March 21, 2006

Want To Lose Business? Ignore Customer Email

By Antone Gonsalves

Courtesy of

Companies are responding less to customer email, despite the potential for losing business, a market research firm said Tuesday.

Since 2000, the number of sites responding to emailed queries within a day has decreased to only 45 percent, JupiterResearch said in a report. In addition, the number of companies taking three days or longer, or not responding at all to customer email, grew 7 percent year over year from 2000 to 2005 to 39 percent.

While 92 percent of Web sites offered email as a customer support option, only 41 percent acknowledged receipt of a message with an automated response, the report said. In terms of industry, retailers remained fairly consistent over the five-year period, while other industries, such as finance and travel, showed significant decreases in providing automated responses.

Failing to maintain a high level of responsiveness is increasing the likelihood of losing customers, particular if they become angry over unanswered emails, JupiterResearch analyst Zachary McGeary said. Rather than provide poor email-based customer service, companies would be better off steering customers to other options.

"Fully, 85 percent of online consumers say they would be less likely to buy from a merchant again after a poor customer experience," McGeary said. "There's also a threat to offline sales as well, since 55 percent said they would be less likely to buy from the merchant offline."

Besides the damage to customer loyalty and retention, failing to respond quickly to email requests is also driving up costs, since ignored customers will often pick up the phone and call a customer service representative, the report said.

A key factor driving companies' unresponsiveness is the continued rise in email volume, coupled with a broad failure to buy the technology to handle the traffic increase, JupiterResearch said.

Rather than buy packaged applications built specifically for handling customer email from Web sites, companies are opting to build their own or make do with limited functionality in other business applications, in order to try to save money, McGeary said.

Homegrown applications, however, usually handle less email volume than packaged software, and require from 35 percent to 39 percent more staff, the analyst said. As a result, companies end up spending as much for homegrown applications without reaping higher performance.

"It's a bad decision," McGeary said. "They're spending money in the wrong places."

A second factor behind poor handling of customer email is an attitude that customers will contact the call center, if emails go unanswered, JupiterResearch said. That, however, can lead to angry customers and lost business.


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