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6/27/2003
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Survey: Online Customer Service Is Getting Better

The Customer Respect Group's annual study shows the nation's 100 largest companies are improving their Web-site design and handling customer inquiries--but there's still room for improvement.

Customers are getting better treatment online.

That's the finding of this year's study by the Customer Respect Group, which found that the largest 100 companies in the United States are improving in Web-site design, handling of privacy policies, and responsiveness to customer inquiries.

However, there's still room for improvement. Almost a third of the surveyed companies don't respond to online inquiries at all, and a sizable percentage doesn't post privacy policies. In the latter category, analysts were surprised to find that retailers did a better job at explaining how they handle customer information than financial institutions and insurance companies.

Privacy is particularly important to consumers, and a company's policy can have a direct impact on its bottom line on the Internet. Other studies show that almost two-thirds of web shoppers will abort a purchase if they're unsure how their personnel data will be used, CRG analyst Thorsten Ganz said.

Overall treatment of online customers improved to 7.0 this year from 6.5 a year ago, the CRG survey found. Each category and company in the study is assigned a Customer Respect Index, which has a top score of 10.

For privacy, the overall CRI was 7.5 this year, compared with 7.3 last year; responsiveness rose to 5.5 from 5.0; and simplicity of design and easy navigation increased to 8.2 from 7.8.

Some 10% of surveyed companies don't post privacy policies. Just as surprising, retailers scored higher than financial institutions and insurance companies. The latter would seem to have more of a need to be sensitive to customer privacy.

"The retail industry put more of a focus on explaining their policies, putting in simple words how the personal data is being collected and used," Ganz said. "Financial services and insurance companies are still lagging behind in making it easy for the user to understand their policies. Some privacy policies read like legal documents, where you almost have to have a law degree to understand what's happening to the data."

In terms of numbers, retailers scored an 8.1 on privacy, while financial institutions scored 7.7 and insurance companies 7.0. Insurers scored worst than 2002, when their privacy CRI was 7.5. The others scored better, with financial institutions making the biggest jump from 6.5. Retailers scored 7.9 last year.

A study released early this week showed that many consumers were confused over companies' privacy policies. The Annenberg Public Policy Center of the University of Pennsylvania found that 57% of surveyed consumers mistakenly believed that if the site had a privacy policy, then it wouldn't share that information with other sites or companies.

The center said its findings highlighted the failure of education efforts and pointed to the need for tougher federal privacy laws.

In the CRG study, 31% of the surveyed companies ignored customer inquiries this year, compared to 37% last year. Nevertheless, companies, overall, still appeared to be more concerned with Web-site design and adding applications to automate customer service than with answering customers' questions quickly with useful information.

Despite all the investments in software, "the responsiveness of companies is still disappointing," Ganz said.

Offering a communication channel to customers and then failing to follow through is almost a sure way to drive them to competitors--and risks tainting a company's brand. "Word of mouth spreads very fast," Ganz said.

The 10 companies with the highest CRI are:

Hewlett-Packard 9.7

Walgreen Co. 9.4

Costco. 9.3

Intel 9.3

Dell 9.3

Verizon Communications 9.1

IBM 9.0

Home Depot 9.0

J.C. Penney 9.0

Microsoft 9.0

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