How much telephone support do you need to provide? Too much and you ramp up your costs without any tangible increase in sales, too little and you lose revenue to your competitors who are able to deal with customer queries promptly over the phone. Here we give you some pointers to help you decide how much support you need to provide.
There is no doubt that the internet has revolutionised the way consumers are interacting and buying products. This has brought many challenges for companies due to the internet's ability to commoditise goods and services. It has also brought companies many benefits; with good analytics, you have a much better understanding of what makes consumers buy and interact online.
However, many companies are falling into a trap of forcing their products to be commoditised by purposefully reducing the customers ability to talk to them by not providing an easy-to-find telephone number. Whilst this might be appropriate in some industries, for others it will actively put customers off.
In this article we put forward a simple model to understand where your product or service might sit to ensure that you provide appropriate response mechanisms with your online offering.
Price vs complexity quadrant
When someone makes a purchase, they go through a number of different decision making processes. Whether they need more human interaction to help them with their decision to buy will depend on the complexity and price of the product. A regular purchase of a commodity-type product (e.g. music or books) requires no human interaction and is easy to click and buy. However, when buying a high-price product, such as a car, then a customer will want to talk to a salesman about the features, benefits and price. Depending on the product type, it is possible to create a simple 2 x 2 matrix that allows companies to work out whether they should be adding layers of phone based customer service into their internet mix as a way of differentiating their offering. This matrix looks as follows:
Low price / low complexity
This is the classic quadrant for high-volume, low-priced commodity-style online businesses such as Amazon. Here a customer can compare the price of say a book and then easily click to purchase. There is no need to talk to a customer service representative (have you ever tried to find a telephone number on Amazon?) because the product is a commodity and it is all about ease of transaction. Companies in this quadrant use clever programs to replicate human customer service – i.e. Amazon's function that shows what other buyers bought related to what is currently being purchased. Other strategies are to have customer reviews and testimonials on the quality of service delivery to create reassurance.
Typical goods in this quadrant would be:
- Online groceries
High price / low complexity
As products get more expensive, there is a greater desire to talk to a human being. However, if a product is not complex (such as a fridge or similar white good) then this need to talk to a human is reduced if a brand if trusted e.g. buying a fridge through Curry's or John Lewis. If an online site is unknown or does not have great brand salience, then the addition of a telephone number will create reassurance. An example of this is an online appliances retailer which specialise in white good sales at a keen price. They have a very prominent number on their site and make sure they are easy to get hold of.
Typical companies in this area will be:
- Travel – flights, trains etc
- Concert and theatre tickets
High price / high complexity
As the complexity of a product increases, so does a consumers desire to talk to a human being increase. For instance, as soon as someone wants to add hotels and tours together to create package holidays, they need to talk to someone.
In the car industry people have been talking for years about online purchasing but even well known brands such as Tesco and Virgin who have entered this space by launching online internet retailing have not succeeded. Buying a car is an emotive and complex but irregular purchase. When someone buys a car they want to be guided through the process by a professional and therefore want to talk to them. In the car industry the telephone is a critical tool for customers to talk to and interact with dealerships and the manufacturer.
Typical companies in these areas are:-
- Travel agents
- Car retailers
- Financial services companies
High complexity / low price
There are few companies that fall in this area. Realistically, the only organisations that sit within this quadrant are government services such as NHS direct that have a telephone number but also sophisticated self diagnostic tools provided online. As people pay for their services through taxes, they expect to get them back for free but still have access to the providers. It is interesting to see that as part of the efficiency drive by the government, they are looking to drive more and more services onto the online route to try and reduce their costs and reduce interaction with humans.
The complexity / price model
Providing a prominent telephone number on a site creates reassurance and confidence in a business, but it also adds a layer of complexity and price to the service.
The challenge businesses face is working out where they sit within the complexity / price quadrant and the level of service they want to give. Once they have decided this they should then promote their telephone number as part of their overall service offering and make sure that they monitor its effectiveness so that they give up to the service offering they are trying to provide.