Companies just don't get it. They spend millions on customer-relationship management software, but too often still ignore customers querying them via E-mail, according to a recent report from Jupiter Research.

Businesses are failing to meet customer expectations for service and information via E-mail, forcing people to turn to the telephone, said Jupiter's Customer Service Webtrack report. The results, said David Daniels, the Jupiter senior analyst who authored the report, come in several forms-all bad.

"By ticking off customers, companies are driving people to other channels," he said, pointing specifically to high-cost telephone call centers. "Fifty-eight percent of high-income customers turn to the phone when their E-mail goes unanswered, creating a snowball effect. Companies often end up answering that one inquiry twice.

"There's also a risk to the brand or to revenue," Daniels said. Of those using online routes to query a company, 91% are less likely to buy again after poor service, Daniels noted.

While 88% of surveyed consumers expect a response to E-mail inquiries within 24 hours, barely half of the companies sampled by Jupiter, just 54% , met these expectations in 2002. That's the same percentage as in 2001, said Jupiter, despite the fact that spending for online CRM continues to climb; Jupiter estimates it will soar from $2.3 billion in 2003 to $4.7 billion in 2008.

Even more worrisome to companies looking for a return on investment for their CRM expenditures is that 29% of companies took three days or more to respond to customers-or never responded at all. "It's incredible at this late stage in the game that these companies took three days or longer to answer," said Daniels. "If companies aren't making E-mail inquires a priority, they're better off not offering it as an option."

Jupiter's numbers are only a bit brighter that those from other research firms studying business-to-customer communication, including the Customer Respect Group, which tracks how companies treat their customers online. An survey conducted last fall by Customer Respect noted that 37% of Fortune 100 companies didn't bother to reply to customer requests submitted to Web sites.

And it gets worse. In a study released this month of large companies in the food, beverage, and tobacco markets, Customer Respect found that 55% didn't respond to customer queries submitted via their Web sites. Of those that did, only 29% responded within 24 hours, while one in 10 took four days or more to get back to a customer.

Companies are also missing the customer-relationship boat big time in other ways, said Jupiter. Too few companies bother to direct customers to their more cost-effective, searchable online self-service Web sites, or muddy the waters by recommending calling a toll-free telephone number-with all the costs that means to the company-at the same time as they suggest heading to a self-serve Web site.

Daniels has several suggestions for businesses trying to get a handle on their online customer service requests. At the least, he said, companies should implement some sort of auto-response mechanism to let customers know their messages were received and will be answered. Less than half of the companies Jupiter surveyed have auto-responders, or E-mail routing mechanisms, in place. "Nobody in their right mind would think of opening a telephone call center without routing hardware," he said, and the same should apply to online methods of customer communication.

Additionally, he recommends that firms leverage their knowledge assets, such as a knowledge database, and extend it to a self-service model. Even such a simple technique as displaying a self-service option before an E-mail submission form can deflect customer requests, he said. Among the companies that do this, and do it well, he cited Ford Credit and Wells Fargo.

Responding to customer online inquiries will only become more important, Daniels said. Jupiter's numbers estimate that queries will grow from 1 billion in 2001 to more than 3 billion by 2008. "Inadequate service in the online channel only accelerates the rate at which customers turn to their telephone."