Boston Globe

BUSINESS INTELLIGENCE
Sites are on but no one's home: customer-care woes
By D.C. Denison, Globe Staff, 8/4/2002

Consultant Michael Katz admits ''it was a slow day'' in the winter of 2001 when he decided to see just how responsive commercial Web sites were to customer inquiries. He chose a mix of 36 national and New England brand-name companies, visited each, found the ''contact'' button, and e-mailed a simple, typical consumer question.

The purpose of his test was to measure the response time at each site. Katz was surprised by the results: 19% never replied, and although the top five responded in under an hour, the rest of the responses trickled back over the next seven days.

''The biggest shock was how many people didn't respond to me at all, because I thought that if a company went to the trouble of building a site and putting up a `feedback' button, they would want to take advantage of it,'' he said. The second biggest shock was who showed up at the top of the list: the Massachusetts Registry of Motor Vehicles, with a response time of just 9 minutes, followed by FleetBoston Financial Corp., General Cinema, and Mulberry Child Care.

Six weeks ago, Katz tried the test again (''what can I tell you, I had another slow day,'' he said) and discovered that the bad got worse and the good got better. In the first test, for example, seven of the 36 companies tested never replied; in the second test that number rose to 12. On the positive side, the top five companies in round one came back with an answer in 55 minutes or less; 18 months later, the top five replied within the first 14 minutes.

And the repeat winner: the Massachusetts Registry of Motor Vehicles. ''I know, go figure,'' Katz said. Others in the top five this time: Bright Horizons, Nordstrom, New England Cable News, and Amazon.

But, as before, Katz was most surprised by how many firms dropped the ball completely. ''It was interesting that the number of companies who didn't respond at all nearly doubled,'' he said.

Needless to say, Katz, who advises companies on e-mail newsletter strategies, sees this as a lamentable trend.

''I think a lot of companies are too busy for their customers,'' he said. ''It's definitely more fun to prospect for new customers — the thrill of the hunt is definitely a factor — but today is really a time to get closer to the customers you already have.''

What's interesting about Katz's experience is that it resonates with much of the current thinking at many of the mainstream management consulting firms, which are trying to come up with ways to rephrase that old standby, ''customer service.''

The current issue of the Mercer Management Journal, for example, features a cover story on ''Customer Value Growth,'' which suggests that in ''the age of the active customer,'' serving customers has never been ''as challenging and critical.'' At Bain & Co., Chris Zook is advising companies to ''profit from the core'' by, among other things, identifying ''who are your most potentially profitable, franchise customers.'' The latest issue of the MIT Sloan Management Review features advice on how to ''Capture Value in Customer Interactions.''

Businesses are also coming to grips with today's ''empowered consumers,'' many of whom are now constantly surfing among competitive sites to find the best deals on vacations, automobiles, and mortgage lenders — yet another reason why Katz believes that more customer care is wise. ''People purchase based on relationships, they purchase from people they like dealing with,'' he said. ''So any company that can effectively take care of their existing customers is in a great defensive position.''

''Think of the neighborhood hardware store that survives despite the lower prices and the better parking at Home Depot,'' Katz said. ''That's the kind of relationship with your customers you want to build.''

Alert customer service is also a smart recession strategy. ''At a time when people are looking for cost-effective ways to grow their businesses, there's no more cost-effective way than focusing on the relationships you've already got,'' he said.

''It's not the sexy end of the business,'' Katz said. ''But everybody knows its cheaper to service an existing customer than to find a new one. The lesson is actually pretty simple. When you've got someone who comes knocking at your door, answer it.''