FREEDyourMind

Seniors & E-Commerce

The next frontier of e-commerce: seniors becoming multi-channel shoppers, or better said, merged-channel shoppers. 

New research from the USC Annenberg School Center for the Digital Future shows a new multichannel shopping trend among seniors: researching offline and then purchasing online. Two-thirds of people aged 50-69 researched offline before buying online, and more than one-half of consumers over 70 did so.

The bottom line: consumers of all ages will choose the right channel for them, and you better meet their needs and exceed their expectations. In orther words: satisfy them!

A good survey tool will allow you to segment by age so that you can see if this trend is true for your customers too, and if so, how you can maximize the relationship between various channels to encourage purchase and loyalty.

Citizen Satisfaction with E-Gov Rises After Long Decline

Check out today's American Customer Satisfaction Index (ACSI) quarterly E-Government Satisfaction Index from the University of Michigan (108 federal websites are in the Index, and the data was comprised of more than 238,000 surveys).

The good news is that customer satisfaction with e-gov is up 0.7% to 72.9 on the ACSI's 100-point scale. That may seem a small improvement, but it marks the reveral of a trend that was a year in the making. More good news: a record number of sites (23) had scores of 80 or higher, generally considered the threshold for excellence.

The top five scoring sites were:

• Social Security Administration:  Help with Medicare Prescription Drug Plan Costs (88)
• Social Security Administration:  Internet Social Security Benefits Application (87)
• Department of Defense: America Supports You (87)
• National Library of Medicine, NIH    MedlinePlus (85)
• National Institutes of Health: National Institute of Diabetes and Digestive & Kidney Diseases (85)

Also interesting: citizens are more satisfied with e-gov than they are with offline government services, though e-gov still lags behind the private sector in terms of online satisfaction.

Since the proof is in the pudding, we ran the numbers to find out how satisfaction improves loyalty and right-channeling, and we found that highly satisfied citizens are significantly more likely than dissatisfied citizens to use a government website as a primary resource, recommend it to others and return to the site. A satisfied customer is:

• 84% more likely to use the site as a primary resource;
• 82% more likely to recommend the site to others; and 
• 56% more likely to return to the site.

Check out the report itself for four great case studies that show what some federal websites have done to incorporate voice of citizen into website development in order to increase satisfaction.

IRS.gov Sees Bigger Increase in Site Traffic Than Google or Yahoo!

I was reading a Bank of America Equity Research brief by Brian Pitz and Brian Fitzgerald that referenced recently reported June Web Traffic Trends reported by Comscore. What everyone's talking about is the fact that Google overtook Yahoo! as the #1 site in terms of traffic in Q2. Google had 13.4% year-over year-growth in unique users (were there really that many people that are new to Google?) and 51.3% Y/Y growth in page views, while Yahoo! had only 5% Y/Y growth in unique users and page views were actually down 8% Y/Y.  The difference in their growth rates really puts into perspective their respective strengths. In August, we'll see how each company did in terms of customer satisfaction when the annual University of Michigan report rating portals and search engines comes out.

But while Google and Yahoo! are interesting, I saw something that I thought was even more interesting.  IRS.gov experiences 336.9% Y/Y growth in unqiue visitors and 411.7% Y/Y growth in page views.  WOW. 

Think about the impact of that kind of growth!  Not only are the numbers amazing, they go a long way to helping us understand the role that the Internet plays beyond YouTube, Facebook and Amazon. 

So what could explain that kind of growth?  June is well after the April 15th filing deadline, which is usually when IRS.gov sees a surge in traffic.  I sure hope there weren't that many late filers!  I get an occasional phishing email telling me about some fictitious unclaimed tax refund, but there's no way phishing scams alone would generate that kind of traffic.  Some of the traffic is probably because of people going to check on the status of their tax refunds or economic stimulus checks and to determine if they qualify and for how much. 

Less than ten years after online government services became truly ubiquitous,  it's already hard to imagine not having access to all of the federal, state, and local government information and services that are available to us online. 

The truth is that increased online access is a win-win: we get better, easier access to information and services in a far more efficient manner then ever before.  One of government’s job is to provide services to citizens and anything that makes it easier for the government to provide information and services or easier for us to access them and take advantage is a huge win in this pursuit. 

But there is a second win here as well.  The increased use of the online channel allows the Government to provide services and information at a significantly reduced cost.  And this is good for all of us – a more efficient government, better use of tax dollars, and increased cost savings. 

Now, I know many of us have beefs with the efficiency of government, but just imaging it without the internet?  That is a scary thought.

I'll be writing a lot more about e-gov tomorrow when the quarterly ACSI E-Government Satisfaction Index is released. Citizen satisfaction with e-gov services has been slipping for awhile now, and you will have to come back to see if the 100+ federal websites measured in the Index fared any better this quarter.

Gas Prices Boost E-Commerce

More good news for e-commerce from eMarketer today:

Even as many brick-and-mortar stores are struggling, 11% of US consumers surveyed by Nielsen in June 2008 said they were shopping more on the Web as a result of gas prices.

"E-commerce is a bright spot," said Jeffrey Grau, senior analyst at eMarketer. "While retail store growth is in the middle-low single digits, e-commerce is still growing at least in the mid to high teens."

The idea that people are shopping more online because of high gas prices reiterates what our top 100 research found as well.

The Convergence of Internet and Entertainment Devices

Is the convergence of the internet and entertainment devices that we've been promised so long finally coming? 

Two recent news items on this subject: one about how Amazon is teaming up with TiVo to allow viewers to buy items featured in television shows and commercials (don't you use TiVo to SKIP the commercials?). The second is about how Netflix is teaming up with Microsoft to offer movies through Xbox 360 consoles.

What’s next, play MP3s on my car stereo? (oh, wait, I can already do that).

Shameless Self-Promotion

Thanks to Shane Atchison over at Zaaz for interviewing me for his ClickZ column this week on a very important topic: the ROI of Customer Satisfaction. It is a topic very close to my heart!

Customer 3.0 and Accelerated Darwinism

Harvard is doing a conference on Customer 3.0, which they describe like this:

"With a seemingly infinite array of options, customers now know that demand (theirs!) is in short supply. They dictate how they will consume—where, when, and how much – using a variety of community-based online tools. They are creating social networks, composed of the people they trust, that are rapidly becoming the significant channels of media distribution and capable of distributing marketing messages that surpass Madison Avenue in reach and impact."

This Marketwatch article describes Customers 1.0. 2.0, and 3.0. The way that they define Customer 3.0 actually sounds a heckuva lot like the way I defined Customer 2.0 in a white paper last year....we even did a Customer 2.0 private sector conference in September 2007 and a Customer 2.0 Public Sector conference in May of 2007.

But whatever you call it and wherever it came from, the concept is important: customers have a lot of power now, online more than anywhere. This has spurred what I have long called the Accelerated Darwinism effect: survival of the fittest and failure by the less than fit, faster than we've ever seen before. Since academic research has proven that customer satisfaction (when measured with a precise, accurate, actionable methodology) is a driver of future financial performance and stock prices at the company level, the conclusion is clear: only companies that truly satisfy their customers will survive. That's just regular business Darwinism. But it becomes Accelerated Darwinism online, where the competition is only a click away, barriers to switching are lower than ever, and companies are made and broken in a few months time.

In order to not only survive but to thrive in the age of online Accelerated Darwinism, e-businesses must harness the power of the customer to meet or exceed consumers' ever-changing expectations while also growing and sustaining a profitable business. The companies that can best enable the customer to flex his or her own increasing power are the ones that will prosper. Companies that fail to do so (as determined by their own customers, not by internal opinions and board meetings and self-proclaimed experts) cannot succeed.

The Future of E-Gov

We do a lot of work with federal government websites, and there is an interesting bill that's pending in the Senate (HR 404) called the Federal Customer Service Enhancement Act. The Senate is also taking up the E-Government Reauthorization Act of 2007.

Government is really struggling to provide high-quality customer service overall, and our research has shown again and again that citizens greatly prefer to interact with government (federal, state, and local) electronically.  This not only is what citizens want, but also provides a much more cost effective way of delivering information and services to citizens.  A win-win situation.  It is good for citizens and good for government.

There are a lot of people in government dedicated to providing superior access to the citizenry online, and I know a lot of eyes are on the election. It's hard to say what each of the candidates will do (or undo, as the case may be).  Hopefully we will continue to see progress in E-Gov as we prepare for an administration change.

ForeSee Results Will Be Sticking With Michigan

We're thrilled to share that the State of Michigan announced today that they would award us a $3.2 million tax credit to keep our global headquarters here in Michigan. We're growing faster than our office can keep up with, and we've had some tough choices to make about where to locate our North American HQ. But Michigan is really showing their faith in our future and our growth with this tax credit, and since I was born and bred in Michigan myself, I'm thrilled to be able to stick around. You can read a couple of articles about the deal here and here.

Note to E-Retailers: Don't Try and Emulate Airlines!

From Monday's Wall Street Journal:

Why can't Internet retailers be more like airlines?

Airlines have long known that business travelers will pay higher fares in return for maximum booking flexibility, and that leisure travelers are willing to give up some flexibility in order to pay less.

Recognizing and balancing these differences helps the carriers fill their planes to capacity while bringing in significantly more revenue than they would if seats were sold on a first-come, first-served basis.

The lesson for e-tailers: They, too, can reap rewards from managing demand -- in their case, by segmenting customers according to how they want their goods delivered. People who shop online can differ greatly in what they're willing to pay for delivery, and how flexible they can be on the time and date, when they have to be home to receive the package. If e-tailers adjust their fees and delivery options accordingly, they can not only increase revenue but also efficiency.

I sure hope retailers don’t try to learn anything from airlines--studies show that e-retailers do a much better job satisfying customers than airlines do.  The business models and market considerations for airlines and retailers are miles apart!  For one thing, competition is much fiercer in the retail industry. For another, retail consumers won’t put up with the price on each product changing every day.  The supply/demand model on airlines tickets may work (because we don’t have many other choices and because most airlines do it whether we like it or not) but I would not expect it to work in the competitive world of online retail.

Now, as for segmenting on delivery preferences--that sounds like what most retailers do today: charge for shipping and vary shipping costs according to how flexible the customer can be on delivery date.  

But actually, isn't it time that retailers thought a little harder even about that standard practice?  What is the real cost (not the accounting cost) of delivery?  With all the cost savings of web (compared to store) to the retailer itself, maybe the value of a consistent price across channels would be offset by the loss of revenue from shipping charges?  Time will tell, but something to think about.

My suggestion to online retailers: don’t try to learn from airlines! The airline industry sure hasn’t had much success lately.