InformationWeek

Customer service, like plate tectonics, is one of those things that seems to advance ever so slowly. In the physical world of retail shopping, airline travel, restaurant meals, and bank transactions, we've all encountered-and continue to encounter-situations in which the person on the other side of the counter, a complete stranger, seems to have a personal grudge against us. Excuse me folks: I know it's a lot to ask, even though I've racked up thousands of miles with your airline, but could I please have that seat I reserved? And would you mind if my luggage arrived with me?

The rules are different online. If you don't get treated right by one company, you're a click away from an alternative. The easy-come, easy-go nature of it all raises the stakes when it comes to customer service. If there was any doubt about that, last year's holiday shopping season erased it. It was almost painful to hear how one site after another suffered the consequences of unhappy consumers.

Have things improved? Sure. How much? Not enough. As reported in this week's lead news story by senior editor Jeff Sweat (p. 22), many online businesses are stepping up investment in their customer-service infrastructures, propelled by a growing urgency to show sustainable and profitable business models. The thinking is that to do this, Web sites have to be able to attract customers, satisfy them, and generate repeat business.

It's not easy. Sandra Charest, customer-care director with Toysmart.com, says online customers are "more demanding" than those that shop in stores. Factor in the absence of eye-to-eye contact, a pleasant smile, or handshake, and it's clear why E-businesses are turning to new products and services for help. A Web site's customer-service infrastructure becomes the main apparatus for establishing customer intimacy and loyalty.

Notably, the large, established software companies are not the only ones offering solutions. As our profile of Kana Communications illustrates (p. 78), small specialists have innovative products of their own. The improvements in customer-relationship management and service packages make the software choice more complicated. But improving customer service is a decision that E-businesses can't afford to put off.