Learning to Let Go

SAN FRANCISCO (03/05/2000) - Without much prodding, Michael J. Bridge will rattle off a list of practices that, for all the idealistic talk of customer service these days, are still surprisingly common in e-commerce:

Don't talk to customers, and make it damn hard for them to talk to you. Focus your efforts on getting customers through the door and keeping them inside until they buy something. * Make returning purchases difficult. Whenever customers visit your site, concentrate as much effort on intrusively gathering information about them as on selling a product.

Doing things differently was foremost in the minds of technology director Bridge and his colleagues as they built HPshopping.com, a direct-to-consumer electronics store that's a wholly owned subsidiary of Hewlett-Packard Co. "We design and manage the customer experience," Bridge says. Translation: They try to keep people from hating the site. The rest - taking, fulfilling and delivering orders - is handled by contractors. HPshopping initially went up in 1997, as the HP Outlet Center.

When the site relaunched in 1998 as the HP Shopping Village, it concentrated on attracting customers who were either already loyal to the HP brand or already inclined to shop online. Mindful of estimates that it costs about three times as much to acquire a new customer as it does to sell to an existing one, the company has worked to develop ways of making brick-and-mortar HP loyalists regular patrons of the site. One feature records customers' printer models and remembers what types of cartridges and other supplies they'll need.

Emphasizing repeat business makes as much sense for HPshopping as it does for e-retailers that depend on multiple sales within a short time frame, such as online CD and book stores. In fact, printing supplies and refurbished hardware products were the focus at the site when it was first launched. When it was relaunched in October 1998, it began selling new products, including PCs. Spun off as a subsidiary in May 1999, it began offering the entire HP line. The site recently phased out the "Village" branding to better promote its HPshopping URL.

The company doesn't divulge sales figures, but the numbers it does release show brisk traffic and substantial revenue growth. Between December 1998 and December 1999, traffic quintupled; the site had more than 1 million unique visitors during the past Christmas shopping season, boosting holiday sales 550 percent over the same period in 1998.

Along the way, HPshopping has won kudos, most importantly from consumers, who vote with their credit cards: 98 percent of its customers say they would buy again. Execs attribute much of the site's success to a refusal to give in to those tempting traps that have ensnared many an e-commerce launch. Most dangerous is the idea that customer service is an optional expense rather than an essential business need. "In the real world customer service isn't an add-on," Bridge says. "The first wave of online consumers were frontiersmen.

Now the typical consumer is less technically experienced, and they're looking for convenience. My grandmother isn't looking for an adventure."

Selling to Bridge's grandmother might require more work but the effort won't go wasted; executives figure a user-friendly site is as valuable in getting tech-savvy customers to come back as newbies. HPshopping contracts with a call-center, which leads online customers through transactions if they run into trouble. Other e-commerce sites get stuck on stickiness. Some sites design an online maze in the hopes of keeping customers so long that they might actually buy something.

Basic functionality suffers: Too many extraneous steps or pages can irritate customers whose idea of fun isn't sitting at a computer all evening. "It's challenging to avoid [the quest for stickiness]," Bridge says. "Everybody has a great idea to add to the site - bells and whistles to get people interested.

But what isn't sexy is crisp, clean transaction flow. We wanted to do that before we got carried away with other features."

It wasn't always so. At launch, HPshopping toyed with one machiavellian strategy that has occurred to virtually everyone in e-commerce: Ensure sales by making it difficult and expensive to return products such as bulky computer hardware. "Our initial thought was, that's good for us," says Shen Li, the site's general manager. "But in reality you want to make it simple to return things rather than difficult. So we come to the customer's door and even pay the return freight.

This removes one of the big hindrances of shopping online: fear of return."

Another pitfall for dot-coms to avoid is a fixation on gathering customer data for future use. If a site can't sell a product based on its merit, HPshopping figures, then what good will information do down the road? HPshopping allows customers to browse without registering and, if they do buy, the site doesn't bug them with nosy questions. "We've trimmed this down considerably," says Shirley Choy-Marshall, a marketing program manager.

That's not to say the company isn't interested in making a permanent connection with customers who don't mind parting with their personal information. All customers are sent e-mail messages asking if they'd mind more questions from HP. Customers who decline to participate don't get more e-mail. Customers who welcome further contact are offered a feature called My Printing Supplies Store, which records the model numbers of HP printers they use and makes it easier for them when they come back to buy supplies.

Choy-Marshall says executives plan to develop more one-to-one features to build better customer connections: "Relationships will be our strongest asset - and they will be exceedingly difficult for our competitors to replicate."

Richard Bierck is a financial writer in Lawrenceville, N.J.

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