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John Federman is CEO of eStara. As Chief Executive Officer John Federman is responsible for eStara’s strategic direction, corporate vision and integration with ATG. Mr. Federman brings more than 20 years of experience with innovative information technology and media companies to eStara. Prior to joining the Company, Mr. Federman was co-founder, president and CEO of Dotomi, an Internet advertising company, and was responsible for its successful rollout in the United States.

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Self-Service Is Not The Same As Customer Service

Written on
October 15th 2007
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by John Federman  |
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mouseclick1.jpgEarlier this month, Wal-Mart kicked off its “Customer Contact Reduction” program – a quietly-launched initiative initially reported by the New York Times.  This plan has the retailer pulling all customer service numbers from its website in an attempt to reduce costly inbound calls about order tracking.   Instead of offering personal customer service, Wal-Mart will attempt to force ALL online customers to rely on self-service tools to resolve questions and online customer service problems.

What happens now if a Wal-Mart customer is shopping for a new plasma television and gets stuck on the check out screen, or has a few questions and wants to be reassured by a live voice? By eliminating the phone as an option, Wal-Mart is potentially alienating a valuable would-be customer who is on the cusp of completing a sale.

According to analyst John Ragsdale of the Service & Support Professionals Association, “To propose that self-service is the only avenue for support is a problem.” He adds, “With the holiday shopping season right around the corner, I hope other retailers don’t follow Walmart.com’s lead.  It could make for an even more frustrating shopping season than usual, and that, my friends, is a terrifying thought.”

The voice channel remains an important option for customers looking to quickly resolve questions, particularly inquiries about big-ticket or complex purchases. In fact, a recent forecast from JupiterResearch, Trends in Customer Service Technology Purchasing and Operations, reports that “customer service by phone will continue to be consumers’ contact channel of choice,” even as people buy more goods and services online. According to Jupiter, although service contacts started online are expected to double from 2006 to 2012, they will still be only 14 percent of the total.

Instead of abandoning the phone channel entirely, Wal-Mart would do well to take the lead from other high-volume retailers and consider alternative strategies to guide consumers to the most appropriate channel based on their needs.  Other internet retailers, for example, have found ways to avoid expensive “order tracking” phone calls while not dropping the ball with their high-value prospects that may require personal assistance though using click to call.  

Click to call allows retailers to engage customers at strategic points throughout their Web site, so high-value customers gearing up to make a significant purchase can connect with the company’s call center.  At the same time, companies are leveraging real-time Web analytics to channel non-sales inquires to less costly service options like email, chat and self-service.  These rules-based, or proactive, click to call deployments ensure companies service loyal customers with the right sales channel for their needs, without overwhelming their contact centers. 

By forcing all of its online customers down the self-service path, Wal-Mart is forgetting that customers today view customer service as a significant differentiator, and a reason to form loyalty in an overcrowded marketplace where competing offers are just a click away. 

Denying customers their preferred method of contact, just to cut service costs, could wind up costing you something even more valuable…loyal customers.



Reader Comments.

As someone that saw this first hand at another Fortune 50 company, I have to agree with you completely.

Yes, there will be immediate cost benefits. With a business of that size, you’ll see tens of millions of dollars, if not a hundred million, in savings.

However, the long term, negative impact, won’t be realized for a couple of years. Then, they’ll have to deal with negative word-of-mouth, slowing sales, and potentially a bigger and stronger competitor than they have currently.

Incremental savings look good in isolation when people review them at Review Time, but as part of the bigger picture, they can be the absolute wrong decision.

Posted by Shawn | 11:38 am on October 16, 2007.

Wow. How terribly short-sighted of them. The line: “forgetting that customers today view customer service as a significant differentiator” is the key. I wonder how long it will take for them to figure this out.

Posted by amy | 1:55 pm on October 16, 2007.

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