FREEDyourMind

Holiday Post #4: Customer Reviews

Customer reviews. Are you doing them?

As part of our holiday research in 2006, we surveyed over 10,000 online visitors to one or more of the top 40 online retailers. We found that almost half of the online shoppers that recalled seeing customer product reviews cited them as the primary factor in their holiday purchase decision-making. 

A few key points:

• Customer product reviews drive satisfaction and loyalty and provide a competitive advantage for sites that offer them;

• Customer product reviews are a powerful influencer of the purchase decision for the critical group of first-time buyers;

• Internet pure plays lead adoption of customer product reviews, providing a competitive advantage online over multi-channel merchants;

• Shoppers on sites with customer product reviews were 5% more likely to buy online, 5% more likely to buy from the retailer the next holiday season, and 4% more likely to purchase from the retailer the next time they are in the  market for similar merchandise.

It can be a tough decision for those of you who are afraid that consumers will be brutally honest and slam a product. This is more of a risk for manufacturer sites than it is for retailers that offer many manufacturers of the same product. But in my opinion, it’s gotten to the point where companies that want to sell online have to offer customer product reviews to be competitive because if you don’t have them, your customers will just go somewhere else to see them.

Just remember, customer reviews are not a product development or a product management tool, they’re a marketing tool. Understand their value to your customers, don’t overestimate their value to you, and they can and should be a great addition to any retail website.

On Engagement

Eric Peterson, in his quest for meaningful metrics, has laid out his proposal for a comprehensive engagement metric.

I love the effort in the pursuit of the “best” metrics, hopefully helping make our jobs of web analytics not so hard. There are some very interesting components included in Eric’s visitor engagement metric, such as the brand component. But I still have some skepticism:

First, I’m not sure I really see what this tells me as a site owner or how to make this actionable. Because engagement, as calculated according to Eric’s visitor engagement formula can be good or bad.

• Click depth:  If it takes me 10 clicks to find something I should have found in 3, that doesn’t mean I’m more engaged, just more frustrated and closer to taking my loyalty somewhere else.
• Duration: I find this very problematic because of the number of times I’ve spent quite a bit of time on a website only to leave frustrated. I don’t think it’s a good measure of how engaged I am.
• Feedback Index: just because people left feedback doesn’t mean they are engaged in a positive way. Many feedback mechanisms promote as much negative feedback as positive. While it is always good to get feedback, I need to evaluate positive feedback very differently then negative feedback.

Fundamentally, what does engagement really tell us? If I’m in charge of Target.com, I care about what people bought, how the website influenced in-store sales, etc. Engagement doesn’t really get at what I need to know because it doesn’t tell me what people will do next week or next month or how to influence that behavior.

My website objective might be to sell products or services, to inform, to use as a primary resource, to build the brand, etc. How many sites have engagement as a website objective? What does engagement tell me about my success in meeting those objectives?

In Eric’s case, I assume his primary objective is to sell consulting services, secondary is to sell books. And that the features of his website, like the blog and the job board, are there to increase likelihood of the first two things and increase the brand value of Eric. So he should care a lot more about how engaged potential clients are than how engaged job seekers are. And what about a long visit that results in a negative comment (although – I am sure that never happens on Eric’s site :) ).

And again, while I appreciate the attempt to make this comprehensive, I think by measuring this many things and giving them equal weight, what you end up with is a watered down metric that will not be able to predict how well a site will meet the kinds of key objectives I mentioned above.

Bottom line: While a step forward, the visitor engagement calculation will not measure success. Success is: "did our users accomplish what they wanted?" and "were they satisfied?"

Holiday Post #3: Marketing and Acquisition Source

Here’s my third installment in my series of posts about e-retail at the holidays.

One of the things we looked at in our research last holiday season was what kinds of sources drive the best quality traffic to retail websites during the holidays. E-retailers can get a limited sense of the effectiveness of different customer acquisition sources from clickstream analytics. But only customer satisfaction analytics can show which drive the most satisfied shoppers, leading to future purchases, positive word of mouth recommendations and loyalty.

Here’s what our research showed:

• Familiarity breeds satisfaction. The largest and most satisfied group of holiday shoppers came to the site because they were already familiar with the brand and the products. This group comprised 37% of the total and had a satisfaction score of 78 on a 100-point scale.

• Promotional emails work. One-quarter of online holiday shoppers went to the site because they received a promotional email from the retailer. This group had a strong satisfaction score of 76, leading to a high level of loyalty.     

• Search engines and shopping aggregators drive traffic, but not satisfaction. A large percentage (28%) of first-time website visitors came through a search engine or shopping aggregator. But, this group had very low satisfaction (64), leading to a low likelihood to purchase in the future. So search engines drive traffic, but not as high-quality traffic as promotional emails.

• Word of mouth drives satisfied first-time visitors who buy. 15% of first-time visitors came to a site because of word of mouth marketing, and this group had the highest satisfaction and rate of purchase.

Regardless of how a site manages to get holiday shoppers to visit, the real challenge lies in keeping them coming back. During the holidays, e-retailers have a once-a-year chance to get new shoppers to come to their websites. More importantly, they have the opportunity to convert these “newbies” to loyal customers who will buy again and recommend the retailer to others. Have I ever mentioned that that delivering a satisfying site experience to these shoppers once they are on the retail site is the key to long-term success? ‘Cause just in case that message is getting lost somehow, I thought I’d throw it in there again.

Next up: customer reviews. Do you understand their value during the critical holiday period?

Holiday Post #2: Cyber Monday: Early Tips

I know it drives us all crazy when we go to the CVS the day after Halloween and they already have the holiday stuff out. And here I am contributing to the problem. Hey, I’m just jumping on the bandwagon along with E-Commerce Times, Internet Retailer (who says 45% of moms start holiday shopping in September and October) , and eMarketer, who clearly already have holiday shopping on the brain.

Catalog Success asked me to do an article last year on lessons learned from Cyber Monday, and it occurs to me that it might be more useful now that it was when they asked for it, which was right in the middle of the heaviest shopping time, when most retailers already have their strategy locked down and in place.

In the event that you’re still making tweaks to your Cyber Monday strategy, a few highlights from what I wrote when it was all still fresh in my mind ten months ago:

We surveyed 36,000 retail website visitors over the 2006 Thanksgiving weekend and found that shopper satisfaction dropped significantly on Cyber Monday from previously high levels over the holiday weekend. What can you do about it?

1. Set expectations if you can.: Decreased shopper satisfaction on Cyber Monday resulted at least in part from customers who were disappointed when they didn’t get the free shipping and price discounts they expected. It’s a classic case of higher expectations leading to lower satisfaction.

2. Understand the impact of your Web site on multichannel operations. A website isn’t just an additional sales channel anymore. It’s also a channel for research, branding, comparison shopping and offline influence. Get metrics in place now to understand how the Cyber Monday experience is influencing purchase behavior online and offline so you don’t write off abandoned shopping carts as a failure, when in fact the person just bought the same product from your store.

Our next holiday topic: what kinds of marketing and advertising drive the best quality traffic?

 

Audiocast #2 With Evan Schuman: Multichannel/Merged Channels

I recently did a series of audiocasts with Evan Schuman (of StoreFrontBackTalk and eWeek) about a variety of topics having to do with measuring the online experience. I posted the first one (about the Nielsen/ComScore "time spent" metric) last week.

This week's installment is about the challenges and opportunities of multichannel or "merged channel" measurement, which sort of fits in with my theme this week about online shopping during the upcoming holidays, since most retailers selling  holiday gifts online are working in a multichannel environment.

Hear the audiocast below if you have Quicktime (while I figure out how to support other players on the blog), or you can also get the audiocast here .



Let me know if you have any feedback on the content or format either by emailing me at larry.freed at foreseeresults dot com or by leaving a comment. I'll be posting the remaining few segments of my chat with Evan in the coming weeks.

I recently did a series of audiocasts with Evan Schuman (of StoreFrontBackTalk and eWeek) about a variety of topics having to do with measuring the online experience. I posted the first one (about the Nielsen/ComScore "time spent" metric) last week.

This week's installment is about the challenges and opportunities of multichannel or "merged channel" measurement, which sort of fits in with my theme this week about online shopping during the upcoming holidays, since most retailers selling  holiday gifts online are working in a multichannel environment.

Hear the audiocast below if you have Quicktime (while I figure out how to support other players on the blog), or you can also get the audiocast here .



Let me know if you have any feedback on the content or format either by emailing me at larry.freed at foreseeresults dot com or by leaving a comment. I'll be posting the remaining few segments of my chat with Evan in the coming weeks.

Holiday Post #1: It’s (Almost) the Most Wonderful Time of the Year

. . . And they’re off. I’m already seeing lots of discussion popping up about online holiday shopping. Internet Retailer reports that LL Bean is already promoting free shipping with no minimum (in October!).

We’ve done quite a bit of research in this area, so I thought I might do a few subsequent posts about the issues we’ve studied most closely. Nice and early, so we can all feel stressed out about the paltry 82 (!) shopping days we have left (or more like 53 days if you’re trying to make any last-minute tweaks to your e-commerce site before Cyber Monday!)

First up: free shipping, since LL Bean is getting the ball rolling. (By the way, LL Bean was ranked 8^th in our survey last spring of customer satisfaction with the top 100 online retailers, so they clearly know what they’re doing).

Our research last November and December of more than 10,000 shoppers to top e-retail sites shows that 41% of respondents cited free shipping as the primary factor in buying from the retailer. And, a full 79% of survey respondents said free shipping generally influences them to choose to buy from one retail site over another.

Free shipping, undoubtedly, is necessary to compete in the critical holiday season. But, is it really a competitive advantage? Does it drive short-term sales and long-term loyalty? And, are free shipping offers equally effective for repeat customers as for those that click on a retail site for the first time?

Here’s what we found:

• Offering free shipping leads to a 2-point (2.5%) bump in customer satisfaction and a 2-point (2.4%) increase in a site visitor’s likelihood to purchase online

• The impact of free shipping is negligible on the future behavior most tied to loyalty: likelihood to purchase next time (which is only 1 point, or 1.1%, higher for respondents offered free shipping that for those that weren’t)

• Free shipping generates goodwill as measured by enhanced perceptions of the image of the retailer and likelihood to recommend the site to someone else.

In short, free shipping is a cost of entry into the holiday retail game (customers have come to expect retailers to compete for their business during the holidays with deals, discounts and gimmicks not necessarily available during the rest of the year), but it doesn’t appear to be the most effective tool in driving long-term loyalty.

Free shipping is also an effective sales tool for first-time customers who may otherwise have bought from the competition. But, retailers should recognize that free shipping is more effective in creating intangible benefits than at impacting the bottom line.

Free shipping, especially when it’s truly free (no restrictions or limitations that make a customer feel the offer was “bait-and-switch”), can create a lot of goodwill for an organization. But, it won’t drive long-term behavior change,

So know what free shipping is and isn’t good for and use it accordingly.

More discussion of the pros and cons of free shipping in Bob Tedeschi’s column last week.

Next up: Cyber Monday tips.

Jobs, Jobs, Jobs!

I can't resist trying to use the blog to try and recruit some new people. We're growing like crazy, opening up new offices, and hiring lots of new people, most notably web research analysts, inside sales, direct sales, and a VP of sales.

Check out our website for a full listing of openings and please send over anyone who will do a great job! 

Net Promoter White Paper Now Available

I wrote a post a few days ago linking to a white paper I wrote about the flaws we found when we did a multi year study of the Net Promoter metric. You can now download the paper as a PDF on our website if you'd like a copy, or you can email me at larry.freed at foreseeresults dot com.

Audiocast #1 with Evan Schuman: Time Spent Metrics

I recently did a series of audiocasts with Evan Schuman (of StoreFrontBackTalk and eWeek fame) about a variety of topics having to do with measuring the online experience.

The first audiocast is available by clicking here , and it's about what Evan and I both consider to be the deficiencies of the newish Nielsen/Comscore measurement focusing on time spent (instead of just hits and clicks). I did a blog entry about it at the time too, and I haven't changed my mind. Time spent is at best an incomplete metric and at worst a misleading one.

We'll be posting the other segments in the coming weeks, and they include topics like multichannel measurement, where web analytics is going next, and online metrics in general. Let me know if you have any feedback on the content or format either by emailing me at larry.freed at foreseeresults dot com or by leaving a comment.

Webinar With Border's Books

We had a great webinar with Kevin Ertell (VP of E-Business) at Border’s last week. Even if you missed it, you can click here to hear the pre-recorded session.

We’ve worked with Kevin back in his Tower Records days and more recently at Border’s, where he’s been developing an e-commerce site that will launch in early 2008 to compete with Amazon.com and BarnesandNoble.com.

 

The webinar focused on how he has been measuring the impact of his comprehensive e-newsletter program on loyalty, and how he’s using voice-of-customer feedback to redesign the Border’s site in anticipation of the 2008 launch. Kevin also spoke at our Customer 2.0 event in Ann Arbor in early September, and is always great at offering colleagues really practical, tactical solutions for the challenges all e-retailers and e-marketers face.