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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