Imagine running a retail store blindfolded. If shoppers have a problem browsing or buying, they just go quietly to the store next door and leave partially filled shopping carts behind.
Online Issues Evoke Emotional Responses
Every so often you run a “shopper analytics” report to learn where they came from, the path they navigated in the store, how long they stayed, the percentage that converted from a visit to a sale, and the average order size per transaction. But the data doesn’t tell you much about what really happened on their online experience, or how to fix it.
Of course, you’d never run a real store like this. Attentive clerks can see when someone needs help finding a product or completing a transaction, to deliver a great experience. But all too often, online shopping is managed as I described. Data rich but insight poor.
A new Harris Interactive study finds that too many online businesses are flying blind, losing a lot of business in the process. The study, commissioned by Tealeaf (a company that, as you might guess, offers solutions to help!), reveals that the online shopping experience is not getting better.
More and more people are shopping online, fueled (pun intended) these days by the rising cost of gas. However, just as in prior years, the study found that 90 percent of shoppers had problems while completing transactions online. Everything from trouble logging in to confusing navigation to technical problems.
Waves of Abandonment
OK, so what? Well, the problem is what happens after these bad experiences. With no humanware to assist e-shoppers complete their transactions, 41% take their credit cards elsewhere. Of those those that try to get help and have a bad experience with customer service reps, another 47% abandon.
Tealeaf figures the economic impact of at about 40% of all e-commerce business, or $57.3 billion. A billion here and a billion there, and pretty soon you’ve got enough money to bail out US banks.
But I digress. The story gets worse, because as we all know, people just love to share their horror stories. The study found that 84% shared their experiences online (58%) and offline (82%). So, you can add a few billion more for bad WOM.
Online Experience Trends
Ginormous Problem?
This study is obviously intended to draw attention to the fact that e-shoppers are having problems, and theoretically the impact is huge. But, I’m not so sure about that. 90% having problems? What does that mean? Let’s dig a little deeper.
The study methodology says that Harris Interactive surveyed 2,010 US adults on August 5-7, 2008, and found that 1,798 (89%) have conducted an online transaction in the past year and 1,572 (87%) experienced problems when conducting online transactions.
Fine so far, but that doesn’t mean that users experienced problems 9 times out of 10 transactions. One user could conduct dozens of online transactions in the past year, have one glitch and become one of the suffering 90%.
I conduct transactions online frequently, doing my bit to stimulate the US economy. I’m scratching my head to remember the last time I had a problem buying books, booking airline tickets or hotel reservations, or moving money between my bank accounts. Maybe I’ve just been lucky with the brands I frequent (Amazon, Expedia and Wells Fargo), but I’d probably end up in the happy 10% category using the Harris Interactive methodology.
My feeling is that economic impact is overblown, but the problem is still real—at least for some companies. Real, but unseen and underappreciated.
Another issue is that e-commerce is still growing nicely. Problems usually don’t get fixed until growth slows…or an executive understand the lost opportunity to get even more growth.
What Customers Want, Online
Let’s finish up by putting our customer-centric hats on. What does it take to make those online shoppers happy? As you can see in this chart, no big suprises: mostly “hygiene” factors like security, getting a confirmation notice and ease of use.
What is Important to Online Customers?
Now that you know that, what are you going to do? Do you really know if you’re delivering the experience that customers expect? Frustrated users don’t always call, and when they do, it can be very difficult to figure what went wrong based on verbal descriptions. Just ask the agents who field calls from online users.
To me, that’s the beauty of what Tealeaf offers—it enables companies to record customers’ actual online experience, figure out what really happened, and take action.
Danny Peltz, Wells Fargo’s EVP of Wholesale Internet and Treasury Solutions, has been using Tealeaf for the past five years. Speaking on a panel in San Francisco on September 15th, Peltz said that Wells Fargo has made massive investments in online tools to provide the convenience and efficiency that customers want to conduct transactions. (But not as a replacement for the human touch.)
He told me the business case to invest in customer experience analytics was “obvious.” With Tealeaf, if a customer calls in with a problem, the service rep can replay the user’s session during that phone call and see what really happened. It fits their customer-centric culture, and makes good business sense, because excellent service helps retain customers, he says.
If online transactions are a growing part of your business, and you’re not sure if your customers are happy, maybe it’s time to find out. Do it because it’s a customer-centric way to build more loyal relationships. Do it because you’ll increase revenue if you can cut the abandonment rate and sell more to the customers already wanting to buy.
But do something, before growth e-commerce growth slows and you’re forced to solve the online experience problems that you couldn’t (or wouldn’t) see, but were there all along.
Further Reading:
2008 Tealeaf Survey Highlights Potential Multibillion-Dollar Business Opportunity for Companies That Focus on Improving Online
This is very relevant in the current context where the technology offered by the internet is becoming a utility or an appliance. What commenced as a source of information and a window to the world has become an appliance in the field of online marketing and ecommerce.It is hence important to understand that there is a change in the online users and expectations from the online experience.
There is a SHIFT from the consumer requirement from the Internet of of “High technology” offering better performance to a “Commodity” catering to Consumer requirements of convenience, reliability and low cost.Internet technology in this context is “good enough”. It is the User Experience which dominates.
I agree with Vendana that the user experience dominates. The “hygiene factors” are now simply baseline capabilities for playing in the e-commerce sales game.
A second, related question is “what brings customers back?” Strong hygiene factors are important, but I’m wondering if the 2% Others slice of the pie (see blog above) represents another opportunity: happy surprises driven by information technology. Could changes driven by e-commerce innovation create a new experience–whether from products or process–that might be influential in bringing buyers back to an e-commerce website?
Bob, In days-of-yore i.e. before the Internet, in retailing the term was “management by walking around.” and it applied to non-retailing businesses also. Now, however, with computers and the Internet, while they do many very good things, they also have there negatives (Newton’s law prevails here also) by putting distance or steps between customers and talking to someone within the vendor’s firm. Press 1, Press 2, the beginning of the valley between customers and a live person, has expanded to many other areas of business. The web has expanded the “self service” concept to new heights.
No matter what one sells or does, when customers are asked or required to come to or into a resource’s place of business physically, visually, audibly, these are all forms of retailing. The same mistakes made in traditional retailing shows up everywhere.
In my business, I find that the decisions made by upper management concerning the face of their business are made by people who have never “stood behind the counter” or due to the nature of their position, do not see the retail relationship. Hence, it is no wonder that the results of their sales materials, web sites, customer interface do more to deter sales than help promote sales.
To bring this relationship into reality, I ask clients, to start making notes on all their personal interactions when they go outside their businesses’ doors – shopping, dining, going on-line, etc. I ask them to note both positive and negative experiences. Then, at the next meeting, I asked them, if they haven’t done so already to see if the positive experiences are also ones their firm’s customers experience or if these could be adopted into their business. That eases them into comparing thier negative experiences to what their firm’s customers are experiencing and what could they do to eliminate them. It would be unrealistic of me to think that all customer negative experiences can be eliminated, but striving to do so will cause less of them to happen.
In my retailing days, in striving to do so, I came up with a list of things I, as a manager, needed to hear from my staff as to what was not working. Shortly after I started my consulting business, I turned these into “Business Calisthenics” so that my management clients would have a format for getting this type of feedback.
Everyone in management has double jointed arms and can easily pat themselves on the back. Few if any, have double jointed legs that enable them to kick themselves in the rear. Business Calisthenics make is easier and less painful to do it. And that is what management-by-walking-around is in today’s modern business world.
Alan
Alan J. Zell, Ambassador of Selling, Attitudes for Selling offer consulting, workshops, speaking on all business topics that affect sales. He can be reached at [email protected] For more information, please visit his website, http://www.sellingselling.com Mr. Zell is the recipient of the the Murray Award for Marketing Excellence, He is a member of PNW Sales & Marketing Group,
Institute of Management Consultants, and Linkedin.com