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Small Business
Firms boost online service
November 9, 2000: 12:02 p.m. ET

As small firms rush to Internet, customer service needs will grow, study finds
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NEW YORK (CNNfn) - For many small companies, customer service is answering the phone when it rings. In the future, though, firms will want a suite of tools to manage those customer relationships.

Even today, e-mail has overtaken the telephone as the No. 1 way for customers to contact small businesses, according to a new report by Cahners In-Stat Group, a market research firm.

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  They are just now trying to get online and seeing the Internet as a viable business platform. They're not interacting with their customers yet.  
     
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  Kirsten Cloninger
Cahners In-Stat Group
 
In the SOHO segment of the market -- small-office or home-office businesses with fewer than five employees -- e-mail ranked as the most frequently used by customers, at 52 percent, In-Stat found, with toll-free calling a distant second at 19 percent.

In the small-business segment -- firms with five to 99 workers, according to the In-Stat definition -- e-mail matched toll-free calling as the most frequently used method at 29 percent each.

And this occurs despite low adoption of the Internet by small firms. "They are just now trying to get online and seeing the Internet as a viable business platform," said Kirsten Cloninger, an industry analyst at In-Stat. "They're not interacting with their customers yet."

That is changing rapidly, however. By 2004, more than 90 percent of SOHO and small-business firms will have Internet access, In-Stat projects.

Improved services poised to boom

As the marketplace develops, more small companies will want to adopt so-called "e-CRM" solutions to provide electronic customer relationship management, and more vendors will be competing to provide such services. In-Stat described several services that are poised to boom:

E-mail response management. At its most basic level, this involves an automatic acknowledgement that the company has received an e-mail, so a customer won't wonder whether the message disappeared into the ether. More sophisticated systems can pull pre-scripted responses from a database to answer client questions, with the replies typically routed to a customer service representative to verify the information.

Web callback. This service allows a Website customer to enter a phone number to request help, with customer service returning the call, ideally within a few minutes. The drawback to this approach is that it assumes the customer has two phone lines, to remain online while waiting for that incoming call.

Live chat. This enables customer service to communicate with a client in real time, having a text-based conversation in a pop-up window while continuing to surf the company's Web site. One big benefit to the business is that a single customer-service rep may be able to handle several inquiries at once.

Web collaboration. Often used with live chat or "voice over IP," this enables the customer service rep to view the same Web page as the customer, to help navigate the site and even to push content to the customer. But this, like live chat, demands 24-by-7 customer service with staff on duty to field the calls.

Dynamically generated self help. This approach elevates the "FAQ," or frequently asked questions list, to the next level by putting information in a knowledge base to provide specific help to an online customer, rather than generic answers.

Voice over IP. In-Stat calls this the "holy grail" of online customer service, using Internet protocols to enable customer service to speak to a customer using the microphone and speakers connected to the user's computer. "With the convergence of voice and data over the Internet, VoIP will play a major role in e-commerce and customer relationship management applications in the near future," the firm predicts, while acknowledging that very few users have adopted the technology yet.

Depending on their service providers

Indeed, for SOHO companies and other small businesses, all of these technologies will depend on service providers. Cloninger pointed to companies such as Bigstep.com and OhGolly.com -- Web site-building services for small firms -- as leaders in integrating more advanced e-CRM tools into their offerings.

It will be important for service providers to offer a "bundled solution" to these business markets because owners and managers in small companies lack both the time and the expertise to track down and evaluate competing services, Cloninger said: "Within these segments, one person wears many hats."

Telecom companies also are likely to start bundling some of these services into their small-business packages, Cloninger said, "but that hasn't happened yet." graphic

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Cahners In-Stat Group


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.