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B2B sites lagging in customer service

Many online exchanges do not respond to customer service inquiries, new research says, and most private marketplaces lack search functions that would let customers help themselves.

There is a lot of room for improvement when it comes to customer service provided by business-to-business marketplaces, according to new research.

Although 65 percent of business-to-business companies surveyed responded to customers' e-mail inquiries within 24 hours, about 29 percent did not respond to basic customer service inquiries at all, according to a study released Wednesday by New York-based Jupiter Media Metrix. The report also found that only 2 percent of companies have private marketplaces that feature an easy-to-use search function for customer self-service, and most consist of nothing more than FAQ (Frequently Asked Questions) pages.

The study, conducted in February, surveyed some 51 companies that operate private marketplaces, where business with partners, suppliers and customers is conducted over the Web. Companies surveyed included Lockheed Martin, Compaq Computer, and Johnson & Johnson.

Jupiter analysts say companies must improve customer service as a way to distinguish themselves from the pack, especially at a crucial time when the business-to-business sector is in a state of flux.

"Customer service really can become a product itself and one that differentiates those businesses from the rest of the pack," Jupiter analyst David Daniels said. "Service really needs to be viewed (by companies) as a strategic opportunity to advance levels of satisfaction."

Although online marketplaces have gotten off to a slow start, with some even shuttering operations, analysts still see the market growing from $131 billion in 1999 to between $2.7 trillion and $7.3 trillion by 2004. Private exchanges, in particular, are expected to experience the bulk of the projected growth, prompting many software providers to target the industry and many businesses to set up shop online with their own set of customers, partners and suppliers.

The need by companies to shore up customer service capabilities will also fuel demand for customer relationship management (CRM) applications. Companies such as Siebel Systems, Oracle and SAP, which all provide CRM software that handles a company's sales, marketing and customer service needs, may see increased momentum in this department in the near term.

"It's definitely fueling growth in the (CRM) sector," Daniels said. More software providers that initially focused on offering procurement software and content management applications are increasingly spreading their wings in this area, he added.

i2 Technologies, which focuses on supply-chain management software, this week signed a deal with Sun Microsystems to create a software bundle aimed at helping companies improve the way they sell and deliver products to their customers. i2, whose core software automates companies' suppliers and inventory cycles, also makes applications that track and manage customers' orders, fulfillment of orders, and delivery of products.

The Jupiter study showed that the majority of business-to-business companies are lacking basic customer service capabilities that can drastically improve online customer relationships and build trust between buyers and suppliers. This quality is imperative at a time when businesses have been slow to make purchases online--with most putting online procurement efforts on hold amid the broader economic downturn.

"The concerning thing is that there were quite a number of sites that we tracked that did not respond to inquiries at all, which is surprising," Daniels said. "Certainly with the market conditions such as they are, (companies) are missing basic prospect opportunities and certainly customer retention opportunities" by lacking these basic services, he said.

While 96 percent of companies offer e-mail customer support, the Jupiter study found that only 67 percent post a toll-free customer support number on their exchanges. Just 4 percent offer online chat for real-time responses to inquiries.

Meanwhile, a recent study showed that some 70 percent of online buyers spend less money at a traditional retailer after having a bad experience on its Web site, and that trend will likely be the same for business-to-business buyers who cannot find the information they need on a particular exchange.