FREEDyourMind

Latest ACSI Results From The University Of Michigan

The latest American Customer Satisfaction Index results from the University of Michigan were released yesterday.

In the E-Commerce sector, Newegg comes out on top, wrestling away the top spot historically held by Amazon, although Amazon's results, while down slightly from last year, nevertheless very impressive.  Check out our commentary on the E-Retail, Online Brokerage and Online Travel sites covered by the ACSI Index.

Now we all know we are in a tough economy, so does Customer Satisfaction matter in a tough economy?  Yes - more then ever.  What we have is a hyper-competitive environment where the rising tide that previously lifted all of the e-commerce "boats" is no longer rising.  In other words, the amount of consumer spending (which drives 2/3 of the economy) is shrinking.  Yet we for the most part we have the same number of companies competing for that shrinking consumer spending.  The result, a much more competitive environment where there will be more winners (Amazon, Newegg, etc.) and more losers (Circuit City, etc.).  So, there has never been a more important time to satisfy your customers. The satisfied customer will be the one that spends the most, is the most loyal, recommends you the most and is the last customer to leave you.  The dissatisfied customer will be gone as soon as they can.  And remember, you cannot manage what you cannot measure.

On a broader, economic stage, what do these results tell us?  In order for consumer spending to rebound, two things must happen.  Consumers must get gratification and satisfaction from their spending and consumers must have the means to spend, with cash or credit.  Well, customer satisfaction is holding it's own and now we need consumers to get the means to spend money.  Hopefully the Stimulus plan can have some impact.

A New Internet ?

Interesting article in New York Times over the weekend. 

Do we need a new internet?  There clearly are major security risks, and believe it or not, we are probably lucky that we haven't had more attacks on the internet.

The idea of a "gated community" is an interesting one.  If you want the security you give up your anonymity while browsing.  Would you be willing to do so?  I would.  I know there will be many privacy advocates that will protest loudly.  But the choice would be yours, in essence you would pick which internet you wanted to access.

There is a ton of effort going on to make the internet safer, one small step at a time.  And these are worthwhile efforts.  But to really fix the problem we will have to think out side of the box.  A better firewall or virus protection program won't solve the problem.  If you can write a program to protect something, someone else can write a program to break it.

What other ideas do you have?  And what should we call this next generation of the internet?

Ann Arbor Comes Out On Top - Go Blue!

Ann Arbor, home of the University of Michigan, takes the top spot in Forbes Top College Sports Town ranking edging out Palo Alto (Stanford).  And this coming off a 3-9 football season and breaking the longest running streak of going to a bowl game.  Just imagine where we will be next year!

The study was not only based on the strength of the Sports environment but also the quality of life.  And I couldn't agree more.  Ann Arbor is a great town for many reasons, not only the strength of the sports programs but also the culture, entertainment options, quality of schools, high quality of the educated workforce and the economic environment environment and community support for entrepreneurial pursuits.

 

Innovation from 1984

Innovation is part of what we need to help stimulate the economy.  When you think of 1984 what do you think about?

• George Orwell
• Detroit Tigers win the World Series
• The introduction of the MAC

Check this video out of Steve Jobs introducing the MAC in 1984.  Just think where we would be without that innovation.

Observations From Shop.org

Some thoughts and observations as a result of attending Shop.org's annual Strategy and Innovation Summit down in Florida last week. 

Attendance was way down from prior years.
Not a big surprise.  This has been a tough few months for retailers and it will continue for a while.  However, online retailing has done well in comparison.  Many retailers were still represented at shop.org, but fare less attendees per retailer.  Also there were many senior execs there.  For retailers, online is the area of hope (and growth) for 2009.

A tale of two strategies
There seem to be two different strategies being talked about, both at the sessions and in the hallways.  One strategy was we need to "cut, cut, cut", and hold on and wait for the recovery.  The second strategy was a time to fight, take share, innovate and rise above the competition -- and do it as cost effectively as possible.  Now while I understand what drove some folks to take the first strategy, it sounds like a death march.  How long can you get away with cutting costs to keep up with dropping revenues and market share?  Probably not long enough to survive.  Yet, a strategy of focusing your efforts on moving up, gaining market share is a drive to success.  I pick the second strategy every time.  Remember that what this economy has brought us is a very competitive environment.  The same number of people competing for a shrinking (or not growing) pool of consumer spending.  Those that can win the competition will survive and thrive.  Those that lose the competition will lose...and probably not exist in the future.  And how do you win - you satisfy your customers.  A satisfied customer will buy more, recommend more and is the last one to leave.  A dissatisfied customer jumps to the competition at the first chance they get.

Is it the year of mobile?
While there was a lot of talk about mobile, mostly centered around creating a merged channel experience; bringing the web into the store; the best comment I heard was it "was the year of the mobile, just like it has been since 1999".  Similar to the point above, those that move forward will win and those that don't will lose.  Just imagine this scenario, people are shopping in your store and when they find the product they want, they grab their iphone to check the product reviews.  But you don't have a web/iphone application so they go to Amazon and lo and behold, they order from Amazon with a simple click on their phone instead of in your store.  Not a good scenario (unless you are Amazon).  Much better if they are on your mobile/iphone app checking those product reviews, product specs, etc.

Simplicity?
Sat in on a presentation with a focus on simplicity.  I have to disagree with this.  This may have worked in a simpler time, where the rising tide lifted all retailers.  Not any more.  The competition is not going to be simple.  Unfortunately we have learned that the data you gather, the metrics you use are not going to be simple.  If we simply focus on conversion we will miss huge opportunities.  If we simply focus on bounce rate we are will miss huge opportunities. And if you are a multi-channel retailer and you simply focus on online sales you will miss huge opportunities.

 We have learned time and time again, there is not only one important metric, there is not only 1, or 2, or 3 important questions to ask.  Those that can take data and turn it into information will have the building blocks of success at their fingertips.  We need to move away from trial and error, we need to move away from gut instinct.  We need to apply scientific rigor to all we do. 

Simplicity leaves us with data, science takes that data and turns it into information.

Spend 10% of your budget on tools and 90% on people?
Another suggestion from a presenter and another one I have to disagree with.  Now this was said in context of metrics, data and analytics.   If you have to rely on that kind of an investment in people you are missing the science that is available to you.  This is not a very scalable model, and only as good as the people you have on your team.  We should be able to rise above that. We should be able to set up a system of metrics, a system of analysis and by utilizing scientific and proven techniques be effective. Now, if you have simple data you may need that many people to make sense of it.  But there are better ways -- take advantage of them.

It was much warmer in Orlando then it was in Ann Arbor
It was a shock to the system returning from Orlando to negative temperatures in Ann Arbor.  While I would love to show all my shop.org colleagues around beautiful Ann Arbor Michigan, I was quite glad to spend a few days in the warmer climate of Orlando.

Almost Famous

Remember that television ad that the state of Michigan filmed at ForeSee last year? Well, it's up and running all over the place--CNN, CBNC, Fox, etc. A friend's family even saw it on CNN in Bangladesh! Supposedly there will be billboards in airports all over the country too--so let me know if you see one!