FREEDyourMind

It's Almost Time . . .

I am here at eMetrics in San Jose for what will for sure be another great emetrics conference put on by Jim Sterne and his team.  And while I always look forward to eMetrics, this time will be even better.

Tomorrow morning at eMetrics we will be announcing a new product from ForeSee Results that builds on our exisitng product and the American Customer Satisfaction Index technology. 

A lot of great effort by our team at ForeSee Results has gone into the product, and it will take the web metrics ecosystem to the next level!  Details tomorrow.

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.

ACSI Results: Google Rules the Roost Again

Here are a few highlights of the ACSI E-Business Report, released today (and every August) and measuring portals, search engines, and news & information sites:

• ACSI scores for the e-business sector are way up: up 5.5% to an all-time high of 79.3 on the ACSI's 100-point scale. The jump is mostly due to Google's huge 10% increase to 86, the highest score ever achieved by any company in the e-business survey.
• Yahoo! had a brief lead over Google last year, but dropped 3% this year. The company has been dealing with too much to make customer satisfaction a top priority.
• Ask.com is down just a bit after a huge increase last year, but still maintains a huge improvement over time (they are up 19% since first being measured).

What I see is a fundamental shift in the way people are using and accessing the Internet. Search engines are gaining market share faster than portals as people move increasingly towards using search AS a portal to the internet. I think this shift is going to marginalize companies whose main business model is related to more traditional portal functionality, and we see that marginalization predicted by the ACSI results.

At this point Google and Ask.com are the only two e-business companies being measured by the ACSI that are enjoying any significant growth that has been sustained over time. Since satisfaction is a proven predictor of financial success, loyalty, word-of-mouth recommendations and even stock prices, the other measured companies should really watch out.

Get a free copy of the full report here.

So do the results surprise you? Were you expecting such a huge increase from Google this year?

ACSI Results Tomorrow

Keep an eye out for the ACSI scores for e-business companies, which will be released tomorrow morning and which are usually well-covered by the media. The following portals and search engines will be rated on the ACSI's 100-point scale in terms of how well they satisfy customers: AOL, Ask.com, Google, MSN, and Yahoo! These numbers are closely watched by analysts and investors as they have been scientifically proven to predict financial performance, loyalty, and even stock prices.

Last August, Yahoo very slightly edged out Google for the first time. Any early predictions for this year?

ACSI Results Released Today

Wow, a USA Today article about today’s ACSI report shows that customer satisfaction with airlines is at its lowest level since 2001. Of course, if you have flown anywhere recently, that probably doesn’t surprise you. Our local Detroit carrier, Northwest, dropped 6.6% this year!

Today’s ACSI scores also reported on hotels, restaurants (full-service and fast food), cable and satellite, telecom, utilities, and healthcare. These are all offline scores, but the web can have a huge impact on offline behaviors, and the web is what we focus on. In fact, we see that usually websites have higher customer sat than call centers and brick and mortar locations because they are convenient and the service quality is more consistent. So if you’re in one of these perennially low-scoring industries (airlines, cable, satellite, etc), you could be well-served to monitor customer sat on your website just so you can show management how much better the online channel performs. It can be a great way to justify investment in your website and to show the value of what you and your team are providing to overall operations.

How Will the Economy Affect E-Business?

From RIS News:

 “It is a sign of tough economic times. Retail store closings are up in 2008 by 25 percent year-over-year as the national economy continues to deteriorate. The International Council of Shopping Centers estimates there will be 5,770 store closings in 2008 compared to 4,603 in 2007. Surging gas prices, higher food costs and powerful inflationary forces are squeezing consumers and retailers alike.”

 And from the San Jose Mercury News:

Electronic commerce has grown about 22 percent in the past two years, said Hal Varian, [Google’s chief economist], who spoke at a forum on the state of the Internet economy at Google's new  Washington office. Ed Garrubbo, chairman of the Electronic Retailing Association, said online sales jumped 17 percent in the first quarter of this year. 

"The lesson here is that the economic slowdown is not an Internet slowdown," Varian said. "The Internet is looking pretty strong compared to other sectors."

I wonder if the slow down for brick-and-mortar retail is actually a boon for the e-commerce industry.

Research published in Claes Fornell’s recent book, The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference, he proves that a customer’s ability to spend is not necessarily a predictor of his willingness to spend. The best predictor, as crazy as it may sound, is whether or not that customer is satisfied. A satisfied customer will spend even if they don’t have the money.

Study after study shows that the online channel is the bright spot in any industry in terms of customer satisfaction. In the February release of the ACSI, we saw online retail (81.6 on the ACSI’s 100-point scale) trounce offline retail, which scored 74.2. Our study with Forbes about online financial services showed that customer satisfaction with online banking (82) outpaced satisfaction with banking overall (78).

So, in general, websites satisfy people more than other channels. Add that to increasing gas prices, and I think we have a few good reasons for people to move more and more of their business online. They can conduct business anytime, anywhere, and they don’t have to worry about inconsistency in service. And if the companies they interact with online are doing a good job satisfying customers, it might not even matter how much money they have!

My bet is that we will continue to see growth in the online channels of industries that are starting to feel the pinch of tough economic times, gas prices, and inflation.

Honda.com Has Best Auto Website

Automotive websites have a tough mission: they need to inspire brand loyalty and encourage sales and dealer visits without actually selling cars online, since most people will obviously buy a car in person.  Their mission is not unlike other brand-based websites that don’t conduct e-commerce, but the auto industry doesn’t seem to pay nearly as much attention to the web channel as the consumer-packaged good industry, for example, does.

Therefore, we’re launching the inaugural ForeSee Results Automotive Website Satisfaction Index, and we released our first set of findings today. Read about them in the Detroit Free Press or feel free to download a copy of the study from our website.

Here’s what we found: On the ACSI’s 100-point scale, Honda.com did best and NissanUSA.com did worst. The industry aggregate was 78. Individual automotive website scores are as follows:

    * Honda.com: 80
    * Chrysler.com: 79
    * FordVehicles.com: 79
    * Chevrolet.com: 77
    * Toyota.com: 77
    * NissanUSA.com: 76

The study also found that Honda.com does the best job leveraging the website to get visitors to buy a vehicle or visit a dealer. Chevrolet.com, FordVehicles.com, and NissanUSA.com were tied for being the least likely to influence customers to purchase a vehicle. Visitors to FordVehicles.com were the least likely to visit a dealer.

Considering the fact that top e-retailers like Amazon have scores in the high eighties, these guys still have a lot of work to do. However, it is impressive that Honda is doing such a great job leveraging their website to encourage dealer visits and sales.

The commentary has some specific usability examples that may be of interest.

The State of Our Union is Strong

Watching discussion of all the thorny political issues raised in this campaign has me thinking about the state of our union. Since ForeSee Results was founded in late 2001, we have: 

• Over 28 million completed customer surveys measuring satisfaction with online marketing and e-commerce initiatives, including:
  • Over 9 million completed customer surveys in 2007.
  • Over 1 million completed customer surveys in December 2007.
  • Over 500,000 surveys presented in a single day last holiday season.
• More than 30 benchmarks, including:
  • Industry benchmarks like retail, financial services, healthcare, federal government, and product companies and
  • Functional benchmarks that measure specific aspects of an online experience, such as browse, checkout, fulfillment, etc.
• Over 550 active measures across dozens of industries
• Major new investment in functionality, technology, and delivery.

It’s great to see that the ACSI has become such an industry standard online, and it’s an exciting time to be in this business!

Satisfaction with E-Gov is Down

Every quarter, we help the University of Michigan with the American Customer Satisfaction Index (ACSI) E-Government Satisfaction Index. We measure more than 100 federal government websites to see a) overall, are citizens satisfied with online government initiatives and b) how satisfied are they with individual sites?

The answer this quarter isn’t great: satisfaction is down for the third quarter in a row, and now it’s at its lowest score in more than three years. You can get the report, with ACSI scores and analysis for 100+ federal websites here.

One of the reasons I think the scores are dipping is the lame duck effect. President Bush, love him or hate him, has spent administration time and energy on e-gov, through making it one of the five goals of the President’s Management Agenda and through other means. But there’s no certainty about what a new administration may mean for e-gov initiatives, and I think that may make them hesitant to make the changes they need to make to keep satisfaction up. Steve Barr, federal columnist for the Washington Post, told a colleague that he usually doesn’t see the lame duck effect until summer, but he could see that might be part of it. He also mentioned that a lot of agencies got their budgets late, and that could be part of the problem as well.

A scan of the presidential candidates’ websites shows that only Barack Obama has anything significant about e-gov as part of their campaign platform, and his point is more about using e-gov for transparency than for citizens' convenience and ease or for cost-saving measures. After a very quick look, I don’t see anything on either Clinton’s or McCain’s website specifically about e-gov. (Though, you can compare your NCAA picks with John McCain, a crucial feature neither of the other candidates offers!). So who knows what the future holds for e-gov. It seems clear that it will have to be a priority of any administration both because it can save the federal government so much money and because it should be the mission of any administration to be citizen-centric, which is what the web is all about. But 2/3 of the candidates don't seem to be thinking much about it yet.

Hopefully I’ll be posting more often in the coming weeks. We’re coming down off a crazy period that has had me running dawn ‘til dusk.

ACSI E-Commerce Results

It’s that time of year again: time for the University of Michigan's American Customer Satisfaction Index (ACSI) report on e-commerce. The e-commerce report includes the e-retail, online travel, and online brokerage industries.

You can download the full report here, but a few things I found most interesting:

• Amazon has the second highest score in the entire ACSI (which includes 200+ companies), behind only Heinz. That is a stunning achievement for a retailer with such a broad mission.
• Online travel aggregators like Expedia, Travelocity, and Orbitz continue to slip and are having significant trouble differentiating themselves from each other.
• Online brokerage does better than expected, given the slowing economy (which usually results in lower satisfaction with any kind of investing). Customer satisfaction with Fidelity.com rises 5%, while Charles Schwab.com and TDAmeritrade.com also report increased satisfaction.
• Of all the sectors measured by the ACSI this quarter, e-commerce was the only one to increase. All other sectors saw customer satisfaction scores fall, and the overall ACSI score for the whole economy fell this quarter. I attribute this to the fact that competition is so fierce in the online world that companies HAVE to excel in order to survive. The best competitive differentiator is customer satisfaction. Still, it’s remarkable that the e-commerce sector now outperforms all other service sectors measured by the ACSI, online and offline.

You can read more in the Detroit Free Press and Network World.