The trouble with e-commerce is that it requires a human touch.
Lance Rosenzweig learned that lesson firsthand a couple of years ago when he fruitlessly tried to correct his order from Amazon.com after normal business hours.
As it turned out, Rosenzweig’s headache turned into an entrepreneurial idea. What about providing live, online customer services for e-commerce firms around the clock? Rosenzweig and business partner David Nash left the package manufacturing industry to form a company that would do just that.
The result is PeopleSupport.com, which was born last year in the back bedroom of Rosenzweig’s Beverly Hills house before moving to its current location in Westwood.
Now, seven months after developing a working product and two rounds of angel investment later, the company has landed 20 customers, including Metro-Goldwyn Mayer Inc. and Time-Warner Inc., and is adding new clients at an average of three a week.
“The notion that any Internet commerce can be completely and totally automated is a bit antiquated,” said Ken Cassar, an analyst for Jupiter Communications. “There is a growing need for outsourced customer-service providers as more companies that either don’t have the available capital or don’t want to build their own infrastructure look for help.”
That’s what attracted MGM. The studio launched its sprawling Web site and online store in April, and hired the company to handle customer-support demands.
“We want to help our customers, but we didn’t want to undertake the process of building the entire infrastructure in-house,” said Darci Pierce, director of production at MGM Online in Santa Monica. “In terms of the comfort level of our customers, PeopleSupport has been exactly what we wanted.”
Several different types of assistance are offered, ranging from having “e-reps” hold online chats with confused customers and answering their e-mail, to developing self-help Web pages filled with frequently asked questions and answers. All help is available 24 hours a day, seven days a week.
Rates vary widely, based on a per-mouse-click or per-minute basis, and on the complexity of the Web site and the training representatives require.
“If you don’t have that human connection, you lose out on one-third of your business,” said Barry Parr, director of Internet and e-commerce strategy research at International Data Corp. “We did a study that shows that a full 30 percent of customers go to a Web page, take notes, then order via phone largely because they want to talk to a human being.”
Despite a grueling schedule, getting hired as a PeopleSupport e-rep is statistically harder than getting admitted to some Ivy League schools.
“Roughly one in 10 is hired from those who come in for an interview,” said Rosenzweig, chairman and president. “One in 20 is hired from resumes sent in.”
E-rep applicants tend to be recent college graduates, and most have humanities degrees. Applicants undergo a battery of tests ranging from reasoning exams to simulated customer-service scenarios. They also must be Net-savvy enough to unearth certain esoteric information.
Once hired, e-reps undergo an extensive training program, which includes client-specific training. They meet with clients on a regular basis to learn not only about the history of a company but about changes on its Web site and new merchandise.
“We even try to match the culture of the company, so our e-reps for MGM are very trendy and hip in their conversation, whereas an e-rep for a business-to-business, e-commerce company is formal,” Rosenzweig said.
On July 13, PeopleSupport closed a $6 million round of investment led by Idealab Capital Partners and Eagle New Media Investments LLC, a Times Mirror Co. investment affiliate. The infusion of capital will go toward expanding operations and advertising.
For now, PeopleSupport faces no directly equivalent competitors. But as the market grows, that’s just a matter of time.
