Customer Service in Cyberspace:

The New Age of Customer Service



Joseph Delostrinos

CIS 4399

Independent Study

Emerging Issues in Information Technology

Summer 2002

Customer Service in Cyberspace:

The New Age of Customer Service


Customer Service: Enter E-Commerce

The emergence of Electronic Commerce, or E-Commerce as it is better known, has forced businesses to redesign or invent new methods and strategies in an attempt to elevate their customer service to new heights in response to an increase in competition as well as a dramatic increase in the choices the Internet now gives customers when shopping for goods or services.  The explosion of the Internet in the past decade, brought about by rapid advances in computer and Internet technology in concert with plummeting telecommunications costs throughout the globe, has given the average consumer, armed with a personal computer, a credit card or two, and Internet access, more choices than anybody could have ever imagined a short decade ago.  And it is sure to get even better in the future. 

Today, thanks to modern technology and the World Wide Web, consumers clearly have the upper hand in the business-to-consumer (B2C) relationship, rather than the other way around, as was the case in the decades before E-Commerce.  Back in the pre-E-Commerce era, customers then, didn’t have the choices for products or services that we enjoy, or should I say, take for granted today.  Consumers back then were limited to only a few choices for products or services and were stuck with buying what was on-hand regardless of the quality or price. 

Customers did have somewhat of a choice because they could usually shop at different stores to search for the best bargains but the alternatives available made only small differences in quality and price.  Customers just didn’t have much to choose from in those days.  Avid readers were forced to buy books at normal retail prices.  There was no such thing as “naming your own price for airline tickets”.  Shoppers were forced to take a salesperson’s every word that the product they were selling you was the best around, guaranteed, even though it probably wasn’t.  And, if you needed to buy something right away and got to the store after it was closed, you were out of luck until they opened for business the next day.  I have lived in places where you could not shop on Sundays because everything was closed.  If there was something I needed right away, I had to wait until Monday to buy it.  Businesses in that time period, even the ones that didn’t put too much thought or effort into customer service, got rich thanks to the consumer’s disadvantage.

Today, with E-Commerce, consumers have the clear advantage in the traditional businesses-to-consumer relationship.  Consumers now have the power to choose the best quality products available on the market.  Customers now have a wide variety of choices, at the most competitive prices.  Best of all, thanks to the convenience of the Internet, consumers can shop for goods and services from the comfort of their homes without ever having to leave the house.  These choices, made by millions of online consumers daily, can collectively determine whether a business is destined for continued success in the E-Commerce marketplace or destined for failure based on a snapshot of their performance for that time period.  There is no guarantee for any business just because it succeeded once or twice.  Businesses have to continually provide the best quality products at the most competitive prices in addition to providing the best customer service possible to survive in the E-Commerce marketplace.

As a result of E-Commerce, a new age of customer service has emerged where the customer’s power to choose from a wide variety of businesses for goods or services forces all businesses to cater to their needs for quality products or services at competitive prices in the E-Commerce marketplace.


Customer Service Simply by Providing More Choices   

As I have repeated over and over again so far in this paper, the average consumer in today’s E-Commerce marketplace has literally the entire world market to choose from when shopping for goods or services.  Consumers can either go to a physical source to purchase goods and service such as a traditional retail store or shopping mall, or consumers can shop online and browse through one gigantic, seemingly endless, virtual shopping mall using a computer that is connected to the Internet.  Best of all, the average consumer can buy what they want, when they want. 

Being limited to shopping during normal business hours, as was the case before the age of Cyberspace, has become somewhat of a thing of the past.  Now the average consumer can shop at 2:00 in the morning if they wanted to, in their underwear, and not experience even the slightest decrease in the number of choices for products or services available to them online. 

The seemingly endless virtual shopping mall on the Internet is open for business all the time.  It never closes!  How is that for customer service?  E-Commerce websites can be accessed 24 hours a day, 7 days a week, 365 days a year, with only minor interruptions in service due to technical difficulties that crop up from time to time.  The Internet is not perfect nor is it immune to any problems though it might one day be a perfect system.  But, the E-Commerce marketplace of today can experience periods of high traffic that cause slow service or no service depending on bandwidth.  The Internet can also experience setbacks such as hardware or software failure, cyber attacks by hackers, or natural disasters like fires, floods, or earthquakes from time to time.  Many businesses already have back-up plans in place to counteract such potential setbacks.  But, all things considered, how can the traditional way of selling goods and services that operate using limited business hours compete with all of the conveniences that the E-Commerce marketplace provides us?

Technology continues to advance at a rapid pace.  It won’t be long before shoppers can log onto the Internet without having to worry about interruptions in services due to the above-mentioned problems.  And, in the near future, we might all be able to enjoy the convenience of broadband Internet access that is far quicker than the quickest broadband Internet access we have today.  It sure looks like things are headed in that direction.  More and more people today are converting from the dial-up telephone line Internet service, to broadband Internet access meaning that more and more people now have the power to surf the Internet more efficiently and at much higher speeds than before.


Customer Service: Adapting to Change

Because of all of this, obviously, businesses can no longer afford to be complacent when planning and executing their business strategies.  Businesses cannot afford to overlook the significance of E-Commerce.  Along with everything else a business worries about, a business must take customer service very seriously because the very existence of the business depends upon their ability to adapt their business strategies to the demands of their customers.  Businesses can now be held accountable for providing products or services that customers do not buy due to poor planning, poor customer service, and inadequate knowledge of the current market.  Any failure experienced by a business in the marketplace costs businesses money, reputation, and often their very existence as a viable competitor in the E-Commerce marketplace.  E-Commerce businesses that fail in the area of customer service do not last for very long in this day and age.  Because of the real threat of failure, businesses are now forced to adapt to new ways of thinking about how to serve their customers better.  This includes soliciting the input of customers as well as listening to customer’s complaints. 

Doing it the “old way” is simply not going to cut it anymore.  Businesses that hold on to the “old school” way of doing things because it used to bring them success or because “they have always done it that way”, will be overtaken and left behind by those businesses that are flexibly and adapt according to shifting trends and fluctuating demand.  The forward thinking business that adapts their customer service to the changing demands of the new E-Commerce marketplace will be the business that can survive and ultimately succeed in the fiercely competitive environment of today’s E-Commerce marketplace.

Customer Service with Bricks and Clicks

In response to E-Commerce, businesses everywhere are adapting to a strategy called the “bricks and clicks” strategy for conducting business primarily to expand their market and serve their customers better.  This popular new strategy combines the traditional business practices of physical retail establishments with the virtual world of computers and Internet technology.  Businesses like Barnes and Noble, Walmart, Circuit City, Staples Office Supply, Walgreen’s Drug Stores, and Victoria’s Secret are good examples of businesses that have implemented the “bricks and clicks” strategy to their businesses.  These businesses now employ E-Commerce websites in conjunction with their normal businesses.  Customers can now conveniently go and buy their products or services online or easily get information about the products or services they provide.  The “Bricks and Clicks” strategy is popular to many businesses today because this strategy is a very cost effective way to serve their customers better.  Compared to a hundred or so physical stores spread out throughout the country or the world, one good E-Commerce Website can serve the same amount of customers, 24 hours a day, 7 days a week throughout the year for a fraction of the cost to operate those expensive physical retail stores. 

The “Bricks and Clicks” strategy provides an easy and convenient alternative for their customers to shop for goods and services besides shopping at their physical retail stores.  Most businesses have already converted their business to a bricks and clicks business. 

Some companies choose to conduct their business strictly on the Internet.  Many companies that survived the carnage of the “” crash of the late 90’s such as,, and E-Bay are good examples of such companies who conduct business strictly on the Internet.  Another good example of a company that does this well is the Dell Computer Company.  You cannot find a retail store that sells Dell brand computers because Dell sells all of their computers online.  I use Dell Computers as an example because Dell was one of the first companies to use the Internet as the primary way to sell their computers and actually succeeded in converting their business to an E-Business. 

Dell Computers incorporated E-Commerce into their business strategy, which allowed them to sell computers to a much wider range of customers online while simultaneously providing those customers the best customer service possible.  Dell Computers was able to eliminate large inventories that effectively reduced their operating costs buy building-to-order using a “pull” strategy.  Dell Computers is also able to provide products to their customers built to their customer’s individual specifications without much trouble as a result of their E-Commerce operations. 

Dell Computers provide a variety of customer services including online and telephone product purchase and support, online self-service product customization, product descriptions and prices, order tracking via e-mail notification, and secure online product purchasing.  Dell Computers have been so successful with their E-Business operations that other major computer retailers such as Hewlett Packard, IBM, Compaq, and even Sony have followed suite and adapted similar E-strategies to their daily operations.  These businesses have implemented E-Business into their business strategies in conjunction with their normal retail methods of selling computers. 

Today, Dell Computers leads the world in computer sales and customer service.  It is amazing that Dell Computers did this all on the Internet.  Who would have thought ten years ago that a company could do what Dell has done. 

Another such company is Lands End, a clothing company that has been selling their line of clothes via catalog orders for many years.  Lands End implemented E-Commerce in 1995 and is now the largest online clothing merchant on the Internet.



Customer Service: Open for Business Everywhere

As mentioned earlier, in E-Commerce, not only does a customer not have to worry about time constraints (i.e. normal business hours from 10 AM to 7 PM) as a factor that they have to consider when shopping for products or services, but geographical barriers that have traditionally divided cities and countries have also been eliminated as a constraint to consumers when shopping for goods and services.  Now, many businesses are finding themselves in direct competition with other businesses selling the same products or services throughout the global E-Commerce marketplace.  It has turned into survival of the fittest for businesses in terms of sales and providing the best customer service possible to millions of customers everywhere.  This situation is definitely a plus for consumers because businesses are now forced to compete with other businesses for customers.  As a result, the highest quality products at the most competitive prices are available for consumers to purchase.

E-Commerce businesses in New York and Los Angeles not only have to compete head-to-head with each other, but they also have to compete head-to-head with similar E-Commerce businesses in London, Montreal, Paris, Hong Kong, Tokyo, Singapore, and Sydney who sell the same products and services. 

To the average consumer shopping the world marketplace on the Internet, the relationship between these geographically dispersed E-Commerce businesses is transparent.  To the average consumer, the difference between these geographically dispersed businesses is not the location from where these businesses sell their products or services, but which of those businesses can provide the best quality products and services at the most competitive prices while providing the best customer service possible.

So, how do businesses adapt to the changing demands of the E-Commerce marketplace that is literally controlled by the collective tastes and demands of consumers who shop for the best deals by making comparisons and choosing to purchase certain products or services based on which products or services they perceive as having the best quality and value for the money?  How do businesses make customers feel like they have made the best choice after they have made the purchase?  And, once businesses have adapted to customer demand by providing products or services that customers want to buy, how can businesses stay ahead of the game and continue to provide what customers want at the most competitive prices? 

In this day and age of E-Commerce, customers have a multitude of choices.  Businesses are challenged to make customers want to buy their products.  That is the only way a business can profit and maintain their existence.  But how do businesses competing in the E-Commerce marketplace go about doing that?


Customer Service through Quality Processes and Quality Products

First of all, it is of the utmost importance that businesses provide the best quality products or services possible to their customers at the most competitive prices in the market.  Without quality products or services that appeal to most customers, a business simply cannot succeed in this day and age of E-Commerce where customers can shop around and choose the best products and services available. 

Since the beginning of the industrial revolution, product quality has evolved from the low quality products of the distant past to the high quality products of today.  In the beginning, manufacturers began the search for the best ways to build their products; quality was not really a priority.  They just wanted to build products, sell them, reap the profits and get as rich as possible. 

Pioneer automaker Henry Ford, while searching for a better, more efficient way to manufacture his automobiles and make his automobiles more affordable to the masses, invented the assembly line and single handedly revolutionized the process of manufacturing forever.  The assembly line not only revolutionized automobile manufacturing but also revolutionized everything that has had to be manufactured ever since. 

In the assembly line, manufacturing processes were broken down into sub-processes that production managers or assembly line supervisors could control, track, analyze, and run more efficiently.  Products were assembled sequentially as the assembly line moved from the start to finish.  This led to more control over inventory levels and lower manufacturing costs. The cheapest materials were used and they built-to-store large inventories in anticipation of future demand.  The assembly line has been used ever since and has made products more affordable to the average consumer and quickly made Henry Ford a very rich man.

Then, decades later, the Just In Time (JIT) strategy was developed.  Perfected in Japan, JIT was developed to add quality to the manufacturing process as well as add quality to the final product while simultaneously eliminating non-value adding processes that usually kept the cost of manufacturing high.  In JIT, manufacturers began to use higher quality raw materials to manufacture their goods because quality in the manufacturing process as well as quality in the final product is a major priority.  The cheapest materials do not necessarily guarantee lower production cost.   

In JIT, the workers operating the machinery are required to be multi-skilled, better trained, and better educated.  Under JIT, workers are also expected to be multi-tasking, meaning that they are expected to be able to efficiently perform a number of jobs simultaneously.  Gone are they days of specializing in only one task.   

A commitment to the total quality management (TQM) approach to all manufacturing processes is also an integral part of the JIT strategy.  As a result, a better manufacturing process, that builds quality into the process, is implemented.  This simultaneously lowers the costs of production while increasing the quality of the final product.  Quality built into the process yields quality products that consumers will likely buy. 

It has been proven over and over again that customers do not necessarily choose to buy the cheapest products out there in the market.  Today’s consumers are more knowledgeable and know quality when they see it.  Today’s consumers will gladly spend a little more money to get quality products rather than pay less for lower quality goods that are more than likely not as durable.  And as time goes buy, consumers will expect the quality of goods to increase so businesses are continually challenged to provide better quality products.

 Providing high quality products keep customers coming back for more and gives a business a good reputation as a business that continually provide quality products to their customers.  A good reputation in the market builds confidence in customers that they can find quality when they chose to buy from that particular business.  “Improved customer service leads to loyalty, protecting your customer base and enhancing your community image” (Rettie and Rousso, 2001).


Customer Service through Effective Supply Chain Management 

Quality materials are not always available when needed.  One of the objectives of JIT is to reduce inventory levels to only what is needed.  How does a business keep inventory levels down while keeping enough inventories on hand to handle normal production and unforeseen emergencies like spikes in demand for example? 

A good supply chain management system is the answer.  Supply chain management optimizes the operations of a business by synchronizing a business’s supply chain.  Communication with a businesses supply chain through supply chain management applications or software, tie a business’s supply chain together via the Internet and extranets.  A businesses supply chain is made up of a number of other businesses that provides raw materials and other supplies that a business uses to facilitate manufacturing.  A business’s supply chain management system will know precisely when the business needs to increase inventories and automatically sends an order to one or more businesses in the supply chain to keep inventories at optimal levels.  Keeping inventories at an optimum level allows the business to serve their customers better by being able to provide products on demand regardless of the situation.


Customer Service in the Buying Experience

Once the purchase is made, not only does the customer need to be satisfied with the product or service that they receive, but the customer also has to feel satisfied with the buying experience to include the time well after the purchase has been made.  This satisfaction experienced while buying the product will more than likely keep customers coming back.  But, how does a businesses accomplish that?

With customer service in a traditional, non-virtual physical store, the “sometimes” polite and “sometimes” knowledgeable salespeople are always available to assist customers with any questions they might have about the products or services that they are contemplating on purchasing.  But, how about customer service in cyberspace?  How does an E-Business effectively serve anonymous customers in the E-Commerce marketplace?  How does an E-Business effectively serve customers when there is no person-to-person contact?  How does and E-Business demonstrate a product that the customer cannot physically touch.  How can an E-Business make the buying experience the best it can possibly be so that the customer will be satisfied and keep coming back?  These are some of the major challenges of businesses today employing an E-Commerce strategy.

The Internet contains thousands upon thousands of E-Commerce websites that sell everything from sporting goods to airline tickets to books and movies.  Some sites have their own personality and present their products or services in some unique way in an attempt to appeal to their customers.  A good example is the Coca Cola Website.

  There are also other E-Business websites that present their products or services similarly to the way other successful businesses present their products and services on their Websites in the hope of achieving the same results.  A good example of a company that does that is who seems to mirror the website. 

All of these sites have one thing in common.  These E-Commerce websites presents their product or service in a way that facilitates the sale of their product or service to their customers. 

One very important way an E-Commerce Website can appeal to the customer is by the way the website is constructed.  Is the website visually appealing to the customer?  Is the website easy to navigate?  Can the customer find everything he or she needs on the Website?  Is there enough information available about products or services that the customer can use to enable the customer to make the best decision possible?  Does the business offer a large variety of products or services to choose from?  Does the business provide a variety of ways for customers to pay and complete the sale?  Businesses making the jump into E-Commerce must take those things into consideration in order to find success in the E-Commerce marketplace.


Customer Service in the Construction of an E-Commerce Website

The construction of an E-Commerce Website is very important to the success of a business selling goods or services over the Internet.  Nobody enjoys navigating through a “broken” website.  If you take a good look at various E-Commerce websites on the Internet, you will find that the more successful businesses have websites that are well constructed, visually appealing to the eye, and more importantly, easy to use.  These well-constructed websites do not appear to be too cluttered or dull, they use attractive colors, fonts, and graphics.  These websites also utilize the right balance of color and graphics, and use the white space effectively.  The successful E-Commerce Websites use a combination of the above-mentioned ingredients to reflect that company’s personality and business ethos. 

Navigation around the Website is also very important to a customer shopping online.  Successful E-Commerce websites are constructed with the ease of navigation in mind.  On these sites, hyperlinks that lead to different areas in the websites as well as other websites are always reliable, up to date, and get their customers from one area of the site to another as quickly as possible depending on the customer’s Internet connection and traffic.  Links, or hyperlinks, not only have to be reliable, but also displayed on the Website in a way that a customer using the website can readily see it, know what it’s for, and click on it to get to where that customer need to go without any problems.


Customer Service Through Data Management 

As an avid E-Commerce customer, I hate to have to wait for service due to a slow Website.  I like to be able to shop around, buy what I want, complete my transaction and get out as quick as possible.  I believe that in order to serve customers better, E-Commerce Websites have to be able to handle the large amounts of traffic that might pass through the site on a daily basis.  The more successful E-Commerce websites on the Internet are capable of this; they have to.  E-Commerce websites have to be capable of handling large amounts of data in order to compete with other E-Businesses.  The server or servers that support these websites should be more than capable of handling large volumes of traffic that can pass through the site on a daily basis.  Successful E-Commerce websites utilize the fastest server or servers that money can buy.  Some E-Commerce businesses use multiple servers with multiple processors to handle the high volume of transactions that are processed at any given time.  Multiple processors allow for simultaneous operations that expedite transactions.  The Intel Xeon processor is a processor that is widely used today.

These websites also utilize large amounts of storage space for the large volumes of data that an E-Commerce Website can accumulate on a daily basis.  Businesses can easily accumulate millions of bytes of information, from thousands of transactions, on a daily basis.  Transactions with names, phone numbers, addresses, account numbers, dates have to be stored somewhere. 

The Website itself, as well as the hardware, the software and the data stores have to be able to handle high volumes of information without any hesitation or difficulty.  If an E-Commerce site cannot handle the daily requirements of doing business, the business runs the risk of losing customers to frustration. 

In this day and age of fast food, fast cars, and broadband Internet access, customers will not stand for slow service and will take their business elsewhere if confronted with E-Commerce websites that does not perform to their expectations.


Customer Service through Information and Variety

In order for businesses to serve their online customers better today, E-Businesses have to ensure that there is enough information available on their websites for their customers to use.  Information that E-Commerce businesses might include on their websites is detailed descriptions of their products or services, customer product reviews, graphics and pictures, product or service demonstrations, and, of course, product or service prices and comparisons.  Many E-Businesses are also implementing something called Web Callback or Web Chat where customers can request a call from the retailer to provide more information or service about products or services they offer.  “Web merchants are learning that if they want to capture the 90 percent of online shoppers who might log off or click to another page, they have to use new tools like Web callback and Web chat to deliver better customer service”(Lynn Haber, 2001).

Take a look at some successful E-Commerce Websites.  These E-commerce websites contain more than enough information about their products or services that their customers can use to help customers make the right decisions.  The Dell Computers website offers detailed product descriptions and prices on all of the products they offer.  Dell also gives customers the option custom configuration by allowing customers to add or delete components, and gives customers the price after configuration.  This gives customers the option of configuring a system that can fit into a certain price range. 

Once the customer is shopping on the Website, can the customer find everything the customer needs in order to make a purchase?  Virtual salespeople might be an answer to customer service in cyberspace in the near future but for now, there is no salesperson available to help customers in the E-Commerce marketplace.  The closest thing E-Commerce has to online salespeople besides the text descriptions and graphics available are Intelligent Agents that collect information on a customers Internet browsing, or surfing, habits, and online buying habits to customize the customer’s buying experience on the Internet. 

“By analyzing information collected on-line about customer preferences, purchasing patterns, income and other demographics, e-businesses could cater to individuals with precision”(Robert Preston, 2001). is a good example of an E-Business that uses Intelligent Agents to personalize the buying experience for their customers. takes past purchases as well as customer browsing habits and displays similar products that might appeal to the interests of the customer when the customer logs in. 

Product or service variety is also important in E-Commerce.  If customers can find whatever he or she needs in one site, the customer might take advantage of the variety of products or services and shop at that site for everything he or she needs because it is more convenient.  The more products or services an E-Commerce business offers, the more business they can generate through their site. But, in order to accomplish that, it is a prerequisite that businesses have enough inventories to satisfy customer demand.  Demand might mean thousands of products in inventory to satisfy daily or weekly customer demand in the E-Commerce marketplace.

The customer must also be able to buy more than one product per business transaction.  Plenty of E-Commerce sites provide virtual shopping carts to their customers to virtually store the products they plan to purchase while they shop.  This makes it easier and more efficient for customers and the business to conduct sales transactions by allowing the customer to load the virtual cart until they are ready to check out.  In addition to that, customers are also required to set up a free business account so that the E-Business can better personalize the customer’s buying experience through the use of Intelligent Agents.  The business account might include information such as credit card number, shipping preferences, and personal information such as name, address, and e-mail address.  Having this information about their customers can expedite sales transactions and make it easier for customers to shop.  As a frequent E-Business customer, I like doing business with companies that provide quick and hassle free service.


Customer Service through Security

Security in the E-Commerce marketplace is also very important to businesses looking for ways to serve their customers better.  Security measures must be implemented to protect customers as well as the business from criminal entities such as hackers and cyber-thieves with malicious intent.  The occurrence of Identity Theft and credit card fraud is on the rise and E-Businesses must take measures to protect themselves and especially their customers.  It is imperative that businesses provide an E-Commerce site that is secure to prevent theft and keep customer and company information secure. 

Not only does the Website have to protect their customer’s credit card numbers from hackers who can intercept these transactions, but they also have to protect their customer’s personal information such as social security number, name, address, phone number, and other sensitive information from getting into the wrong hands. 

Businesses also have to protect themselves from these criminal entities.  Hackers can seriously impair an E-Business’s ability to conduct their daily operations.  Businesses are combating cyber threats by equipping their E-Commerce Website servers with firewalls that block unauthorized entry by hackers and thieves.  These firewalls protect the businesses information system by not allowing access without the proper credentials.  Businesses also employ software that protect the information system from unauthorized access by requiring users to provide a login name or account name and a corresponding account password in order to gain access to the system. 

Businesses also require that web-browsers used by customers have the capability of 128-bit encryption.  Those customers with outdated browsers that do not have this 128-bit encryption simply cannot do business with the Website.  Data encryption makes it extremely difficult for hackers and cyber-thieves to intercept or decipher sensitive information that is being transferred back and forth between customers and businesses.  These types of security measures make online shopping much more secure and reliable for the customer.  The more secure the website, the more secure the transaction.  If the customer feels safe, the customer will continue to use the Internet to shop for goods or service.



“Customer service can mean more than simply a friendly way to provide what a customer needs” (Beverly Holmes, 2001).

It is quite evident that the success or failure of a business depends partly on how that business serves their customers.  Customers will continually demand more from their E-Commerce businesses as far as providing the best products or services at the most competitive prices on the market.  Many companies that employ the “bricks and clicks” strategy or conduct their business strictly on the Internet realize this fact and continue to strive to provide their customers with the best customer service available to include quick, easy, and secure online transaction, personalization, variety, and support to get even more people shopping online.  E-Businesses should also listen to customer’s complaints and act on them in order to insure that customers are satisfied with the service.

E-Businesses must continue to remain flexible and continue to adapt to shifting trends and fluctuating demand in order to provide the products or services that their customers demand.  In order to achieve this, companies must continue to find new ways to improve customer service.  E-Commerce is here to stay and will continue to evolve into the future as a market with a potential that we could only begin to imagine today. 




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