CIS
4399
Independent
Study
Emerging
Issues in Information Technology
Summer
2002
Customer
Service in Cyberspace:
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
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,
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
dot.com companies that survived the carnage of the “dot.com” crash of the late
90’s such as Amazon.com, Travelocity.com, 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
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
BarnesandNoble.com who seems to mirror the Amazon.com 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).
Amazon.com is a good example of an E-Business
that uses Intelligent Agents to personalize the buying experience for their
customers. Amazon.com 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.
Conclusion
“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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