Part 1: Customers, loyalty and real-time chats

Hi Alexis. Can you tell us briefly about your background and why you wrote your book, "The E-Commerce Arsenal"?
I wrote the E-Commerce Arsenal because I heard from countless readers of my columns asking me for complete explanations of several of the "hot" technologies - personalization, targeted e-mail and CRM - that everyone was talking about on a surface level. In my own experience, most coverage of technologies is either at the press release level or at the bits and bytes level. Neither level is very useful to businesses investigating implementing technologies to solve specific problems.

My goal with "The E-Commerce Arsenal" was to provide an explanation of each of the dozen technologies I thought businesses wanted to know about and should consider implementing with a business-case justification, an explanation of how each technology worked, information about vendors providing the software and/or services and negotiating strategies for implementing in a cost-effective manner.

I had personally implemented six of the twelve technologies while employed full-time or while consulting for dot coms. I knew what a manager would need to know to make effective decisions. I wanted to put it all in one place, complete with research from major research firms (like BizRate, Forrester and Jupiter Communications, etc.) backing up all my numbers and claims.

I expect people to be able to make multi-million dollar decisions based on my research. That was my experience in consulting and I used the same standards in writing "The E-Commerce Arsenal."

Let's talk about your book and those technologies. One of the things you cover is customer traffic. Now, many companies think the only thing they need to do is generate traffic to their site, and the profits will come...
The key isn't traffic. It's qualified traffic. It's actually worse to get traffic that's not interested in what you're offering or bottom-feeders that only consider the price, than it is to get no traffic at all. If you take cues from the wrong traffic, you might change your value proposition, and turn your business on its head to get the wrong people to buy, for the wrong reasons. If you put your energy into getting qualified traffic, then it's not as difficult to turn browsers into buyers.

The chapter on search engine positioning focuses on attracting qualified traffic. Some of the other chapters, such as the ones on shopping wizards and real-time pre-sales chat, focus on making purchasing easy for the ready buyer.

Merchants need to realize the customers don't typically come to their sites to find a product but rather to solve a problem. Merchants that make the problem solving easy will sell merchandise. The technologies I discuss can help merchants solve problems for their visitors.

Do Web shoppers expect more from their experience than mall shoppers?
Definitely. What do you expect from a mall store? A teenager with a bad attitude who should be helping you, but is probably talking to friends, in a store that is blaring music. How can expectations of online shoppers help but be higher than that? The Web is or should be the premium shopping experience.

If you target your site to people who value convenience over price, then you have to make the shopping experience and delivery more convenient. If you aim at lowest price, than you will have trouble surviving because we've learned that customer loyalty is zero when price is the only consideration.

In talking about the "mall" experience, is it possible to successfully sell online things that are normally associated with the senses, such as food, perfume, makeup and body products? Is there a different strategy to employ when selling these items?
As long as the value you provide is worth the wait; some of these products are not only associated with the senses, but also with immediate gratification. I think you can sell these things successfully. The key will be offering an upscale product and shopping experience. Offer products and information, remember that you're really solving a problem and you will offer more than the local store can.

Have you ever tried getting a makeup question answered at the local drug store or convenience store? Forget it! If you can provide enough personalized information, then you give people the confidence to make the purchase without the value of touch, taste and smell.

You recommend implementing Real-Time Presales Chat to meet customers' needs - why?
Real-time presales chat gives customers the ability to chat with a sales rep on the site without disconnecting their network connection and without picking up the phone. This is crucial for people shopping from work. The chat takes place in real time with text. Typically, the sales rep will be able to push pages to the customer, showing the products they are having trouble finding.

The alternatives to pre-sales chat are email and phone support. Email takes too long. You want to respond to a customer's questions while that customer is still in the mood to buy. Also, email isn't interactive. If the customer has more questions or if you need more information to answer the question, then the dialog can drag on. Phone support is expensive and annoying.

Only about a fifth of Americans have more than one phone line in their homes. This means that they have to disconnect from the Web to make the call. Real-time chat can permit you to upsell and cross-sell the customer, as well.

Focusing on the customer experience, why is it so important to build loyal customers as a cost-effective measure?
It is far more expensive to acquire a new customer than to entice an existing customer to return. It's important to create loyal customers because you cannot afford to acquire enough customers to be profitable. It often takes three or more purchases by the same customer to recover the cost of acquisition of that customer. This means that you're losing money on the first three sales with each new customer.

You cite the strategy of using "shopping wizards" to help customers find what they want. Why is this important, and in what ways does it reflect the successful tradition of a brick and mortar salesperson helping a customer in a department store?
Shopping wizards imitate human conversation. The customer begins the dialog in pursuit, for example, of a laptop. In a physical store, the salesperson would ask something like, "What are you going to use it for?" which would help narrow down the selection. Each successive question and answer would help the salesperson narrow down the possible choices to arrive at one or a handful of best bets for the customer.

A shopping wizard is so much more useful than a complete list of products with specifications. A product list doesn't help solve any problem. Most shoppers don't know how much RAM they need or why they would want Level II Cache. With a wizard, shoppers don't have to become experts in the products they're buying. They simply answer the questions and end up with a manageable list of products to consider in detail.

At that point, the customers can review the product descriptions and make the final comparison between appropriate products.

What about consumers who shop on the Web simply because they want to be left alone? Are there sites where "overhelpfulness" would not be appropriate?
I recommend that sites selling, for example, weight-loss products, hair-loss prevention, adult material and other products that might prove embarrassing, avoid having customers sign in and provide help via shopping wizards and natural language search rather than via real-time chat.

The bottom line is that you have to give shoppers enough information to make the purchase. You don't have to be in their faces, but if they don't have the information, they'll be reluctant to make the purchase.

Continued...