Customer Satisfaction

April 29, 2008

Online Banking Outperforms Other Financial Services Industries

Our latest research with Forbes.com shows that online banking is vastly outperforming other online financial services industries. Banks scores an 82 on the ACSI's 100-point scale (up 12% or 9 points from the 2003 score of 73), while investing and credit card websites were both at 75. The online banks are clearly setting a high bar. A score of 82 makes online banking the bright spot in the industry overall (offline banking scored a 78 when measured by the ACSI in late 2007).

Most notably, we found that highly satisfied online banking customers are 31 percent more likely to buy additional services from the bank and 54 percent more likely to recommend the bank to others.

You can read more about the study in BusinessWeek or download the full report here.

March 21, 2008

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!

August 27, 2007

Response to Avinash

Avinash Kaushik wrote a great post this week on how you should choose an online survey provider.

Avinash worked extensively with ForeSee Results, so he’s very familiar with the ACSI methodology and how we apply it online. Since he’s been both a customer of web metrics and a partner of web metrics companies, he has a lot of knowledge and has given a lot of thought to what kinds of things people should consider when choosing a tool.

I just want to expand on a few of Avinash’s points:

#1] Mathematical Rigor: No matter what you choose look for a partner that can apply mathematical rigor to your results. I find so many results mis-interpreted because poor math applied in the analysis. Measuring survey results is not simply taking the average of the answers (averages lie!), it is measuring distributions and doing regressions. You don’t want to be bothered to apply the statistics and statistical significance, stress test to ensure your vendor does (then you can focus on analysis and not reporting).

This is a great point that too many people undervalue (just look at the Net Promoter fad: margins of error in the double digits, poorly-designed distributions, and people love the “simplicity” of it!). But I would take this point about mathematic rigor even further. It’s not enough JUST to have mathematical rigor: you can ask bad questions and have a survey pool that is not representative of your audience and you can still use mathematical rigor to interpret the results and get a low margin of error and high confidence intervals. Mathematical rigor ALONE is not what leads you to the holy grail; what leads you there is having a methodology behind the survey that is accurate, precise, and predictive and THEN making sure you analyze those results with mathematical rigor.

This brings me to a comment I had on Avinash’s point #3 (skipping past #2, which I’ll come back to because #3 is related to what I’m already talking about):

#3] Benchmarks & Indexes: Few people in senior management will take action when you tell them “our score on satisfaction (or content or navigation) is 6.0″ (or 45, depending on your vendor). But most of them will get off their butt and give your money to take action when you go to them and say “our score on satisfaction is 6.0 and amazon.com is 9.4 out of 10″.

 

Your actual score does not drive action, the difference between that and a industry benchmark drives action (no one wants to look bad by comparison!). And here is another subtle human factor: no one wants your opinion about anything, providing a comparison to a external benchmark depersonalizes the number and it is more likely that it will be “heard”.

 

 

iPerceptions uses the iPSI (developed by iPerceptions), ForeSee user the ACSI (developed by University of Michigan), both wonderful benchmarks you can compare your scores to and help motivate your management to take action! There are other vendors, look to see if your vendor will provide you with a benchmark or a index to compare.

 

Another great point, especially about the executive tendency to listen up when you can create an aura of rivalry with a competitor on industry leader. But again, just having a benchmark isn’t enough—anybody can create a methodology and an index and a benchmark. I could create the Larry Satisfaction Index—LSI ™ , write a white paper on it, and call it a methodology, but that doesn’t make it MEAN anything unless it is accurate and precise. An analogy: you’re on the golf course, you look down the fairway and decide it’s 120 yards to the green. You take out your nine iron and hit a perfect shot: exactly 120 yards. But you’re still 30 yards short of the green. You weren’t 120 yards from the green, you were 150 yards! You had a measurement, you had a methodology, but it was worthless because it wasn’t accurate, reliable, or precise.

 

To to this point about benchmarking, I would only add that people should make sure that whatever benchmark they chose has a proven history of being credible, accurate, precise, predictive, and reliable. What is a proven history? Well, the proof is in the pudding—there should be scientific, academic, published proof that the metrics are linked to financial performance and desirable future behaviors like word of mouth and loyalty. Just ask your vendor to show you the proof that their benchmark actually means something. The American Customer Satisfaction Index methodology has that proof.

 

Back to Avinash’s #2, about on-the-fly segmentation capabilities:

 

#2] On The Fly Segmentation Capabilities: Look for the capabilities that are provided to do on the fly segmentation of your data (aggregates lie!) . . .


There is gold in your ability to pick a particular segment of traffic that absolutely hates you and slice it off and drill down to why they were on your site, what products they own, what did they not find, and… then go fix it fast. Segmentation rocks! You want to be able to do it efficiently, yourself if possible, to reduce chances of vendor delays.



My one addition to this is that some companies may want to choose a company who will let you do the segmentation yourself, but it may be that what you really want and need is a seasoned team of experts to do this for you or help you do. Data overload is a big problem with metrics, and sometimes companies plan to do it themselves and end up doing nothing. So look for a vendor that can enable you to do that segmentation OR that can do it for you.

Last, but not least, Avinash mentions page-level vs. site-level surveys in his discussion of pre-survey considerations:

 

Page level surveys are user initiated (”tell me what you think of this page” “rate this page” etc) and serve the purpose of measuring the experience of the page. You can ask “site” level experience questions but the way they are initiated by users and local level at which initiation happens makes them a sub optimal choice for measuring site experience. They can good for measuring effectiveness of a page.

 

Site level surveys are usually presented to the users (”please give us a few minutes to answer these questions”), typically on exit, and are a great measure of the site experience (”what got you here today” “what were you able to do” “how much did we suck” “did you find what you were looking for”). They are good at measuring effectiveness of a site.

I would disagree slightly: page level surveys are more feedback and less measurement per se, for two reasons:

 

1) Since they are opt-in, they aren’t representative of your larger audience, which means they aren’t a true measurement.

 

2) The page that people give you feedback on tends to be several pages after the page that caused them the problem, because people don’t get immediately frustrated and opt-in to a survey to tell you about it. Frustration builds a little more slowly. So feedback that shows up on page surveys is not necessarily representative of the experience or effectiveness of THAT page in particular.

That’s it. Those would be my additions or clarifications to a very thoughtful post on how to choose a survey vendor. Any of your own to add?

August 09, 2007

St. John's Use of Customer Sat Metrics

Check out the recent article about the value of measuring customer satisfaction online, written for Health Leaders Magazine by Pam Hedman at St. John Health System, a group of 8 hospitals and more than 125 medical facilities in Michigan. St. John is a client of ours–they’ve been measuring customer satisfaction online for about four years now, and wanted to share how customer satisfaction metrics helped them figure out that:

  • the composition of site visitors was entirely different than what they expected, requiring changes to the site to address the needs of very specific audiences that weren’t previously considered significant
  • improvements      to search more than to any other area of functionality would have the      greatest ROI
  • improvements needed to be made to a transactional component of the website, resulting in a 138% increase in site traffic and a much better understanding of what was driving customer acquisition and retention.

Pam also talks about how she used customer satisfaction data to justify budget decisions and secure the funding she needs for web initiatives. Thanks, Pam, for the great article!

January 29, 2007

Customer 2.0: An Online Customer Centricity Summit for E-Gov

We are excited at ForeSee Results to be holding our first Customer 2.0 Summit on May 1st in Washington, D.C. for e-gov practitioners.

So what is the this summit all about?

We at ForeSee Results are bringing together a great list of subject matter experts including:

  • Megan Burns, Forrester Research Senior Analyst – Best practices to help organizations measure the online customer experience and to deliver better customer experiences across multiple channels.
  • Dr. Claes Fornell, Professor of Business and Director of the National Quality Research Center (NQRC) at the University of Michigan – Discussion of the role of customer satisfaction in the public versus the private sectors
  • Lee Rainie, Director of the Pew Internet & American Life Project – Research-based perspectives on “Understanding Internet Users”
  • Larry Freed, President & CEO of ForeSee Results (that's me) –update on new products and applications
  • Case studies and panel discussion – real-world examples of the power of customer satisfaction analytics
  • Product demonstrations – new and emerging product developments
  • Meet & greet — members of the ForeSee Results Client Services team

The goal of the summit is to create a dialogue on the importance of the online customer (or prospect, or visitor) with a focus on public sector organizations along with non-profits, associations and quasi government organizations. We are expecting over 250 attendees including many ForeSee Results customers along with others.

Watch for a similar event to be held in early September in Ann Arbor. The September event will have a focus that will cover all industries. More information coming soon!

Customer 2.0

We hear a lot about web 2.0, but what is Customer 2.0?

We have entered a new era. The customer is in charge! The web has created a world where the consumer is no longer captive. No longer is the company in control.

But why?

Location. Location, location, location used to be a rallying cry, the three most important words in your business strategy. But with the web, location as an advantage, and as a barrier to switch, has been greatly reduced.

Transparency. The web has made consumers more aware. More aware of price, more aware of product information, more aware of product quality and reliability, more aware of competition and more aware of what other consumers think. We now have smarter customers.

Low switching costs. The cost for a consumer to switch has been greatly reduced. When we are in a store, there is a cost for us to try another store (time and hassle). But on the web we can clone ourselves. The competition is only a click away, or better said, only a browser window away. We can be in two (or more) places at the same time.

So what does Customer 2.0 mean?

It means that companies need to change the way they think and act. They need to be aware that the customer is a smarter, more informed customer. That the captive hold we may have had on our customers is going away.

It means that those who meet the customer’s needs and exceed the expectations will win, both short term and long term. In other words, if you satisfy your customers you will get great returns. Sales, retention and loyalty! And that will lead to financial success.

Customer 2.0 means the impact of satisfaction is bigger and faster than ever before. The alternative choices are more then ever, and only a browser window away. Accelerated Darwinism; only the satisfied survive; and it happens in a blink of a browser window!

In closing, a quote from Claes Fornell.

"As long as repeat business is important, and as long as customers have a chance to go somewhere else, employees must deliver a high level of customer satisfaction for a company to be successful."

--Claes Fornell, University of Michigan, Ross School of Business


  Comments

  1.    
          Gard Gibson      
           
          January 30th, 2007      |       6:56 pm      
       

    This seems to be an obvious point. Customer satisfaction has always been a primary driver. What you didn’t mention was the effect that the social networking dynamic has now that it did not have as early as 2 years ago. Now that frustrated customer may actually have influence online because of their own blog/site or the ear if someone who had influence. Now instead of the water cooler, you have a browser.

         
  2.    
          Annie Martin      
           
          January 31st, 2007      |       2:51 pm      
       

    Another aspect of social networking is customer reviews (when they’re honest and not “reviews for purchase” like BzzAgent), where some critical comments can color opinions of purchasing a specific product or from a specific retailer. My daughter appreciated both the positive and negative comments about some speakers she was planning to purchase — she felt she could live with the negative (comment had more to do with the reviewer’s audiophile preferences) and the positive reviews reinforced her purchase decision.

 

January 18, 2007

What Worked This Holiday Season?

Many online retailers had great success this holiday season. Early results point to a 25% growth year over year for online retail. In an industry (retail) where we see low to mid single digit growth, we continue to see superb growth in the online retail space.

It begs a couple of questions.

Can it continue ?

Yes! No doubt about it. We continually see that consumers are more satisfied with online retail experience then with traditional brick and mortar experience. Consumers will go where they are satisfied…and more and more, that is the internet. And they are going there for a few different reasons that we like to call the 3 Cs.

  • Convenience: the anytime, anywhere value of the web. From the comfort of your own home, while you sit in your pajamas, watching a game on TV, you can go shopping. No crowds and no parking hassles. Sign me up!
  • Consistency: we always get the same answer online. How many times do we get different answers from sales associates or from call centers. Consistency leads to higher quality. Have you ever called a call center, not gotten the answer you want, hang up, call again, and get a different answer? I have. No such thing on the web.
  • Clear view: or transparency, the ability to know what products are available, the detail specs of those products and the price. As transparency happens, the consumer is now in charge. The web provides us a level of transparency that we cannot get elsewhere.

What drove the success this past holiday season ?

  • Free shipping with no restrictions had a significant positive impact on consumers satisfaction and their likelihood to purchase. When restrictions exist in those free shipping offers we see no positive impact on satisfaction or purchase. Those free shipping with restrictions offers might have a positive impact on average order size, but it is having no positive impact on improving satisfaction, improving retention and improving loyalty. 63% of online holiday shoppers surveyed in the ForeSee Results Holiday top 40 online retail satisfaction index recall seeing free shipping offers.
  • Customer product reviews had a significant impact on improving customer satisfaction, customer retention and customer loyalty. Customer product reviews was a powerful influencer of the purchase decisions for consumers that were first time buyers from the retailer.
  • Promotional emails were a very successful strategy for the top 40 online retailers. More visitors to the top 40 websites listed promotional emails rather than search engines and shopping comparison engines as the primary reason they visited the retailer’s site. The email driven consumers are more likely to purchase and more likely to be loyal than the search engine driven consumers.

What are the take aways:

  1. Offer free shipping, with no restrictions
  2. Offer customer reviews
  3. Continue to use promotional emails to drive traffic and sales

Check out out our research on the subject here.

  Comments

  1.            
          March 20th, 2007      |       1:22 pm      
       

    […] Ron (commenting on Larry’s post) identifies loyalty program as a key reason for the holiday season success of online channel of retailers. Apart from driving sales, loyalty programs generate valuable data which can be analyzed to determine tactical strategies like cross-promotional programs, estimating discounts on bundles etc. Here is a four step actionable process to exploit the loyalty card data, and use it to broadly target customers with effective offers, even those who are not members of the loyalty program. […]

         
  2.    
          Anshuman Acharya      
           
          March 20th, 2007      |       4:47 pm      
       

    Interesting…

    A question -

    The free shippign with o restrictions- was this idea tested on a smaller sample or smaller range of products before being launched.

    ‘Coz, it might have worked here but might have backfired in the case that the cost of shipping is more tahn the margin on the items sold.

    Was it?

         
  3.    
          Larry Freed      
           
          March 22nd, 2007      |       1:03 am      
       

    The free shipping analysis was done across the top 40 online retailers based on their various offers of free shipping that existed during the holiday season.

    Keep in mind, that the cost of carrying and selling a product in a brick and mortar environment is significantly greater then in an online environment. And in most cases will far exceed the cost of shipping.

    The one question about the free shipping research, was free shipping with restrictions did not increase satisfaction or loyalty, but did it increase average order size. This study did not focus on that aspect.

    -Larry

         
  4.    
          Anshuman      
           
          March 28th, 2007      |       1:00 pm      
       

    Ok.

    Regarding “did it increase average order size”, I guess you’ll need some loyalty data on the customer to realize how his current basket compares to his regular purchase.

    Just one caveat, given the holiday-effect, we would have to “deseasonalize” the data for a meaningful comparison.

    I work on testing promotions and products for CPG industry.

    This sounds like a good idea to test. But alas, it is for my clients to see the idea here :) .

January 14, 2007

The BCS Championship

Although I am a big College Football fan, I am not going to comment on Ohio State vs. Florida. Although it is time for a playoff system!

The real BCS is “Best in Customer Satisfaction”.

ForeSee Results recently published our Top 40, that is the “Holiday 2006 Top 40 Online Retail Satisfaction Index”.

Why is Satisfaction important?

First what is Satisfaction? The simple definition is a combination of what you get and what you expect. Expectations play a major role in determining how satisfied we are with an experience. If we to a fast food restaurant our expectations our different than when we go to a 5 star restaurant. The meal may be better at the 5 star restaurants, but we may have been more satisfied with the fast food restaurant; because it did a better job of meeting and exceeding our expectations. Now that is a simple definition, but satisfaction is also a very complex structure. It is all things about the experience including the merchandise, the price, the ease of purchasing and more.

So why do we care? Isn’t it just about if they purchased? The answer to that is no! In very simple terms, where consumers have freedom of choice, they are going to do business where their needs are being met and their expectations are being met or exceeded. In other words, consumers are going to do business where they are satisfied. When we think of a multi-channel retailer, sales alone do not tell the whole story of how successful our website is. How many times do you research a product online and purchase it offline? I know I do it quite often. Also think about the typical sales cycle. I recently purchased a new HDTV. I researched online and offline before making the purchase. And I finally purchased it about 30 days after I started the process. But the experience I had on those websites at the beginning of my purchase evaluation greatly influenced where I purchased from. So a great experience today (where I am satisfied – my needs met and my expectations exceeded) can lead to a purchase in the future.

The reality is that the best performance metric, the best measurement of the success of the website in contributing to the future value of our organization is the level of satisfaction.

Who did we measure?

We chose the top 40 online retailers in online revenue as determined by Internet Retailers Top 500 guide from last spring. We collected data using FGI Research’s SmartPanel. We focused on consumers visiting the websites. And we analyzed the data using the proven methodology of the American Customer Satisfaction Index (ACSI).

Who came out on top?

Netflix was number one for the second year in a row with a score of 86 (on a scale of 0 to 100), up 2.4% from last year. Amazon came in second with an impressive score of 84. They were followed closely by LLBean and QVC. The top traditional brick and mortar, multi-channel retailer was OldNavy with a score of 79, up 6.8% from last year. They also were near the top in terms of year over year improvement. The top 10 sites follow. Find the complete list here.

Retailer

Holiday 2006

Holiday 2005

Year-Over-Year Change

Netfix.com

86

84

2.4%

Amazon.com

84

82

2.4%

LLBean.com

80

80

0.0%

QVC.com

80

80

0.0%

Apple.com

79

76

3.9%

OldNavy.com

79

74

6.8%

Quixtar.com

79

76

3.9%

HPShopping.com

78

74

5.4%

Newegg.com

78

79

-1.3%

Barnes&Noble.com

77

77

0.0%

Dell.com

77

74

4.1%

Williams-Sonoma.com

77

77

0.0%

Who were the big gainers?

Somewhat surprising was the biggest year over year improvements were by traditional brick and mortar multi-channel retailers, Sears, JCPenney and OldNavy. Considering the fact that the top of the list is led by online only retailers, it is a great sign for consumers that the traditional brick and mortar retailers are making great strides forward in terms of providing a more satisfying online experience. The mutli-channel retailers have the advantage of offering more channel choice to consumers. It appears that many are ready to take advantage of that and compete strongly with their online only retailers.

Retailer

Holiday 2006

Holiday 2005

Year-Over-Year Change

Sears.com

73

68

7.4%

JCPenney.com

76

71

7.0%

OldNavy.com

79

74

6.8%

SonyStyle.com

73

69

5.8%

Target.com

74

70

5.7%

HPShopping.com

78

74

5.4%

What else did we see in the research?

More to come in upcoming posts, but here are a couple of the highlights.

  • User Reviews played a major role in influencing purchases.
  • Free shipping with restrictions has little impact on influencing satisfaction      and customer loyalty
  • 25% of the visitors reported that promotional emails were the primary reason for visiting the site. This is up from 20% a year ago. And nearly double the amount of people driven to the sites by search engines and shopping comparison sites.

Take Away Comment:Free your mind from only measuring success of your website by the dollars

December 31, 2006

New Year; New Blog

A new Year brings us a new blog.  Let me start by answering some questions.

Why?     Why not.

Why now?     A new year is a good time for a new blog.  According to the Chinese calendar, 2006 was the Year of the Dog, and 2007 is the Year of the Pig.    Time chose “You” as the person of the year for 2006.

2007 should be the year of the Customer.

Why “FREEDyourmind”?  It is time for us to free our mind from old ways of thinking about how we run our businesses.  We can move forward when we are not constrained.  We can innovate when we are not restricted.  We need to remember history, remember what we have learned, remember what we have seen, remember what we have observed and remember what we have counted.  What we measure influences what we do…how we allocate resources, how we prioritize our efforts, how we create future success.  Too often, our view is backward looking, at sales data, milestones accomplished, etc.  But to move forward, we must shift our thinking and free our mind to avoid re-creating the past.  We need to free our mind so we can move forward.

What will we talk about?  Whatever is on “our” mind.  But mostly, about the Customer and about the web.  About how the Customer should be the center of our thinking.  That the Customer is our biggest asset.  About loyalty — what it is, how we get it and how we keep it.  About satisfaction.  And about the web.

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