The Nightmare before Christmas – UK Retailers jeopardise £5.5 billion in sales through poor customer service

Eptica warns: prepare now or pay later

Cambridge – 27th July 2010: UK retailers are risking their share of the £5.5 billion* Christmas sales boom by not being able to effectively handle the seasonal spike in customer service demand, which can increase by as much as 400%. Eptica, the leading provider of multichannel customer interaction software, warns that firms failing to ensure their customer service can cope at the most important trading period of the year could see their peak Christmas sales figures reduced by 5% or more.

Leading up to the festive season, contact centres are inundated with customer enquiries often involving large numbers of questions around the same topic. This increasing volume of routine, frequently asked questions (FAQs) can quickly lead to poor or slow service resulting in heightened customer frustration and lost sales at a time that represents 50-70% of a retailers’ annual revenue.

Research using Eptica’s customer base has shown that by reducing seasonal inbound FAQs and more efficiently responding to customers’ enquiries at peak times, retailers can increase sales by an average of 5%. Dee Roche, European Marketing Director at Eptica commented: “We looked at before and after scenarios at 280 organisations across a wide range of sectors and found a similar uplift in sales. This is achieved by businesses using increases in efficiency as an opportunity to redeploy customer service resources to sales conversion activity and on delivering high quality service and advice to help potential purchasers. These benefits can only be realised by diverting low value questions away from customer service agents.”

Retailers can experience four times their normal level of customer enquiries in the build up to Christmas including more than twice the normal volume of inbound emails. For contact centres that handle thousands of calls and emails a day, this increase represents a very significant volume of customer enquiries. A contact centre receiving just 500 calls and 750 emails a month could easily see that number increase to 2,000 calls and 1,500 emails respectively. Without the right systems in place it’s impossible to identify which enquiries are potential sales and which are basic FAQs so that they can be filtered, prioritized and handled accordingly. The challenge for retailers is to ensure that enquiries that would result in a sale, if they are handled promptly, aren’t lost because agents are tied up dealing with basic questions.

One company in Eptica’s study was able to half the number of inbound contacts it received from 6,000 to 3,000 during a peak customer service month, while increasing its sales compared to the same period the previous year. The company also achieved a reduction in the cost of handling each contact, from £6.50 to £1.70, resulting in a customer service saving of nearly £34,000 in a single month. The company achieved this by migrating routine questions online to be answered through Eptica’s advanced natural language meaning based customer self-service and email response management software. Both were deployed on a Software as a Service basis and were up and running 5 weeks after the company’s decision to go ahead.

With consumers starting their Christmas shopping months in advance the increase in customer enquiries for retailers can gain momentum as early as September. The spike that this creates in customer service continues to build through the January sales season into the end of February. Retailers will continue to face a high volume of post Christmas enquiries in to 2011 as customers contact them on issues such as gift returns and product support, and the cost of handling these can quickly eat in to profits.

There is still time and a variety of measures that retailers can take to ensure they effectively cope with the surge in customer enquiries and make the most of the sales potential of Christmas. Solutions such as Eptica Web Self-Service enables merchants to deflect emails and calls from the contact centre by making information easily available to customers on the retailer's website. The systems dynamic knowledge base expands with each new enquiry enabling a company's website and customer service channels to work together to improve customer engagement, give customers better information, resolve enquiries faster and maximize every sales opportunity.

“The festive season is the busiest time for contact centres as they are inundated with customer enquiries, often around the same topic. Retailers should do everything they can to maximize the positive effect of Christmas and any additional uplift in sales as a result of customers wanting to purchase now to avoid the increase in VAT next year. We strongly recommend retailers take time to review their systems and take action now so that they have ample time to bed in new systems ahead of the Christmas sales surge."  added Roche.
 

Notes to editors * UK shoppers have spent £5.46bn online in December 2009, IMRG