that a machine couldn't provide.

Horn made a false start, outsourcing customer service to a call center, which left him "in the dark" about whether his customers were being well served, he says. By 1997 he had moved customer service in-house and was determined to maximize personal contact with the people who turned to ScriptSave for help. "We realized if we were going to do it really well, we had to do it ourselves," Horn says. Since its rebirth, four years ago, the company has grown from 3 employees to 105. Sales soared to $13 million in 2000, up from $6.3 million the year before. The company is profitable and carries no debt. All the growth has been financed internally.

Today even something as simple as a customer's call to activate a new prescription-drug card is, quite deliberately, handled "live." Why go to the extra trouble? It's simple. Horn is looking for any excuse to chat with customers -- or rather, his customers' customers.

So that the chat is effective, ScriptSave has to train its people well. Horn insists that all new hires get three weeks of training before they take their first call. The 35 customer-service assistants spend another 60 hours a year in the classroom. The new hires learn the basics of phone etiquette and then move on to the demographics and other characteristics of the ScriptSave customer. For example, new workers attend a "senior sensitivity workshop" to help them deal with callers who might be hard of hearing or unable to read prescription labels.

Horn says that his company's caring sensibility contrasts sharply with the stereotype of how call centers usually operate: with brisk efficiency above all else. It's a point of pride, according to Horn, that ScriptSave has no limit on how long a conversation with a customer can last. He recounts a recent story about an elderly woman who had to interrupt a call to ScriptSave because her husband had suddenly taken a fall. The phone rep called back later to see how the couple were faring. Later the woman E-mailed her thanks to the company for the extra service. "We don't do it for publicity. That's the way we want to be," says Horn, although, of course, keeping customers satisfied is in his company's best interest.

By trying to convey a sense of human warmth in a very different business, Betty Heirich is also seeking to achieve a competitive edge for her company. She is CEO of three-year-old SkiMall.net, an Internet venture based in Telluride, Colo., that she cofounded with her husband, a former district manager for Wal-Mart. The company is one of several online businesses that provide information about the kind of lodging and equipment that's of particular interest to winter-sports enthusiasts. Such information is available in great and colorful profusion on the 500 pages of SkiMall's Web site.

When Heirich first put the site online, she left it up to users to navigate their way through a blizzard of information. After a year, however, she discovered that the mechanized browsing system was undercutting one of her company's greatest potential assets: the image of SkiMall as the skier's genial friend and tour guide. To alter that image, she embarked on a new strategy. Now people who log on to the site find a "live assistance" button on its pages. Visitors can type in a question, connect with a human being at the company, and receive a reply, often within seconds. "We'll help anyone look for anything," says Heirich, who takes a commission on products that are sold or hotel rooms that are booked on the site.

Although the company's chat system combines the comfort of a physical presence with the speed of E-mail, such setups are still not common. A survey last year by International Customer Service Association and e-Satisfy Ltd. found that just 4% of Web sites used live chats. But there are indications that customers crave human intervention. In a survey two years ago by Forrester Research, 71% of online buyers who requested customer service did so by turning to E-mail, compared with the 11% who sought help from a Web page containing answers to frequently asked questions.

Heirich's commitment to service is so strong she still takes a shift herself, joining her nine employees in answering questions from 7 a.m. to 11 p.m. -- or in some cases past midnight. Some people want help finding particular brands of skis. Others ask about the skiing conditions in Telluride or for directions to the resort's hot nightspots, like Fly Me to the Moon Saloon. Heirich's goal is round-the-clock service. For a fledgling company like SkiMall, attempting to staff a 24-7 live-help operation seems brashly ambitious, if not a sure path to wipeout. But Heirich's secret weapon may well be her unique workforce. She employs three people in the office and six stay-at-home moms who work in shifts at the real-chat beat.


Betty Heirich's secret weapon may be her unique workforce. She employs six stay-at-home moms who work in shifts at the real-chat beat.


Heirich uses a service called Human-Click, which is a sophisticated version of a free instant-messenger program. When a visitor arrives at the site, SkiMall's employees hear a doorbell-like ring. They can "approach" the potential customer, much as they would in a real store, by starting an online conversation. Heirich claims that her employees respond immediately about 50% of the time and answer messages within 24 hours. One major exception: when 20 inches of fresh powder fall, it's "understood that nobody works," she says.

The HumanClick software is set up to provide a visitor "footprint" that reveals such things as, say, which site the user has visited immediately before accessing SkiMall's site. Such clues about customers' interests help the company's reps jump-start conversations. Some visitors are shocked to discover they are "conversing" with an actual human being in cyberspace. "I've had people ask me, 'Is this a real person or a bot?" says Heirich, who previously worked in retail jobs in ski-resort towns. She pays nothing for the basic version of HumanClick, although a more advanced version of the program costs $150 a month.

By her company's second holiday season, its business had tripled, she says. The site draws about 100,000 hits a month.

Path Three: Real-Time Feedback
When John and Amy Howard launched Carrot's Ink Cartridges, in Carrollton, Tex., three years ago, they did so with trepidation. They knew their product line, no-name ink-jet cartridges, was a commodity, so service would make or break the business. But today the Howards don't have to wonder if they're doing all right by their customers. They get a real-time report card every day from BizRate, one of a handful of services that survey the customers of online businesses. What's more, the service is free.

The Howards simply wait for the survey results, which arrive by E-mail every afternoon. Customers are asked to fill out two E-mail surveys, the first time when they make their purchase and the second when their item is delivered. Cooperating customers are rewarded with online scratch tickets or other chances to win cash. The Howards have been pleasantly surprised at the number of customers who fill out BizRate's 10-point survey, which covers things like customer support. The response rate has averaged at least 20%, and on some days it's as high as 35%. BizRate adds up the scores Carrot's receives and sends the Howards a "VitalMail" report.

On a typical day recently, the overall score Carrot's got was 9.3, putting it in the top 1% of BizRate merchants. Just as pertinent as the ratings are the comments that come directly from customers. "I like reading the comments. They're more important than the metrics," John Howard says, since the real-time information can help the company correct problems quickly and systematically. Thanks in part to that advantage, Carrot's has raised its revenues to $2 million since its launch.

Getting from users an instant snapshot of how a company is doing is a big breakthrough in customer service, says consultant Patricia Seybold. What companies can measure "in or near real time," she says, differs from the quality of data they can collect if they survey their customers once a year. That doesn't mean that every time customers call or send E-mail, they should get a "little five-point questionnaire," adds Seybold, who recommends that companies start slowly by polling a percentage of their customers each week.

The moving service, RMR, does exactly that. Its real-time feedback from customers is the "most incredible quality-control tool," Bob Carbonell says. "It's live hot data. It gives us an opportunity to resolve issues that are festering."


Real-time feedback from customers is the "most incredible quality-control tool," says company president Bob Carbonell. "It's live hot data."


Each day, RMR's managers receive the results of a two-page satisfaction survey that customers have completed on the Web. The old, paper version of the survey got a 15% response, says Carbonell. Shifting to the Web has boosted the rate more than threefold.

RMR's surveys go out at the conclusion of each move. The transferee receives an E-mail message that is linked to the survey. He or she is asked to type in comments and answer 20 questions. Half pertain to RMR's service, half to the performance of the moving agent selected by RMR. If a mover or a truck driver has a string of low scores, RMR calls right away to correct the problem. Measured on its own 10-point scale, RMR's own customer-satisfaction rating stands at about 90%, according to John Carbonell, the company's sales man- ager and Bob's brother. He says that's a good average, since "you hear more from people with any kind of problem." But, of course, that's exactly who you want to hear from sooner rather than later.

Stratis Morfogen of FultonStreet heartily agrees. "The customer who says, 'You stink!' -- that's the one we want to talk to," he says. Moreover, when Morfogen, also a BizRate subscriber, receives any kind of negative feedback through that channel, he routinely sends an "E­gift certificate" to acknowledge the complaint.

Path Four: Proactive Pursuit
The possibility of finding out what customers think as they are thinking it is a revolutionary development. But nothing is more radical in the realm of customer service than what Bill Strauss is attempting to do. Strauss, CEO of Proflowers.com, an online florist based in San Diego, isn't satisfied with improving customer service to the nth degree. He wants to eliminate the need for it altogether.

Strauss is a former vice-president of customer support and operations at Intuit, the financial-software company known for its efforts to make software so intuitive that "customer support" is superfluous. The five years that Strauss spent at Intuit in San Diego burned a zero-tolerance attitude into his psyche, he says. Now he's trying to translate what he learned there into improving the customer-service performance of Proflowers, which Strauss joined during its start-up in 1998.

Before Strauss had sold a single daisy, he scrutinized the workings of the company's customer service. After they placed an order, customers most often called simply to check on the order's status: Have the flowers been delivered? From the start, he had Proflowers gear up so it could send three automated E-mail messages as an integral part of every transaction. The first message is now standard fare at many Web sites: the minute customers place an order, they receive a confirmation by E-mail. When a delivery truck picks up the order from Proflowers, that information goes back to the company's Web site, which spins out a second E-mail update. But it's the third message that's the charm. The customer gets a message saying that the flowers were delivered, for instance, at 11 a.m., signed for by Casey Jones. The third E-mail all by itself "limits the number of calls we get. It's proactive," says Strauss. "It's one thing to just do a good job handling the calls that come in, but that's just reactive."

Strauss is a passionate advocate of proactive customer service, but he's hardly alone among CEOs who speak in those terms. Some use the buzzword tier zero, a fiercely proactive strategy. "If we can understand why customers are contacting us," says Strauss, "we can try to modify our Web site, marketing efforts, and ordering process so that we don't give them a reason to call us."

A case in point: the cost of roses goes up dramatically right before Valentine's Day, which forces Proflowers to pass the price increase along to its customers. Strauss could easily envision hundreds of customers calling to complain about the price hike. But Proflowers nipped the calls in the bud, as it were, two years ago. The solution? Each January the company sends out an E-mail notification to existing customers, alerting them to the price increase and, of course, inviting them to preorder at a lower price. Proflowers even tries its best to protect time-challenged customers from themselves. "For instance," Strauss says, "if customers write a gift message saying 'Happy Valentine's Day,' but the delivery date is after Valentine's Day, we call to confirm that all is OK."

Proactive pursuit may be a lovely theory (it's even alliterative), but is it really a brilliant, cost-effective tool? Strauss has some impressive results to point to. In its fiscal year ending June 30, 2000, his company had sales of $27 million, and the overwhelming majority of those transactions were completed online without phone assistance. Telephone orders represented a scant 10% of sales. Roughly two out of five customers who ordered on the Web requested help either by E-mail or by telephone. That's a big improvement over 1998, when the figure was more like four out of five. And although the company's contact-to-order ratio (see "Buzzwords to Watch," below) is considered good in the E-commerce world, Strauss vows to improve it. For now, though, his 30 customer-service reps sit tight by their computers and phones. Tier zero? Not yet.

Costly Lessons
Despite the many examples of companies that report shining success in applying cutting-edge customer- service concepts to get a competitive advantage, there's a bleak side to that brave new world. You could summarize that other side with two words: Lids and Garden.com.

Lids Corp., a retail chain that specializes in sports caps, began with a single kiosk in a mall in 1992. By last year, it was operating 388 stores in 47 states and was generating sales of $125 million. A cap is a cap, but Lids invested in a level of customer service virtually unheard of in retailing, particularly among independent stores.

After launching its Web site, in late 1999, the chain installed kiosks equipped with high-speed Internet access in 55 of its stores and beefed up its customer-support team at its headquarters. Customers could reach Lids personnel by calling an 800 number or using a Web chat feature about 12 hours a day. To strengthen the link with its mostly teenage customers, Lids created its own prepaid cash card, which allowed them to order over the Web without a credit card. "Everything we do is to make it simple for the customer to get the hat," Lids CEO Nancy Babine Kucinski said in an interview in December.


The customer-care center at Lids was a drain on profits, notes CEO Nancy Babine Kucinski, but it was "very effective."


There were signs that the customer-service initiatives were paying off. During the 2000 holiday season Lids' Web-based sales tripled, greatly helped by orders placed in the store kiosks, Kucinski said at the time. And yet the company apparently lost control of its spending. The rapid expansion of stores no doubt had strained its capital reserves, as had the money it poured into customer service. In early January, Lids filed for Chapter 11 bankruptcy protection from its creditors.

Kucinski, who has not been available for comment since December, hinted then that the company had paid a high price for its zealous devotion to customer service. Conceding that Lids' customer-care center was a drain on profits, she said, "It's not a money- maker; no, it's not. It's expensive to run, but it's very effective."

Garden.com could tell a similar tale of woe. Before it folded, in November, the online vendor of plants and all other things related to gardening emerged as a symbol of fiercely innovative and elaborate customer service. Its offerings included assistance 17 hours a day and seven days a week by telephone or E-mail, plus a staff of gardening experts who responded to customers' questions online. Was the Austin-based Garden.com too fanatical in spending its scarce dollars on customer-service features? Ron Webb of the American Productivity & Quality Center, in Houston, who studied the company's customer service closely, says the emphasis should probably be on the word too. "They may have gone too far on the continuum of customer service," he says.

No one disputes, of course, that like any other business expense, customer-service spending can get out of hand. Excess, however, is hardly uppermost in the minds of people like Stratis Morfogen. Yes, says Morfogen, you have to have a sensible strategy. And yet the sums of money that FultonStreet is plowing into customer service are huge for a business of its size. About $1 million of the company's $3.5 million in angel funding has gone to Internet-related software, hardware, and phone systems, and some 10% of its sales go to staff a five-person customer-service department. To date, Morfogen has also plowed almost $1 million into the design of his Web site. But he submits that the formula is working, to the extent that FultonStreet moved into the black in January, according to its CEO. "At the end of the day," Morfogen says, "it's about customer service."

Susan Greco is a senior writer at Inc. Researcher Kate O'Sullivan contributed to this article.


E-mail Response Says It All

Why doesn't Martha Stewart answer her E-mail? On a recent survey of how well-known companies respond to their electronic messages, the domestic doyenne turned mega-entrepreneur failed miserably. Far from exemplifying the gracious Web host, she (or her company, at any rate) didn't respond at all to a series of E-mail queries posted by a would-be customer.

Shocking? Not really, except that Stewart's Marthastewart.com is regarded as one of the most customer-enlightened sites on the Web, and E-mail response time is now considered one of the most important barometers of customer service.

But, hey, Stewart is hardly the only one lacking in E-mail etiquette. What's perplexing and surprising is how many otherwise good companies also fail the E-mail litmus test every day.

Jonathan Brookner researched E-mail response for Peppers and Rogers Group (a consulting firm based in Norwalk, Conn.). He says he asked easy questions and tracked response rates in 10 mostly retail industries, from apparel to office supplies. Among the 65 well-known Internet companies he tested in August 2000, only 30, or 46%, responded to E-mail requests within 24 hours. That's up 7% from the figure that was reported six months earlier.

More revealing, says Brookner, is the fact that in the August survey, 20% of the online businesses never responded to E-mail requests at all. "Companies are not keeping pace," he concludes. "They're running in place as more and more consumers go online." At the other extreme, 16, or almost 25%, of the 65 sites responded to requests within two hours.

The pressure on companies to handle their E-mail quickly and effectively will only intensify, says Inc. Technology columnist Jim Sterne. "If you can keep up-to-date on your E-mail, you have a chance of staying ahead of the competition," he says. --S.G.


Buzzwords to Watch

Along with the intense customer-service initiatives at some companies, new buzzwords are emerging. Here are definitions of four new terms:

A contact-to-order ratio is the number of times a company's customers contact it before placing an order, compared with the number of orders a company receives. A zero ratio would mean that the ordering process works so smoothly that no customers feel compelled to call.

A contact center is a technologically sophisticated version of the traditional call center. But contact-center workers don't just answer phones. They also respond to customers' E-mail messages and, in some cases, participate in live chat sessions with them over the Web.

Customer-relationship management, or CRM, refers broadly to all aspects of marketing, sales, and service that pertain to customers. More narrowly, it describes a software-based system that manages the information a business gathers about its customers. The data can include such things as customers' names and purchases and a list of goods the customers return.

Tier zero describes service that's proactive and so complete that it enables customers to solve their problems without requiring the assistance of a customer-service rep. Forrester Research, a technology-research firm based in Cambridge, Mass., claims to have coined the term. --Kate O'Sullivan


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