Customer Service on the Internet: Building Relationships, Increasing Loyalty, and Staying Competitive

Customer Service on the Internet: Building Relationships, Increasing Loyalty, and Staying Competitive

by Jim Sterne
A comprehensive guide to taking full advantage of the Internet for customer care
A dynamic customer service Web site can dramatically increase customer loyalty and provide a competitive edge that all companies strive to achieve. But in order to run a successful site, you must know the latest technologies and understand how to integrate them into your business


A comprehensive guide to taking full advantage of the Internet for customer care
A dynamic customer service Web site can dramatically increase customer loyalty and provide a competitive edge that all companies strive to achieve. But in order to run a successful site, you must know the latest technologies and understand how to integrate them into your business strategy. Written by internationally recognized Web marketing expert Jim Sterne, this book clearly explains these technologies and demonstrates how companies of all sizes can use them to create and maintain cutting-edge customer service sites.
Completely updated for today's technically-savvy readers, this Second Edition covers all the bases. You'll learn the steps needed to make the transition from your current customer support to the Web. You'll also find valuable information on how to improve your existing site in order to save money and provide better quality support. And with the help of numerous case studies from a variety of different industries, you'll discover how other companies create and maintain their Web sites.
This book will help you:
* Create a service plan that takes full advantage of the Web's potential
* Determine the best way to present your company's information on the Web
* Effectively manage e-mail
* Find out exactly what your customers want and measure their satisfaction
* Examine how others are using networked computer communications
* Utilize extranets to lock in customers and channel partners and lock out competitors
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Editorial Reviews

From the Publisher
"Customer Service on the Internet is one of those rarities: a thoroughly updated second edition of a book." (e-Business, October 2000)
The Barnes & Noble Review
As e-commerce sites web-wide are discovering, customers will no longer settle for less than outstanding service — and Customer Service On The Internet, Second Edition shows you how to give it to them. In this entertaining book, web marketing legend Jim Sterne shows how to create a soup-to-nuts, 360-degree service plan that takes full advantage of the Web's potential to delight customers.

You'll master the techniques, technologies, and mindset you need to make it so easy for your customers to do business, they won't want to go anywhere else. From the simple stuff (you don't have a FAQ? Create one) to the frontiers of million-dollar personalization and "anticipation" engines, Sterne covers the waterfront.

Discover how to organize yourself so email messages to your company actually get answered. How to invite real conversation with your customers — and what to do when you get it. How to begin understanding your customers as individuals (complete with an excellent high-level overview of the radically new tools and technologies available to help you — and a preview of some cool "blue-sky" stuff on the way.) And last but not least, how to measure the ROI of your web customer service offerings.

Want to stay competitive on the Web? Take the ideas in this book to heart.

bncom editor

Customer Service on the Internet is one of those rarities: a thoroughly updated second edition of a book.
This guide offers advice on integrating new technologies into an existing business strategy. It explains the relevant technologies, their uses for customer service, and the transition process. Specific instruction is offered on creating a service plan, presenting information on the Web, managing email, and measuring customer satisfaction. Case studies from different industries illustrate major points. Sterne is a consultant on Internet marketing. ^ Annotation c. Book News, Inc., Portland, OR (

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The Web Was Made for Customer Service

If you have any doubts about the importance, value, and potential of the Internet, go pick up another book. There are enough titles out there to convince you that the Web is changing the face of the planet. It's true. Enough said.

This book does not set out to convince you that the world has changed. We take that for granted and look for ways to leverage that knowledge while our competitors are still wondering why they're losing business.

The only questions that remain are: How can I use the Web better? How can I provide an interactive experience that increases customer satisfaction? How can I put up a barrier to competition and bond my customers to me so they'll want to buy from me now and forever?

If you're asking those questions, you're on the right track.

If you're looking for an academic treatise on the rigors of creating data systems that will let you track all of your customer data, you might want to pick up Michael Cusak's Online Customer Care (ASQ Quality Press, 1998). Or, at least get a copy of it for the people in your information technology (IT) department.

If you're wondering how e-mail management systems, troubleshooting guides, and artificial intelligence fit into an overall customer care program heading toward full-on customer relationship management, you've come to the right place. And if you're wondering about building a Web site that can provide your company with a competitive edge in treating customers the way they want to be treated, you've come to the right place.

The World Wide Web Grows from Infant to Toddler

The commercial use of the World Wide Web didn't appear fully-formed as a customer service tool. It started off as a marketing medium.

Phase One: The Product Page

A few farsighted marketing people discovered the Web and created the corporate equivalent of the personal home page. This is our brochure! You can click on this brochure instead of turning pages! See the pretty pictures of our headquarters! Read the exciting hype! Aren't we clever?

Phase Two: The Corporate Web Site

Upper management decided that its Web site should properly represent the whole company. Here's everything you would ever want to know about us and our products and our policies and our opinions and our white papers and our press releases and our trade show schedules. It's online, all the time, right here, read it while it's hot! Aren't we hip? Click here to download this important message: "Hello, I'm Lou Gerstner, chairman of IBM. On behalf of all of us at IBM, I'd like to welcome you to our World Wide Web server."

Promising Lou that his photo and voice would be on the home page secured the funding John Patrick needed in 1994 to move the company from grass roots into the tall bushes. But it would still be a few years before those bushes grew into fruit-bearing trees.

Phase Three: The Participatory Web Site

Then site visitors started to expect more. They knew that the Internet and the World Wide Web would support interaction. They didn't have to settle for static ads from the advertising department; they could manipulate the Web site, interact with it, play with it. They could track an overnight package at Federal Express (www. fedex. com, Figure 1.1). They could rent a car from Alamo (www. freeways. com), buy an airline ticket at PCTravel (www. pctravel. com), and bid on coins from their desks at Numismatists Online (www. bonsai. com/ qnu/ hobby/ index. html).

Until this point, the excitement of the Web was in how many hits could you generate--how much attention could you garner? Get enough attention and you could sell ads on your site. Since nobody seemed to be buying things in droves at the moment, you could defray the cost of your site with link-ads. It was easy to convince others that their message would be seen by the millions who came to your directory, search engine, or soap opera.

Then a small number of people began talking about the serious financial benefits they were reaping from their customer service applications on the World Wide Web. The results made everybody happy.

Customer Service Online: The Early Days

In 1995 Jerry Neece, then Sun Microsystems' senior product manager for Internet product marketing, announced that putting customer service on the Web had saved Sun an estimated $1.3 million--in January of that year alone. Approximately one third of that was in human resources. The majority was saved by delivering software fixes over the Internet, instead of having to create magnetic tapes and installation documents and then stuffing them into postal packaging. Not to mention the associated shipping costs. By January of 1996, one employee said that Sun was showing a savings of $12 million each month.

Saving money by delivering information electronically might be enough for most bottom-liners. But the Internet is a two-way street. It's a communications medium. It's not a TV, a radio, or a magazine. It's much more like a telephone, with the ability to hear as well as to be heard. You don't use the telephone to deliver a radio message and then hang up. You use it for conversation, be it chitchat, problem solving, or transaction processing.

Like the telephone, the Web also allows for conversation. Yesterday that conversation was written. Today it's verbal. Tomorrow it will be visual. The verbal and visual tools are helping and will help us take care of things on the Web that we previously did with our telephone 800 numbers. The complaint department is simply available in a new way.

Customer Service in General: The New Competitive Battlefield

Tom Peters keeps proving that he's not an old dog. He keeps learning new tricks and then turning around and teaching them to us. In Circle of Innovation (Knopf, 1997), Tom hails the end of incremental improvements, rallies around the Do Anything As Long As You Do Something flag, and calls for a corporate CDO--Chief Destruction Officer.

Peters also says to focus on customer lust. Forget customer satisfaction. You can even forget customer delight. Delight is temporary. Lust is visceral.

Your customers should not want your goods and services because those products are delightful for the moment or are satisfactory (as damning with faint praise as you can get). Lust is getting the customer to the point past recommending your company to others. Lust moves that customer into becoming an apostle for the company. Such customers become your best salespeople.

If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends with one message to a newsgroup. If you make them really happy, they can tell 6,000 people about you. You want every customer to become an evangelist for you.
Jeff Bezos, Amazon. com
Customer Service Management magazine, November/ December 1999

You can't create customer lust unless you have a service organization/ process/ ethos/ Web site that can sustain customers through all of their inquiries, problems, needs, hopes, and dreams. Surprise the customer, says Tom Peters. Brand your customer care organization.

Bill Floyd is senior vice president and chief information officer with Novus, the issuer of the Discover Card. He knows that a credit card is a commodity. But he also knows that he can stand out from the crowd by offering better service: "Our customer service can distinguish us from others. That's where we want to be."

According to the same Information Week article that Bill was quoted in (October 5, 1999):

The customer-service imperative is spreading across industries. The Chlor-Alkali & Derivatives division of chemicals company PPG Industries Inc. is using a new interactive inventory-management system to keep its customers informed about supply levels. American Airlines and British Airways are teaming with Canadian Airlines, Cathay Pacific Airways, and Qantas Airways to link their customer-service and frequent flier-operations. Chase Bank of Texas is using customer-management software from Siebel Systems to transform bankers into what it calls "relationship managers."

You want the short course? Look to Patricia Seybold's book Customers. com (Times Books, 1998). She spells out eight critical success factors:

1. Target the right customers.
2. Own the customer's total experience.
3. Streamline business processes that impact the customer.
4. Provide a 360 view of the customer relationship.
5. Let customers help themselves.
6. Help customers do their jobs.
7. Deliver personalized service.
8. Foster community.

A dedication to customer service is needed to pull it off. Fortunately, the Web is finally living up to the promise. Real companies are seeing real returns on their customer care investments.

Customer Service on the Web Grows Up

Cisco Systems estimates that in 1999 it achieved a savings of more than half a billion dollars by putting customer service on the Internet. In that year, 77 percent of all questions were handled online, and customer satisfaction levels were up by 20 percent over 1995. Customers also enjoyed 98 percent accuracy and timely repair shipments.

Cisco had four goals in mind when it started the online services:

1. Make it easier to do business with the company.
2. Improve customer satisfaction and productivity.
3. Reduce the time required to make decisions.
4. Develop stronger relationships with customers and business partners.

That $500 million savings was gravy. Companies are overcoming data silos, production-focused mentalities, and old white guys who still have their secretaries print out their e-mail and leave it in the In box, to get the most out of customer interaction on the Web.

Jeff Rumburg is a Meta Group analyst who calculates that the typical cost of a customer service transaction over the phone is about $5; that the same service costs about 50 cents through a voice-response system (" Press 4 to listen to sixteen more choices . . ."); and that it costs around three cents over the Web.

FedEx figured that calls to 1-800-Go FedEx to track a package cost the company about $7 each. When people track their packages on www. fedex. com, it costs about 7¢.

Forrester Research says that companies' call center labor costs were slashed by 43 percent by the end of the last century. Companies like Siebel Systems have added Web interfaces to their call center and customer contact management systems that not only provide call center representatives with the ability to get a 360 view of the customer relationship, but allow the customer to directly access the legacy customer care system and do it themselves.

Jupiter Communications (www. jup. com) found that the percentage of customers saying they were "largely satisfied" with their online shopping experience dropped from 88 percent in the summer of 1998 to 74 percent in January 1999.

Jupiter published its "Customer Service Online" report in September 1998. Among the key findings: "Proactive customer service is emerging as a key customer conversion tool. Fully 90 percent of online merchants surveyed plan significant changes and associated investment in customer service operations in the next 12 months."

Customer Service Is the Next Wave on the World Wide Web

You still find three-quarters of IT budgets are put towards transactions and engagement. But that's wrong. I think that 75% of budgets need to go to E-service.
Tom Harmon, VP retail and distribution information strategies, Meta Group

Why is customer service suddenly becoming so important? Because people are demanding it.

Information Week magazine conducted a survey in the summer of 1999 asking consumers what mattered most when buying a personal computer. Sixty-nine percent said positive past experiences helped them make up their minds, while 73 percent said availability and on-time delivery made the difference. But fully 80 percent agreed that service and support were the biggest reasons for making a buying decision. Then, 89 percent said that online technical support should be a standard feature with all computers.

Why is the Web the place to put your customer service efforts at the moment? Because it offers customers more of what they need:

  • 24 × 7 availability
  • Limitless depth of knowledge
  • Ability to remember customers as individuals

During the summer of 1999, Information Week asked 300 information technology executives about their key strategic technology and business priorities. In 1998, the number-one answer had been "improve customer service." In 1999, that answer took second place, right after "understand and meet customer needs."

When those IT execs were asked in 1998 how they would characterize their companies' efforts to satisfy the needs of their external customers, 42 percent said "very committed," and 52 percent said "somewhat committed." But when asked the same question in 1999, 69 percent said "very," and only 29 percent said "somewhat."

Just as lots of products are becoming commoditized on the Web, customer satisfaction is becoming visible on the Web:

BizRate. com is an unbiased, independent guide built on the continual feedback of millions of actual online buyers. BizRate. com does not accept money to feature or include an online store. Our program is free to e-commerce retailers. All customer-certified online stores are listed because they have opted to participate in our program by inviting their customers to provide input on every transaction. These stores appear in our recommended lists solely on the basis of their performance and your selection criteria.

One quick glance at the BizRate rating for shop. theglobe. com (Figure 1.2) is enough to keep anybody from shopping there.

In the middle of 1999, The Yankee Group (www. yankeegroup. com) asked 100 customer care executives if they used the Web for customer service. Fifty-seven percent said yes. When pressed about using the Web to "strategically augment" their support efforts, they all said they intended to. And most intended to do so soon:

Why are companies around the world putting more time, energy, and money into Web-based customer service projects? Because the payoff is a given. If you do it right.

The magic of a well-constructed Web site is that it can provide the information a customer wants, when the customer wants it, and in as much detail as the customer wants. Customers can answer their own questions, in their own time, and to their hearts' content. At first, this sounds wonderful merely because of the cost savings. You don't have to pay for the call to the 800 number. You don't have to pay for the person to answer the phone. You don't have to pay for printing, storing, picking, packing, and posting brochures and specification documents.

But the true wonder comes from the heightened sense of satisfaction felt by the customer. Giving your customers the ability to get an answer to a problem, in sufficient detail and in minimal time, is a gift they will receive gladly. A stronger bond of loyalty will be created, ensuring you a larger share of that customer's commerce.

Deliver on the Promise--Or Get Left Behind

With the advent of the telegraph, the world began getting exponentially smaller. When news could travel across the country in a matter of hours or minutes instead of months, expectations grew explosively. Now, with instantaneous communications, I want to hear about it as it happens. I want to see it televised live, and I don't want to be told I have to wait for anything.

I was asked the other day if I wanted the new battery for my laptop sent regular ground, two-day express, or overnight. My first reaction was surprise. If I wanted it delivered the day after tomorrow, I wouldn't be ordering it so soon. When clicking on a link and waiting forever for the page to download, you're usually thinking, "Come on, come on. I don't have all minute!" (Thank you, JoAnna Brandi, www. customerretention. com.)

Keeping up with this constant rise in expectations is no easy task. The goal is to make it easier for your customers to do business with you. If you can create a Web site that is useful to your customers, you can build loyalty very fast. Faster and stronger than any other means known, aside from having pleasant, helpful, and omniscient people constantly available to answer your 800 number.

If your Web site is very good, it becomes a source of pride and a rallying cry for your sales force to take into battle. After all, good service adds value to any product, and automated service is hard to beat. Brand your service.

Unfortunately, as you read this book, your competitors are dreaming up new ways to serve their clients and, hopefully, yours. And they are dreaming 24 hours a day. The business world went global during the Age of Discovery, when Portuguese ships plied the seven seas. Now it is global and on a continuous basis. Sunset out your office window is sunrise out your competitors' window.

Your competitors know that customers are expecting more access to information about products, order status, and their specific business dealings between trading partners. Customers don't want to be told "no" or "the day after tomorrow" anymore.

If you can view your company through the eyes of one of your customers, you will quickly see what's required of your Web site. You will understand that the true value you can electronically offer customers is high-speed information.

If you can get your whole organization to constantly look through customer-colored glasses at every Web page you create, every process you initiate, and every customer interaction opportunity you have, you can grab the brass ring. Because it all comes down to winning customers once and keeping them forever.

The Lifetime Value of a Customer

The One to One Future (Bantam Doubleday, 1997), Enterprise One to One (Doubleday, 1999), The One to One Fieldbook (Bantam Books, 1999), and The One to One Manager (Doubleday, 1999) are all by Don Peppers and Martha Rogers with some help from Bob Dorf (www. 1to1. com). These are books that drive home one lesson: Since it's less expensive to sell something to a current customer than to drum up a new one, spend your time and effort getting as close as possible to your current customers.

This is a slap-on-the-forehead, D'oh!, tell-me-something-I-didn't-know sort of pronouncement. What makes these books must-reads is that you know it, but you're not doing anything about it. Even more important, today's technology lets us get closer to our customers than ever before. The competitive advantage to treating customers on a one-to-one basis is enormous.

It boils down to recognizing that customers mean more than momentary profitability. Momentary profitability means spending as little time with customers as possible. Call-management systems are being sold as call-avoidance systems. Phone representatives are measured on how many calls they can take a day.

There's something obviously insincere about a customer service rep who finishes a call with, "Thank you for calling Acme Rent-A-Pencil. Have a nice . . ." and then hits the disconnect button before the word "day" is uttered.

Instead, Don and Martha beg us to see how a little more care with each customer can turn each customer into a lifelong customer.

The lifetime value (LTV) of a customer is based on the premise that the most expensive part of the relationship is starting it in the first place. Field sales reps in the business-to-business world; advertising in the consumer marketplace; direct mail, print, and broadcast advertising; all around--it adds up. It can cost hundreds or even thousands of dollars to find a suspect, qualify him or her as a prospect, and close him or her as a customer.

Measuring LTV

The first step is thinking of your customers as assets. Just as you would want to spend more of your energy on building maintenance than on buying a new building every year, you want to focus on customer relationships as something of value that needs to be preserved. You want to calculate the net present value of the profit a single customer will generate over time. This is the sort of thinking that allows stores to sell loss leaders. If they can get customers into the shop and show them what a nice store they have, those customers will become return customers.

The questions that need numerical answers are easy to ask, but not easy to answer. Some creative accounting may be in order to give you some idea of the LTV of your customers:

  • New customers per year (or month, or quarter)
  • Customer loss per year
  • Revenue per customer per year
  • Cost per customer per year (acquisition)
  • Cost per customer per year (service)
  • Cost per customer per year (production and distribution)
  • Cost per customer per year (G and A)

A net present-value calculation is thrown in as a discount you apply, based on the time value of money and a rate you apply for risk. If 2 percent of your receivables end up as bad debt, that needs to be part of the equation.

In an ideal spreadsheet, the numbers apply to a specific market segment. If it costs three times as much to sell something to a teenager in the Northeast who is five times more likely to leave the fold within months, then advertising on MTV is not your best move.

You're going to use the resulting LTV to give you a compass. Should you spend more on customer retention--such as a frequent buyers program? More on upselling and cross-selling? Changes in distribution channels? Changes in customer complaint management systems?

Let's say that you run up the calculations on a loyalty program and determine that you can increase retention by X, if you spend Y. Arun through the spreadsheet might show that the cost of the program will be recovered in three years, but you've only extended the average customer life by two years and eight months. Not a wise move.

On the other hand, you might spend a great deal less on an internal campaign to get employees to come up with ideas on improving the customer experience in your company. Give a $500 prize every month to the employee who comes up with the best idea.

There's a wonderful old story told about a factory worker who suggested they change the fluorescent warning stripes surrounding automated equipment on the factory floor. His suggestion was that they paint them half as wide as before since the stripes could still be seen from a safe distance. The result of this change across the entire company ended up saving hundreds of thousands of dollars a year in paint.

Five hundred dollars for good ideas isn't much. The suggestion box can fill with little gems. How about adding a handwritten thank you note every time a customer makes his or her 10th purchase? Why not have a customer appreciation day and invite them all to the factory for a picnic? How about assigning a single service plus one backup to each account, so whenever customers from that company call or e-mail, they get the same person? Will those things make a difference to customer retention? Oh yes.

The only problem comes when you don't live up to the promise.

Being Held Up to Ridicule

A friend of mine recently tried to buy a computer for her parents from Gateway's Web site. She was initially pleased with the many configuration options available through Gateway's slick order form. But after she placed the order, there was no confirmation about the total price or the expected delivery date, and she found no way to get the critical information from the site. Concerned, she called Gateway. But she ran into a scenario that's all too common among companies just starting out in Internet commerce: The ordinary phone service representative couldn't help her with her Internet orders. Instead, she had to speak with a special Internet order division. After she finally got connected to the right person, the harried representative told her that systems requested through the Internet were on back order for three weeks and that she'd be better off canceling her order, then placing a new one the traditional way: by phone.
Dylan Tweney
Infoworld, November 9, 1998

Stories like this are all too common, indeed. And while it's one thing to upset your customers, it's another to be vilified in print. Some say bad press is better than no press at all. Those people live in Hollywood.

The Industry Standard and Information Week magazines both published articles entitled "Customer Disservice" within a month of each other (May and June, 1999). They weren't playing copycat--it takes too long to create these articles for one to have inspired the other. They were simply reporting on a common theme: Customers are being treated rather shabbily online, and the miscreants are due to get their comeuppance in print.

The Information Week article described the dissatisfaction E* Trade (www. etrade .com) caused when its servers went down several times in February. That was the tip of the iceberg. The disaster came when customers tried to e-mail and call the company and found that the 300 new call-center agents were still in the process of being added--not up and running yet. The article also pointed out that a Web outage at eBay (www. ebay. com) caused that company's stock to nose-dive.

The Industry Standard published a chart it called "Service Without A Smile."

The Standard played secret shopper and e-mailed a typical customer support question--" Do you have [x] in stock?"--to the online customer help desks at the country's top 10 e-commerce sites, according to March (1999) traffic figures from Media Metrix.

While some of the sites came out smelling more like roses than fertilizer, others did not fare as well. bluemountainarts. com sent back an automated "robo-mail" that didn't answer the question. And it took 26 hours to do it. eBay only took 1 hour and 37 minutes to send two robo-mails, but neither answered the question. Download. com (CNET) took 8 days and 20 hours to send a personal message--and didn't answer the question.

Charles Wesley Orton went to some of the top pharmaceutical Web sites for an article on customer support in Web Merchant magazine (Summer 1999). At Parke-Davis, he couldn't find an address or a phone number. The feedback form asked for name and address and your feedback, but once submitted, it tells you your answer will take three business days to reach you. Prozac maker Eli Lilly had no contact information at all.

You don't want your company's foul-ups to end up in a magazine. Or in a book. All customers have bad service stories, and I've been on the Web as a customer long enough to have acquired some of my own.

The most frustrating instances are those that cause you to just give up. I got annoyed at my new Dell computer and went to the company's Web site. I found the form to fill out to describe my problem and did so at once. Then I realized I didn't have a record of the communication. Had I sent in an e-mail, I would at least have had my copy. So there is a good reason for autoresponders--tell me you got the message and show me the message you got.

In due course I got a reply. How long did it take? I don't know--I didn't have a record. The response did, however, include my original problem:

Name: Jim Sterne
Email: jsterne@ targeting. com
Service Tag: HTBQS
System Label: Inspiron 7000
Problem: Computer

Problem Description: Howdy--Love my Inspiron, but I'm baffled as to why it freezes up for about 5 seconds every now and then. I usually notice it while doing e-mail or word processing.

The cursor freezes on the text screen and won't display keyboard input. The mouse still moves the cursor around the screen. After the five-second freeze--the screen displays all the text I've written during the pause. It seems the keyboard buffer is still working, but the results just don't show up on the screen. What gives?

In reply, the helpful agent wrote:

Jim, The hard drive of the Inspiron 7000 goes to sleep every 3Ð 4 minutes despite the settings in the system BIOS & Windows 98. This is part of the temperature management of the unit (a firmware setting of the drive itself) and unfortunately cannot be changed. This is true on the Inspiron 3000, 3200, and 3500 as well.

I thought this was an excellent first effort, but I also didn't think it was the right answer. So I wrote back:

I've been watching it and it seems to do it even when the drive is running. I'm in a very quiet room this morning and can easily hear the hard drive doing its thing. Yes, it spins down every now and then, but the problem I'm having isn't concurrent with a sound-change in the drive. Any further thoughts?

This kind of give and take is what makes for good customer service. It's a conversation. It's a chance to let the customer have his say so the company can better address the customer's problem. The reply, however, left me flat:

Jim, As it is a firmware setting of the drive, it cannot be completely disabled. However, you can download the latest BIOS release for your system and install it--this will lengthen the amount of time between spin-downs and should cause it to be less of an interruption. You can find these files in the Dell File Library (http:// support. dell. com/ filelib)--input your service tag and it will give you a list for you to pick what you need.

A nice, detailed description. Dell hadn't overwhelmed me with information the first time around. It was only when I wanted to dig deeper that the customer support agent switched from a general answer to a more technical one. The rep even pointed to a possible solution. Wonderful. Too bad he or she simply wasn't listening.

While offering a fix to the problem Dell thought I had, the rep didn't notice that I had explained that that problem was different from the one I was experiencing. The damage is threefold. First, it was a rather innocuous problem. It's not going to get me to yell and complain. It's not going to get me to stop using the product. But it left a bad taste in my mouth regarding what is considered by most to be one of the best support organizations in the world.

The next damage done was that I have lost interest in having a relationship with this support organization. Rather than acquiesce to their desire for improvement . . .

* Tell us what you think of our service.
* Take our online customer support survey at:
* http:// support. dell. com/ support/ ssurvey_ e. asp? svctag=

. . . I'm not going to bother. It's not worth the trouble. The third, of course, is that you have now heard my sob story. Dell Computers had one agent who read my message just a little too fast and didn't quite answer my question--and now thousands of readers know about my dissatisfaction.

If I were just a little more miffed, I might have taken my attitude to a couple of sites designed for letting off steam--professional, independent complaint departments online.

Web Ridicule as a Business

Now, there are a handful of Web sites that are built for customer complaints. You really don't want your company to become the target of sites like www .complain. com (Figure 1.3) or www. EllensPoisonPen. com (Figure 1.4).

These sites are the Internet version of consumer advocates. They'll take on your customers' complaints and, with pens mightier (or at least more poisoned) than swords, they will charge after you until the wronged party gets satisfaction. These are professional complainers--people who have made an art of telling you just how lowly your level of service is and why you should grovel to get back into your customers' good graces.

Complain. com figures that it has the clout to make something happen. "We record your complaints in our database, analyze and report on trends and the details of cases here and in other media. . . . You get extra attention when your letter carries our 'via Complain! com' logo."

Ellen's Poison Pen takes on the same role.

Ellen's Poison Pen ® L. L. C. is a fee-based service that acts as a consultant and advocate for aggrieved consumers. People who have experienced problems with defective products, shoddy service, or uncooperative companies or who find a petition, an appeal, or another type of specialized correspondence to be necessary sometimes simply need another person's voice to make their predicament heard by those at the top of the chain of command. Ellen's Poison Pen ® L. L. C. becomes that voice. By writing clear, concise, well-documented and professional letters and adding a personal touch to each, the service helps consumers to gain a 75-90 percent successful resolution to their problems.

The Better Business Bureau had 138 customer complaints on file for Shopping. com about unanswered e-mail and busy telephones. Information Week magazine made that fact public in a very pointed way.

Are there worse things than being held up for ridicule by members of the press or complaint aggregators? How about by your own customers?

Customers Taking Up Arms

Get a customer mad enough and find your company the target of a grudge site. Beginning on June 13, 1996, Jeremy Cooperstock decided to get satisfaction from United Airlines: "Following a series of unpleasant incidents during a trip to Japan and Hawaii, taken on United Airlines, I sent a polite letter to United Airlines' president, Mr. Gerald Greenwald, with a copy to the director of Customer Relations, simply asking for a reply to a number of complaints relating to their service."

After being ignored for weeks, Jeremy received a form letter from an individual in United Airlines' customer relations department, which essentially ignored his problem. That prompted him to create his anti-United Web site, called Untied, on servers at the University of Toronto.

Over time, Jeremy's Untied site started receiving gripes from other unhappy customers. By April, 1997, United Airlines had made enough ugly noises to the University of Toronto to cause Jeremy to create a new off-campus site located at www. untied. com (Figure 1.5), which looked eerily like the official United site at www. ual. com (Figure 1.6)

After fourteen months, Jeremy finally received an apology from a United Airlines official. They were sorry their responses had been so unresponsive. In the meantime, www. untied. com had taken on a life of its own. In October, 1998, with financial contributions from readers, Jeremy put up a new complaints form, "with the ability to copy complaints directly to Denise Harvill, United's Director of Customer Relations, and James Goodwin, President and Chief Operating Officer of UAL."

In February, 1999, Jeremy hosted a database of thousands of complaints. A few samples follow:

If they don't want to bother being nice, then they should pick a profession that doesn't require people skills.

The flight crew had flown its FAA mandatory maximum 14 hours of flying in one day and a back-up crew wasn't available so I had to sleep at the airport.

My unaccompanied minor was put at risk by changes in schedules that nobody told me about.

I did not know that our company agent was not logging my miles when booking my tickets. I mailed in copies of all my airline tickets and receipts to get credit. Since it was a year past the mentioned miles, I was told that it was too late and too bad.

This site is not a pretty sight if you're a United employee/ owner.

In the October 5, 1999, issue of his monthly e-zine Digital Strategies, Mel Bergstein, chairman and CEO of Diamond Technology Partners, allowed as how, "At least half of the Fortune 1000 companies now face complaint sites developed by disgruntled customers."

Mel cited a trademark infringement and libel suit over "The U-Hell Website: Misadventures in Moving" (the case is pending). In self-defense, as a sort of preemptive strike, Chase Manhattan Bank registered a bunch of unflattering domain names such as IhateChase. com, ChaseStinks. com, and ChaseSucks .com, but missed chasebanksucks. com. According to Mel, that site is thriving. The solution? Mel says to kill them with kindness. "In the spirit of 'Living well is the best revenge, ' the most effective response of all is to make your e-commerce Web site so friendly that customers with problems will deal with you quietly, on your turf, on your terms."

Have you gone on an e-hunt for unhappy customers yet?

Customers Taking Up Lawyers

From an Iomega sales letter I received in early 1998:

Dear Valued Customer:
More than 12 million people--just like you--depend on a Zip drive to back-up, store, transport and share computer files ... easily, quickly, and securely. But as good as it is, we wanted to make the Zip drive even better. To do it right, we listened to feedback from our customers. Then we went to work.

From the notification from the State of Delaware Civil (class) Action 15809, I received on the same day:

The plaintiffs brought this lawsuit on behalf of themselves and all others similarly situated, claiming, among other things, that the warranties on Iomega's Zip, Jaz and Ditto drives implied that Iomega would provide technical support at no charge to customers with technical questions or problems. The plaintiffs also claimed that where customers with Zip, Jaz and Ditto drives called Iomega's customer or technical support lines for help, they were put on hold for unreasonably long periods.

The proposed settlement asked Iomega to create a "virtual consultant" on the Web, "based upon case-based reasoning technology capable of responding to customer technical support inquiries (1) a basic single question/ single answer format, (2) a more advanced multiple question/ multiple answer format, (3) a decision tree format, and (4) generated case queries using fuzzy logic."

The suit also called for an online tutorial, technical illustrations, and that these be made available to 250 concurrent users.

The lesson? You can be sued for bad customer service. The solution? The World Wide Web. Was Iomega an especially bad provider of service? Not especially. But then, even the best of them can be subject to public ridicule. Even Amazon.

No Site Is Sacred

In the June 7, 1999, issue of Network World magazine, columnist Mark Gibbs took on the one true paragon of e-commerce--Amazon. com:

E-comm: Love, Trust and Doing Wrong

"Love all. Trust a few. Do wrong to none."-William Shakespeare

I loved Amazon. com. I trusted it. And it did me wrong.

I was going to continue with last week's topic of talking to refrigerators but this, this ... this betrayal demanded attention.

I've placed numerous orders with the company and had been happy with the interactions and service. But Amazon. com just blew it.

It all started a few months ago when I ordered a book from Amazon. com in advance of the publication date. Acouple of hours ago, I received notification that the book had been shipped, and I was delighted. The e-mail notification was brief, and it didn't say whether the book I'd ordered was a hardcover or a paperback, so I thought I'd check.

I went to Amazon. com and found the book's listing straight away (the company has always had excellent response times). There were two versions listed as I expected: the hardcover for $17.50 and the paperback for $11.20. Which was I about to receive? Well, the price quoted on my order confirmation was $14 so I figured maybe it was a hybrid ... a hardpaper coverback perhaps?

I checked my order history (another excellent response time) and found that I had ordered the paperback. I called Amazon. com's customer service department.

A pleasant young man answered quickly (these guys are fast) and checked my order (the speed made tears come to my eyes). He didn't know what to do and handed me over (very quickly) to an "order specialist," a charming young lady who (in short order) determined I hadn't been given the discounted price but rather the original publisher's price.

No problem--the company would credit my American Express card with the difference. Great, problem solved. Except ...

It leaves the enormous problem that I no longer completely trust Amazon. com. Why? Because I wonder what other "mistakes" the company has made in my orders.

I pointed this out to the young lady who said she understood (I got the impression that she would rather I just said "thanks" and buzzed off--quickly--but I got the impression only fleetingly).

She said that perhaps she ought to report it as a problem to be fixed. "You're kidding," I said. "You mean that there was a chance that you might not have reported it if I hadn't questioned it?"

She (quickly) denied it, but I'm afraid I'm not convinced. After all, how often have customers spotted this kind of problem? Rarely, I suspect.

How often, when the problem has been reported, has the problem been escalated? I have no idea, but I have my suspicions that "none" is the answer. Now you might say this error was not a big deal, but I would have to disagree. In fact, the issue is not much different from the problem with telephone billing I discussed a few columns ago that got a lot of you fired up [Network World, March 1, page 62].

Our online world is becoming increasingly friction-free. We are offered the carrot of warp-speed transactions and equally high-speed service to counter the stick of wasting our time on unimportant "stuff" and, therefore, we tend to accept these Teflon transactions as reliable.

As consumers, we have to keep a keen eye on every transaction because those little errors happen, I suspect, more often than we know. And they can cost us money--sometimes a lot of it.

As vendors, we need to examine our systems very carefully because mistakes such as this profoundly undermine our credibility. We want to have our customers love and trust us. Doing wrong like Amazon. com is all too easy, and once you've lost your customer's trust, well, that's the beginning of the end.

Mark got a lot of feedback on that article, and a surprisingly healthy number of those who wrote to him were outraged that he was nitpicking a true-blue Internet legend.

The next week, Mark wrote the wrap-up:

One of the (supportive) readers wrote to say the same thing had happened to her and to a coworker. The lady had copied the message to Susan Robinson, Amazon. com's customer care and QA manager, and I followed the message with a copy of the column.

Robinson replied with a perfect response: Yes, they had a problem, she thought they had fixed it, she was now on a mission to boldly go, to seek, to destroy and, to ... well, get it fixed. Excellent. No whining that I was subjecting them to cruel and unusual treatment, no blaming the dark side, no calling me a loser [as one of Mark's readers had].

Now those of you who complained that I was holding Amazon. com to higher standards than their real-world counterparts were absolutely right. And so should you. A couple of you asked if I would complain if I were overcharged at the supermarket? What do you think? Of course, I would!

And if I found myself being overcharged frequently, I might well write to the store management. Unfortunately, in the real world, I can be overlooked. I can get shuffled into the circular file and there's not much I can do. But online, things are different. I, and you, can complain in a dozen different forums and lists.

Online, we can get action that can't be achieved in the real world and in doing so, we're doing vendors a favor: We're helping them to be better vendors--to provide better service, give better value and do more efficient business. And they need to be as good as they can be because the competitive pressures are far greater online.

My proof of this pressure, at least in the bookseller's world, can be found at http:// isbn. nu. On this site, you can enter an ISBN number and get a list of the prices offered by a number of book vendors. I just checked this site for the book that started the whole thing (Suits Me: The Double Life of Billy Tipton by Diane Wood Middlebrook, a unique, amazing and very well-written biography).

I found that Amazon. com's price ($ 11.20) is matched by Barnes and Noble and Books-A-Million (although you can get it at a 10 percent discount there if you join their Millionaire's Club for $5 per year), and beaten by Bookstreet. com if you take shipping cost into account (currently Bookstreet. com has a free standard domestic shipping promotion).

Under this kind of pressure--which is unlike anything in the real world--only the efficient, the accurate and the competitive survive.

And let us be clear: I think Amazon. com runs a terrific operation and despite my comments in the previous column, I will still be buying books from the company (price comparisons not withstanding).

And I will continue to buy products computers from Dell. But Mark's point is well made. We hold companies up to a higher standard online. Why? Because it's possible to deliver truly great service. If you provide service beyond expectations, you can earn the recognition you so richly deserve.

Becoming a Legend

The goal as a company is to have customer service that is not just the best, but legendary.
Sam Walton, Wal-Mart

Visiting the National Semiconductor Web site (www. national. com) one afternoon, I spotted a couple of typographical errors. I was deeply surprised. National Semi is one of the leaders on the Web, and I thought the company would be deeply embarrassed to see such a flaw. I quickly found the feedback form and wrote a little note.

Before the end of the day, I received a reply:

Date: 24 Aug 1999 19: 04: 52 -0700
From: SCDEVSFA01 <SCDEVSFA01@ nsc. notes. nsc. com>
To: jsterne <jsterne@ targeting. com>
Subject: Regarding Your Feedback

Thank you for visiting National Semiconductor's Web Site We have corrected the spelling mistake. Thank you for informing us. If at any time, you have another suggestion for the National Site, please contact us at http:// wwwd. national. com/ feedback/
InterActive Marketing at National

Why might this sort of response be legendary? Because it was not a robotic response from a computer; they thanked me for my efforts; and they fixed the problem immediately.

National Semiconductor deals with thousands of feedback comments a day. What happens when your company deals with tens of thousands?

United Airlines has discovered that it's cheaper to have customers book their own tickets at www. ual. com than to have them call the 800 number and ask a phone representative to do it for them. To encourage this behavior, United took to handing out extra frequent flier miles with every Web-booked ticket. But I didn't get my miles.

The seat-selection feature had a glitch that produced an error message. I had to call the 800 number and book the flights the old fashioned (and expensive for them) way. Then I decided to write to United and let them know of my efforts to earn extra miles, of their failure to credit the miles to me, and of my disappointment. The next morning, I received an e-mail asking for a couple of details, and that afternoon I was assured that my miles would be credited to my account.

Why is that legendary? United could have denied my request outright. The company could have waited so long to answer my inquiry that I gave up hope and stopped caring. Or, the airline could have done what so many do--not answer at all. But then, they have Jeremy Cooperstock at www. untied. com looking over their shoulder. You should act as if you did, too.

In his book Batteries Included! Creative Legendary Service (Century/ Arrow, 1999), Nigel Barlow defines legendary service:

Redefining the customer's expectations in your industry or sector--as, for example, McDonald's originally did with food retailing and Virgin Atlantic has started to do with airlines.

Generating passionate customer loyalty--beyond the temporary pull of loyalty cards. Becoming famous for service--where the service legend is spread by your customers. Ninety-five percent of owners of Saturn cars in the USA become passionate advocates of the product to others.

If there is one story I've heard over and over, it's the one where a book buyer has gone to Amazon. com and found the book that he or she wants is out of print. They click-to-purchase and get an e-mail within days that offers a specific copy of the book in a specific condition at a specific price.

The first time I heard that story, it was from my wife. Amazon had tracked down and offered her an autographed first edition for $85. She declined. One day later, they offered her a "slightly water damaged" version of the same book for $4.50. She was delighted. She told me, her colleagues, her friends, and about 2,000 people on an e-mail discussion list about her experience and how she thought Amazon. com was the best.

Customer lust, indeed.

Getting Started

The tools of the Internet trade are the tools of the database administrator and the tools of the librarian. But first you have to be willing to help your customers in any way you can. Having a fully automated droid handle all customer inquiries would be wonderful and is a goal well worth pursuing. However, infinitely intelligent droids aren't available this year, so you'll have to start from the beginning.

Contrary to the way most companies have gone about setting up Web sites, you can plan your work and then work your plan. From e-mail to FAQs (frequently asked questions) to search tools to databases, there are minimum requirements and significant returns.

Your task will be to start with something meaningful and move up the value chain. You will continue to move up this chain as your customers demand more, your competitors offer it, and you have to keep up. You will find that you must openly publish customer criticism, you must engage your clients in public discussions, and you must be willing to give them access to information that lives at the very center of your company's electronic nervous system.

At the same time, your customers will reveal information about their likes and dislikes, and their needs and their habits, like never before. They will tell you what they think, and the knowledge you glean from your customers will be unprecedented.

The winners in the new world order will not just publish and publish until there are no secrets left. The winners will be those who know how to interpret what their customers are telling them via e-mail, via discussion groups, and via mouse clicks.

The real winners are those who will tune into their customers as a way of life, and not an occasional exercise.

Meet the Author

JIM STERNE is a leading world expert on Internet marketing. He specializes in creating Internet marketing strategies for business. Sterne produced the world's first seminar series on Internet marketing in 1994 and is an internationally recognized speaker. Information about his company, Target Marketing of Santa Barbara, can be found at

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