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Live Interaction Crucial to E-Commerce Success

By Robert Conlin E-Commerce Times ECT News Network
Sep 29, 1999 12:00 AM PT

The growing consensus among top industry leaders is that the standard e-commerce model of click and buy with no live interaction is going the way of the Commodore 64. In a word, e-commerce with a human touch is "in."

Live Interaction Crucial to E-Commerce Success

"E-commerce's dirty little secret was the use of call centers to field questions from customers," said David Hsieh, founder and CEO of FaceTime Communications. In an interview with the E-Commerce Times, Hsieh added that, for the most part, the prospect of customer interaction has been largely ignored. "For a long time, people in the industry were reticent to talk about these issues, but now that the industry has matured, customer support is getting the critical attention it deserves."

Foster City, California-based FaceTime has approximately 30 customers and expects to double that number by Thanksgiving, Hsieh said. The company charges a low-end of $1500 (US$) a month on a subscription basis for its customer support services.

Hsieh added that most e-commerce models were built on the "Amazon.com model," which called for no interaction between the company and the customer.

Online stores that employ interactive tools see average sales orders increase 15 percent, he said. In addition, e-commerce sites can gauge the reaction of their customers to its Web site and product line, panning a gold mine of customer reaction and trends that large companies pay millions for every year.

Hsieh's company just signed a deal with AOL that will integrate Instant Messenger (AIM) with the company's platform for e-commerce. The arrangement will give FaceTime's customers access to AOL's vast pool of 43 million consumers for customer service applications.

Growing Industry Means Busy Signal For E-Commerce

Boston, Massachusetts-based Yankee Group, an online research company, predicts that the customer service applications market will be worth about $1 billion by 2003. Accordingly, New York-based Jupiter Communications says that 90 percent of online shoppers want some sort of human interaction in the process.

If that figure is correct, customers will benefit by having the freedom to choose whether they want to speak to a company service rep for either pre-sales or post-sales support. While it is too early to account in quantitative numbers how successful the applications are for e-commerce sites, there is little doubt to some that they will be worth their weight in gold.

"This is like the step from the telegraph to the telephone, from the silent movies to the talkies," CameraWorld.com CEO Walt Mulvey told this reporter. "Two or three years from now, this will be so widely accepted that people will forget it was an innovation."

Mulvey said that his company, which racks up some $60 million annually in sales, started using Beaverton, Oregon-based eFusion's customer support tools last month. The company reported 31,000 calls in August.

According to Mulvey, the critical look-to-buy rate is four percent. That figure shoots up to 25 percent when customers call, he added.

Leaving the Cart at the Counter

eFusion's CEO, Ajit Pendse, talked his former bosses at Intel into spinning off the company and investing in eFusion's applications. Pendse also cited the Amazon.com model as the beacon of the industry.

"It's beginning to hit home with people that some interaction is necessary, Pendse commented in an interview. "We find that 60 to 70 percent of people will abandon their shopping cart somewhere in the process. That's startling." Pendse added that "We tell prospective clients that we can lower that rate by at least 25 percent."

Pendse said that eFusion is working with telecoms to develop nationwide platforms as a springboard for his company's applications. A deal in France will be announced soon, he said. Telecom Italia, France Telecom, AT&T Ventures and Microsoft are among some of eFusion's $18.1 million third round backers.

From Back Room to Front

Living.com CEO Andrew Busey has experienced the evolution of the live interaction industry first-hand. The 28 year-old Austin, Texas businessman founded iChat, which was recently bought by Acuity Corp.

Busey sits on the board of Acuity and his living.com e-commerce site is a client of the company. The recently-launched complete home furnishings site -- which has been backed by some $40 million in venture capital -- uses the live interactive tool for pricing support. Oddly enough, furniture manufacturers are reluctant to have prices posted on the Internet, so customers have to request a price.

Busey expects that his company will utilize the interactive tools to their maximum once the site is up and going. In response to the E-Commerce Times' queries, he commented that "E-commerce is in a period of evolution, and there's no doubt that the new mechanism is browsing and customer support. It's absolutely crucial."

Dean Cruse, Acuity.com vice president of marketing, concurs. He said that if his company can help a large e-commerce site increase its browse/buy rate from the average of 2 percent to a half percentage higher, it would mean substantial increases in revenue for a heavily trafficked site.

Acuity's product line starts at approximately $25,000, Cruse said, but the company does tailor price to fit need. Ultimately, he feels, companies will find that the cost of not fitting interactive tools onto customer support will be steep.

"It's becoming a competitive necessity for e-commerce companies," Cruse said. "It's really the next logical step in e-commerce. When you start selling goods, you should expect to hear the phones ring. It's that simple."


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What's most likely to cost a company your customer loyalty?
a major product fail
major unethical corporate behavior
public advocacy of social or political views I oppose
a really bad customer service experience
stagnation -- I'm attracted to innovation
none of the above -- I'll stick through thick and thin