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Customer Service Lags, CRM Spending Expectations High

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Posted April 4, 2003 By Robyn Greenspan     Feedback

Online customer service has not met expectations, but projections of increased CRM spending through 2003 may aid the market — and ultimately, the customers.

Online customer service has not met expectations, according to findings from Jupiter Research (a unit of this site's corporate parent), but projections of increased CRM spending through 2003 may aid the market — and ultimately, the customers.

Jupiter's 2003 report on the state of customer service revealed that only slightly more than half (56 percent) were satisfied or very satisfied with help via e-mail, and phone contact has become increasingly important to online consumers.

A staggering 88 percent of the 2,734 interview respondents indicated that they expect a response to their customer service e-mail within 24 hours, with an impatient 13 percent of them expecting a response in less than an hour.

Customers' Timing
Expectations for
E-mail Resolution
Longer than 48 hours 1%
Up to 48 hours 11%
Up to 24 hours 52%
Up to 6 hours 8%
Up to 3 hours 15%
Less than 1 hour 13%
Source: Jupiter/Ipsos-NPD

Unfortunately, the large portion of customers who have expectations of responses within 24 hours are left disappointed, according to Jupiter's analysis. Only 54 percent of the sites that Jupiter sampled responded to e-mailed customer service requests within that time period, resulting in lost business and/or increased call center activity.

Nearly 88 percent, on average, of shoppers who experienced poor customer service said they were less likely to buy from that company online again, and 11 percent said they would report their experience to a consumer protection agency.

If the solution is to throw money at the problem, the state of CRM may improve. Jupiter predicts online CRM application spending to increase to $4.7 billion in 2008 — representing one-quarter of total CRM spending — and META Group expects the CRM services market to increase by 5 to 6 percent in 2003 alone.

"Best-in-class IT organizations understand that CRM excellence is not predicated on software implementations alone," said Michael Doane, vice president of Professional Services Strategies at META Group. "Strategy, integration, deployment, and value measurement are key issues, and our research indicates that clients can have greater success when they tap outside consulting services for these areas."

Findings from a joint Aberdeen Group and RealMarket 2003 report were equally optimistic about spending expectations — $15.4 billion in 2003, fueled mostly by small-to-medium-sized businesses and midmarket companies.

More than half (52.6 percent) of the companies surveyed indicated that they would increase their CRM budgets through 2003, while 31 percent planned on staying the same. Only 16.4 percent said they were planning on decreasing their CRM budgets.

Customers seeking service may wind up taking a backseat to sales — 38 percent of CRM tools are expected to be sales-oriented, while 24.4 percent will be tools for service and support. Slightly more than 19 percent of CRM tools are expected to be used for marketing purposes.

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