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Cost vs. Customer Service: The Battle for Online Retailers

Article date: Wed, 02 Feb 2011 16:44 GMT

online retail experts

Are online retailers competing on price alone or is customer service just as important to businesses on the web?

According to a panel of online retail experts who debated the issue at a recent roundtable in Manchester, price points may drive first-time sales but it is customer service that promotes loyalty and repeat custom.

Joining Jonathan Bowers - communications director at UKFast - the host of the roundtable event - was Dale Hicks, founder of online industry networking business, The Fashion Network. He said: "Now it's easy for customers to go elsewhere. On the web, they just have to click a button, not walk another few miles so online retailers are competing on price quite a lot."

However, Glen Berd, founder of and Paul Walker, MD of craft materials retailer Fred Aldous, believe price is a secondary factor for online shoppers.

Berd says, "It's the loyalty that brings customers back not price."

Walker continues, "A lot of our customers are just discovering the internet and getting to grips with it. We make sure we keep things simple for them. And from a customer service perspective, we make sure they feel like they have ownership of the business. It pays off. I have customers coming to us asking if we can stock a product that they could easily get elsewhere but they would prefer to buy from us because of the extras that we offer."

The "Online Customer Service in Retail" roundtable debated the basic principles of customer service. Panellists agreed that honesty, consistency, developing a one-on-one relationship and, most importantly, promoting a community feel amongst customers are the key aspects of providing good customer service.

Jessica Lowe, press and marketing manager for Harvey Nichols Manchester said: "Customer service is any interaction with the customer - active or passive. For us that means the music in store, the decor, our staff - it's about making the customer feel happy. Our presence online is just an extension of that, giving them all the information they want or need. And we like to think our website is just as beautiful as our store."

The roundtable discussed the idea that customer service could be neglected as firms grow and agreed bosses should empower their staff with the authority to make executive decisions to handle complaints and keep customers happy.

Rob Galkoff, founder of Wilmslow-based The Business Consultants, warned about the dangers of companies losing sight of their customers' needs.

"Customers like the small company approach. It's too easy for a firm to grow quickly and shift focus from customer service and a one-on-one relationship to KPIs and call times. Bosses need to invest in and empower people at the coalface or they will see sales fall."

The round table discussions are held in association with UKFast with the aim of uniting business leaders to share advice and provide a wealth of ideas for other developing companies.

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