FREEDyourMind

Cyber Monday 2011: Satisfaction Off to a Slow Start, Despite Higher Sales

Our annual analysis of customer satisfaction on Cyber Monday is turning up some interesting finds.

1. Browsers (that's people who shopped online whether or not they bought anything) are less satisfied this year than last year.

2. In general, satisfaction is trending slightly down this year. We'll have to wait and see if that turns around.

3. Buyers are about equally satisfied this year and last year.

4. Apparel & Accessories websites (of all kinds, including shoes) are doing the best job satisfying customers so far this season.

It's very early; too soon to say if the slightly lower satisfaction this year will translate into a slowing down of sales in the coming weeks. Stay tuned!

ACSI Results: Google & Fox Rule, Facebook and HuffPo Flop

Today is the release of the annual American Customer Satisfaction Index (ACSI) E-Business report, which includes measures for social media websites, portals, and search engines. You can download ForeSee's commentary about the scores on our website.

Here's a quick infographic you can use with winners and losers; all scores are listed at the end of the post.

 

Social Media

Let's talk about social media first. Facebook's customer satisfaction score was up a bit, but still very low (66 on the ACSI's 100-point scale). This should be really scaring Facebook right now with the advent of Google+. Studies show that customer satisfaction (as measured by the ACSI) predicts sales, loyalty, and recommendations. If Facebook was sitting pretty with a customer satisfaction score of 80 or higher, I think it would be almost impossible for Google+ to break through that. It's hard to switch a social network--you have to reconnect with everyone, post new pictures, figure out a new interface... if everyone was happy with Facebook, there would be no reason to do it. But a score of 66 is just plain bad...which leaves the door wide open for Google+ to waltz through and steal market share from Facebook.

The other big news in the social space is that MySpace.com dropped out of the Index this year because we couldn't even get enough surveys to get a statistically significant sample, underscoring the widespread talk of MySpace's declining market share.

Search and Portals

I feel good about Google's chance to come in and possibly even own the social space with Google+, but in portals and search, Bing is making some serious inroads. I said before that if you are satisfying customers, you don't need to worry about people leaving, and that's true. Google search has a customer satisfaction score of 83, an excellent ACSI score by any standard. But Bing made huge improvements this year, and jumped from 77 to 82, just one point behind Google. Bing has built-in market share because it is the search engine on all Microsoft properties and partner properties. And while people are unlikely to go looking for a competitor if Google is meeting their needs (which it appears to be doing), they will undoubtedly run in to Bing and it seems to be basically as good after just a year in the market.

Online News

Foxnews.com has only been in the Index for two years and has topped the news category--by a lot--both years. This year we added HuffingtonPost.com for the first time, and it came in at the very bottom of the ACSI with a score of 69, the second-lowest score in the e-business category, behind only Facebook. When asked what people liked and didn't like about the site, the most frequent complaint was related to layout and navigation.

What's interesting to me is that in the news category, you have two sites that are basically designed for and frequented by "true believers" and they are at the top and bottom of the Index, although you could definitely argue that MSNBC.com is intentionally trying to be the anti-Fox for the left, and they are right in the middle. These news outlets and websites are clearly meeting user needs and expectations with a pretty wide variety of success. 

Here are all the scores reported today, and you can get much more complete analysis here.

 
We have a lot more data we haven't shared yet--the truth is that the turnaround time is pretty tight and so we analyze the basic ACSI numbers first and then go back and look at some of the other data we collected. Eric Feinberg, a director at ForeSee who has a ton of experience and knowledge about content, media, and entertainment sites like these will be guest blogging in the coming weeks about some of the other findings. We have some interesting data on how customers perceive ads that I'm looking forward to digging into a bit more.

Top 100: Social Media

Here is more information from our Top 100 Online Retail Satisfaction Index released earlier this month. Today's topic is social media.

Social media is turning out to be a touchpoint with enormous potential for satisfying shoppers and building loyalty and relationships. When we study our own clients using our Social Media Value Calculation, we see that social media has little direct impact on web traffic. In fact, in our most recent Social Media Value Calculation benchmark we saw that only 1% of site visitors came direct from a social media site.  However, 18% of the site visitors indicated that social media was an influence on their visit to the website. When applying this methodology we are able to attribute how much revenue is influenced by social media, helping companies truly understand the return on investment for their social media marketing efforts and also the value that the viral effect of social media is having on their business.   

Back to our Top 100 Online Retail Satisfaction Index.  First, when customers rate their satisfaction with various touchpoints, they are actually more satisfied with their interactions on Facebook and Twitter than many other customer touchpoints, including the website!

 
 

What social sites are most e-retail shoppers using? No surprise here. Facebook.

 

But where do they want to hear from retailers? 42% don't want to hear from retailers at all on social sites.

 
42% of survey respondents say they don't want to interact with retailers on social sites, but the next question indicates that only 29% aren't actually interacting with any retailers, which mean there are some people who SAY they don't want to interact with retailers on Facebook who are already doing so. That's why it's important to have a methodology that dig a little deeper. In fact, 69% of online shoppers are interacting with at least one retailer on social networks. This is a huge growth area for retail, and as people begin to be able to make purchases on Facebook and other social sites, understanding how this experience is impacting first-time and loyal customers will be critical.

 
 
Most people choose to friend, follow, or like a retailer on a social site to learn about sales, special offers and products. Very few do so for customer support. Understanding what your customers are coming to your site for can help you with the content on your social pages.

We also see that more than half of those who are interacting with a retailer on a social site have made a purchase because of it. Wow! This is a real testament to the power of those offers you're posting on your Facebook pages and Twitter accounts.

 

One final point of data related to the value of social media. We always ask about customer acquisition sources, and there are some major shifts year-over-year.

• Internet advertising and traditional media are both way down as a driver of traffic to websites.
• Social media, along with email marketing, are both way up.
• Company familiarity is also up (and could be due to more exposures/touch points on social media).

This data tells me we need to be doing a better job, as an industry, getting at the real value of social media.

Customer Satisfaction with Online Banking Rebounds

Customer satisfaction with online banking has regained it's previous high of 83 on our study's 100-point scale. We do this study once a year and have been since 2003. Today is the release of our 2011ForeSee Results Online Banking Study.

The full study is available for free download on our website, and read the press release with highlights here.

Credit unions have traditionally been the category of bank that has the highest customer satisfaction, but large banks had a huge increase this year and overtook credit unions.

 
The categories of banks included in the study were:

• Banks ranked 1-5 in size: 1) Bank of America 2) Wells Fargo 3) Chase 4) Citi 5) PNC.
• Banks ranked 6-10 in size: 6) US Bank 7) TD Bank 8) Suntrust 9) BB&T 10) Regions Bank
• Other large banks (such as HSBC, Fifth Third, Capital One, ING, and other national and large regional banks not in the top 10)
• Community banks (smaller local institutions)
• Credit unions

We also found that customers are reporting a huge preference for online banking, which means it continues to be a critical customer touch point. When survey respondents were asked which channel they were most satisfied with, 55% selected the online channel while 28% chose the branch, 13% chose the ATM, and only 2% chose call center and mobile banking.

If you want to know why large banks overtook credit unions this year for the first time, you can look at the elements of satisfaction measured in the research, including things like navigation, the ease of executing online transactions, privacy, and the look and feel of the website, among others. Large banks scored highest in all but one of these elements, which is why they also have the highest overall satisfaction. Credit unions still do very well in most of these areas as well.

As usual, it is the biggest banks that do the worst in terms of customer satisfaction, which is a bit surprising considering the resources they can spend on improving the customer experience. And it's not true across the board--these are just averages. There may be individual banks in the top 5 that do better than credit unions or large banks, and vice versa. An individual bank can't really manage customer satisfaction based on aggregates like these, but we share them in order to show industry trends and how they change over time.

Watch this space for more data in the next week or two about online banking, social media, and mobile banking.

What value does Social Media bring to your business?

This is the question that I hear from CMOs pretty frequently.  While there are some great tools to measure how much activity there is about your company on the social networks, understanding the value is another thing altogether.  There is clearly value of positive buzz that can happen on the networks, but is it driving real business? 

That question is what drove us at ForeSee Results to create the Social Media Value Calculation and we have some interesting data in our benchmark to share.

The Social Media Value Calculation allows us to measure the impact that Social Media has on driving visitors to your website and shoppers into your stores.  Not only understanding the impact of your marketing efforts on social networks but also the impact that the viral aspect of social media can have on your business.  By understanding both the direct referrals to your website and the influence that social media has you can really start to understand the business value it can bring to your business.

In our most recent benchmark we evaluated 188 websites and and over 295,000 responses from individual consumers last month alone.  We found that only 1% of the site visitors came direct from a social media network via a referring url.  Yet 18% of site visitors were influenced by social media. 

For the retailers in the benchmark we find that those influenced by social media had higher average order size than those not influenced to visit by social media. For individual companies that can get down to the actual dollars influenced by social media -- understanding the value tha social media brings to their business.  When we examine the purchase behavior of those driven to the site direct from a social network via a referring url we find that while they are more satisfied than the rest of the visitors and more likely to purchase they generally have a lower average order size than the rest of the purchasers.  That might sound strange at first, but the reality is they are often being driven to the site by a discount or promotion and have a tendency to be more of a discount shopper with smaller number of items purchased.

This approach is helping CMOs truly understand the value that social media can bring to their business.

Top 40 E-Retailers & Some Great Holiday Matchups

We released our latest Top 40 E-Retail Satisfaction Index for the holiday season. Download a free copy on our website.

Early reports coming in are that e-retail had a pretty good holiday, financially speaking. Online sales rose 15% and several other reports say that offline sales had a good year too. This is great news for the retailers who are satisfying their customers and who managed to build loyalty for the coming year by treating new and returning customers well during the holiday season, when retailers see the biggest influx of new customers and often make or break their annual numbers in just a month.

In this Wall Street Journal article Todd Slater with Lazard Capital Markets says "some retailers' better traffic and sales this holiday season may have been won at a price . . . {some retailers} are traffic winners but margin losers."

The methodology we use to measure customer satisfaction is able to actually quantify what kinds of things (price, navigation, merchandise selection, website functionality, etc) have the biggest impact on customers' satisfaction with a website. It's not the same for every retailer. For example, when we look at the three computer manufacturers included in the top 40 (Apple, HP, and Dell), Apple scores the lowest on price, meaning people's perceptions of Apple's prices are lower than their perceptions of HP and Dell's prices. Yet Apple still has the highest customer satisfaction of the group because the methodology indicates that price is not their highest priority. In the office supply wars (Staples vs. Office Depot vs. Office Max), price is a much bigger factor influencing customer satisfaction than it is for computers.

In other words...not only is Todd Slater right that some retailers are traffic winners but margin losers, some of them didn't even need to slash prices like they did. Some did need to do it that didn't do it. We find that the prescription for success varies so much from retailer to retailer, depending on their current strengths and weaknesses, their customer base, their customer expectations, and a lot of other things. Not all these things are under a retailer's control, which makes it that much more important to influence the things that are.

Okay, that was a little side diversion on price. What you're really interested in is probably the customer satisfaction ratings for the top retailers.

 
You can get all 40 in the report, but here are some highlights.

The Leaders:The clear winners this year are perennial top scorers Amazon and Netflix, both with a score of 86. Twelve other retail websites registered scores at or above 80, which is generally considered the threshold for excellence. 

• Amazon (down one point to 86 and the only retailer in the top 10 to decline at all)
• Netflix (86, tied with Amazon for the top spot)
• QVC (up three points to 84)
• Avon (up two points to 83)
• L.L. Bean (up three points to 83)
• Newegg (82)
• Apple (82)
• eBay (80)
• Musician’s Friend (80)
• VistaPrint (80)
• Walmart (80)
• Williams-Sonoma (80)

 The Most Improved: Only two sites experienced notable increases this year:

• L.L. Bean (up three points to 83)
• HSN (up three points to 79)
• Twelve companies win the award for most improved since they first entered the index: Costco (up 10 points since they were first measured, to 79), Avon (up eight points to 83), Toys R Us (up eight points to 77), Walmart (up seven points to 80), JC Penney (up seven points to 78), Staples (up seven points to 78), Target (up seven points to 77), SonyStyle (up seven points to 76), OfficeMax (up seven points to 75), Apple (up six points to 82), Home Depot (up six points to 75), and Sears (up six points to 74). These are all significant gains for these companies, given that even a one-point increase in satisfaction can have a significant impact on future purchases, loyalty, and recommendations

Highly-satisfied visitors to retail websites say they are 60% more committed to the brand overall, 61% more likely to purchase from the retailer online, 35% more likely to purchase from the retailer offline, and 64% more likely to recommend the retailer than are dissatisfied visitors. Nearly 20 years of research coming from both academia and the private sector shows us that increasing customer satisfaction (in the right way!) is one of the most powerful things a retailer can do in any channel to increase sales, loyalty, and positive word-of-mouth recommendations. Seriously: what else can a retailer do between now and next November to make customers 61% more likely to purchase, or even 10 or 20% more likely?

The last thing I'll mention before wrapping up is that the report has some interesting match-ups between direct competitors, showing why one company is besting another in terms of customer satisfaction.

• Amazon vs. Walmart.com:E-retail giant Amazon (86) and retail behemoth Wal-Mart (80) both have superior online satisfaction scores, but Amazon still holds a significant 6-point advantage.  Amazon beats Walmart.com in three measured drivers, or elements, of website satisfaction: content, functionality, and merchandise, and they are tied on consumers’ perceptions of their prices. When it comes to priorities for improvement, neither retailer registers price as a top priority for improvement, which indicates the two may not need to be doing the price slashing we’ve seen in the last week before Christmas.
• Staples vs. Office Depot vs. OfficeMax: The three major office suppliers compete closely in terms of satisfaction, with Staples leading at 78, Office Depot at 76, and OfficeMax at 75. The difference-maker in the office supply category is price, and Staples scores better than its rivals for the price element of the retail website experience.
• Netflix vs. Blockbuster:While video rental is not typically associated with holiday retail, Blockbuster and Netflix are still two of the highest revenue e-retail websites on the Internet.  Netflix is online only. Blockbuster has the potential advantage of being an integrated multi-channel retailer, but Netflix (86) beats Blockbuster (76) in two very important categories: price and website functionality. In this case, improving functionality is more important than price if Blockbuster is going to make any strides toward closing the satisfaction gap with Netflix.
• Apple.com vs. Dell.com vs. HP.com: In the battle of PC manufacturer websites, Apple (82) continues to dominate Dell (76) and HP (78).  Apple defies conventional wisdom because it achieves the highest customer satisfaction despite scoring below its rivals on perceptions of prices. However, Apple scores much higher than the others in website functionality, which is the most important driver of customer satisfaction for all three websites.

The press release is on our website, as is the full report. We'll be doing follow up reports in the coming weeks about mobile commerce, social media, and the multichannel impact of a good or bad website experience. Anything else in particular you'd like to see us cover?

Cyber Monday Satisfaction on an Even Keel

We've been watching how satisfaction changes on a weekly basis during the holiday shopping season since 2006. I will admit I am one of the people waiting eagerly for numbers from Comscore, Coremetrics, Neilsen, and others that report on Thanksgiving week, Thanksgiving weekend, and Cyber Monday holiday traffic, the truth is that those numbers tell us what has already happend. Customer satisfaction (when measured using the ACSI), tells us what we can expect to happen next because it is a proven predictor of future financial success and performance. In fact, research done last year showed that one-point increase in online satisfaction for an individual retailer in 2008 predicted an average revenue growth of 9% in 2009.

So what do we see happening this year? Everybody always wants to focus on Cyber Monday, but our numbers show that satisfaction on Cyber Monday was flat this year compared to last year. However, satisfaction during Thanksgiving week, on Black Friday, and on Thanksgiving weekend was just a bit up. This suggests to me that retailers have good reason to be cautiously optimistic about their holiday revenues.

That comes with a big caveat though...

Though the AVERAGE satisfaction for the 130+ retailers in our benchmark was in the range of 73 over the last week, the individual scores of individual retailers that make up that average spans a huge range. Within that average, we saw individual scores range from 42 to 88, a HUGE range of performance in terms of the customer experience.

We generally say that any customer satisfaction score over 80 is excellent, and one-third of the retailers in our benchmark got scores over 80. That's good news for them. But for the retailers under 70 and especially those in the 40's and 50's...not such good news.

There's more data and downloadable graphics on our website. We'll do another benchmark next Tuesday to report on how things have changed in the week since Cyber Monday, so stay tuned.

From Black Friday to Cyber Monday

Last week was Black Friday, the traditionally largest "in-store" shopping days of the year.  How did the e-retail sites do? 

comScore reported that for Black Friday, they reported only a 9% increase in online retail spending from last year.  Thanksgiving day online retail spending was up 28% from last year. This far exceeded the 13% increase they reported for online retail spending from November 1st through November 26th from last year. 

Coremetrics reported an increase of 15.9% online retail spending on Black Friday compared to last year.

Neilsen reported that traffic site traffic increased 10% on Black Friday over last year.

Keynote reported that almost 1/3 of online retail sites suffered significant slowdowns on Black Friday.

ShopperTrak reported traffic in stores on Black Friday increased 2.2% from last year, but sales only increased 0.3%.

A lot of different perspectives but all come to the same conculsion. 

We are on track for a slightly better holiday season than last year with the bulk of the increase will be coming from the online channel.

One of the biggest days for online retail will be this Monday, potentially surprassed by the last "free shipping day" that for most retailers will be Friday, December 17th.  It's pretty disturbing that almost 1/3 of retailers suffered performance problems.  I am pretty sure they knew the holiday season was coming. 

I am eager to see how well the online retail sites did in satisfying consumers during this all important Black Friday to Cyber Monday time period.  We know that satisfying shoppers during this critical time period will not only lead to higher conversion rate during the holiday season but will have a longer lasting impact in winning over those shoppers for the rest of the year. 

Here are some questions to think about ... and I would love to hear your answers!

• Will you do more of your holiday shopping online or in stores this season? Why?
• Will you visit online retail sites to do research during the Black Friday to Cyber Monday timeframe?
• Will you make purchases online during the Black Friday to Cyber Monday timeframe?

Facebook Flops, Google Drops, FoxNews Mops Up the Floor with CNN

So you may have seen by now that the big #ACSI report on e-business was released today (hyperlink to http://www.foreseeresults.com/research-white-papers/ACSI-e-business-report-2010.shtml) with a bang.

We've been doing the analysis for the ACSI since 2002, and there is usually pretty big news in one of the measured e-business categories, but this year, there's a shakeup in all three.

First thing's first: social media. This is the first year the ACSI has measured social media, and what a debut. With an average score of 70, social media has the lowest industry aggregate score of any of online industries measured by the ACSI. Wikipedia leads the social media industry with a score of 77, and YouTube comes in at 73. Industry darling Facebook registers a score of 64, only one point above MySpace (63). Facebook and MySpace have scores so low, the only other companies measured by the ACSI with such low scores are airlines and cable companies. Facebook seems to be suffering from concerns about privacy, frequent changes to the interface, and advertising.

	2010
Social Media Aggregate	70
Wikipedia.com	77
YouTube.com (Google Inc.)	73
All Others	72
Facebook.com	64
MySpace.com (News Corp.)	63

As for News and Information Sites, the big news in this industry is the debut of FoxNews.com at the top of the heap with a score of 82, which is five points above nearest competitor USAToday.com (77) and well ahead of other cable news providers MSNBC (74) and  CNN.com (73). NYTimes comes in at 76. FoxNews registers the highest score ever received by any news organization in the ACSI.Our data shows the high score could be in part because their viewers are very loyal and don't follow as many different news sources as users to the other measured outlets. Therefore, their expectations may be a little lower, which makes them easier to satisfy. But whatever the reason for their high satisfaction, it is off the charts for a news site.  If I were Fox, I’d be using this data in my media kit, because high satisfaction leads to high return visits and loyalty, which means more eyeballs for ads on FoxNews.com.

The Portals and Search Enginescategory is usually a pretty stable in terms of who dominates the field: Google has been at the top every year but this year and in 2007 (when Yahoo slipped momentarily ahead). This year, the "all others" group beats Google, which is a combination of all the other search engines not mentioned by name in this study. This year, they tended to be niche search engines. Google itself had a 7% decline this year (down six points to 80). Bing was measured for the first time this year, and it made a strong first showing with a score of 77, second only to Google.

So what do you think:

• Can Bing actually compete with Google, even with all the power of Microsoft? Last year I would have said no; this year I think Bing might actually have a glimmer of hope.

• Does Facebook's low satisfaction score pose any danger for the company? Or like other perennially low scoring companies like airlines and cable companies, does it have enough of a specialized market that it can dominate despite low satisfaction?

• Why can't the other cable news channels come close to FoxNews.com's high satisfaction score?

I'd love to hear what you think in the comments...

You can download the free report here: http://www.foreseeresults.com/research-white-papers/ACSI-e-business-report-2010.shtmlor catch me on Twitter (@larryfreed) with any questions about the findings.

Are Healthcare Websites Sick?

As the debate on healthcare continues, we decided to look at the healthcare websites that we measure at ForeSee Results and see how they are meeting the needs of consumers.  You can download the full report here.

Why look at consumer satisfaction of healthcare sites?  Well, as the debate goes on, one thing is certain, healthcare costs a lot of money.  And one way to reduce and manage some of those costs is better use of technology, for example, improving the quality and effectiveness of the healthcare websites.  The web brings us the opportunity of a win-win that is rarely available in other channels.  The first win is providing more information to citizens when they need it, anytime from anywhere you can get to the internet.  More information that is more readily available to consumers is a big win for consumers.  The second win is cost.  By providing more information, be it educational information about symptoms of a disease, potential side effects of a drug, information about the services provide by a hospital or information about deductibles and co-pays of your health insurance, we can lower the cost of providing the information to consumers.  A more informed consumer will make better health care decisions and lower the total cost of the servicing of that consumer.  A win - win!

So, how did the healthcare sites we measured do.  First of all, we surveyed more then  40,000 consumers who visited these healthcare sites in October and we utilized the proven methodology of the American Customer Satisfaction Index (ACSI) that was founded at The University of Michigan to measure the consumers satisfaction with the websites and how it would impact the consumer's future behavior.  We segmented the sites into four categories and their satisfaction scores are as follows:

• Government Health Information Sites     79
• Pharmaceutical Sites                           78
• Hospital Sites                                      73
• Health Insurance Sites                          64

The aggregate across all sites was 75.  To put these numbers in comparison, we look at 80 as the threshold for a very good site.  On average, the over 700 sites measured everyday by ForeSee Results, resulting in over 1 million completed surveys per month, score a 72, 4% below the healthcare index.  Not bad! 

The sites measured were wide ranging in their success to date, with scores as low as 42 and as high as 86.  86 is the same score that web leaders Amazon and Google obtained in their most recent published ACSI report.  Very impressive results from some of these healthcare sites.

I applaud all the sites (even the ones scoring in the 40's) because the first step to improvement is to measure.  You cannot manage what you do not measure.  And if you don't measure it you won't know if you improved.  So those low scoring sites are at the beginning of a journey that is bound to take them nowhere but up.

So, does satisfaction really matter for these sites?  Well, we talked about the win-win earlier, but lets take another perspective on it.  When we looked across those 40,000 consumers surveyed in October on these healthcare sites, we see that there is huge payback for high satisfaction.  When we look at the consumers who scored 80 or higher and compare them to those that scored 69 or lower, across all the sites, we see that the highly satisfied consumer is:

• 139% more likely to return to the website
• 169% more likely to recommend the website to others
• 153% more likely to use the website as a primary resource for interacting with the healthcare organization

This is truly a huge payback for satisfying your customers and results in the win-win, more information and services at a lower cost.