FREEDyourMind

Impact of Financial Crisis on Corporate Websites

The turmoil in the financial markets has resulted in the highest volume of traffic for brokerage websites in three years.

Heather Hopkins of Hitwise adds that US internet visits to Stocks and Shares websites have increased 85% since August.

Wow.

So what are these companies doing, if anything, online to address the questions their customers may have?

Bear Stearns' home page seems to be in some denial about the magnitude of what has happened to the company in the last couple of weeks. They do not make it easy for panicky customers to get their questions answered.  Most of their individual pages link to JP Morgan Chase.

Looking at the JP Morgan Chase website, you wouldn't have any clue there even was a financial crisis in this country! Business as usual over there.

Washington Mutual customers are directed to a fairly straightfoward explanation of what will be different now thay they're with Chase that seems to emphasize stability, lack of change and increased access to resources. Nice job by Chase on this one, especially given all they're dealing with.

What To Do Now?

I wonder what that VP of E-Commerce is thinking about....

• "The government is trying to bailout the financial services industry.
• Warren Buffett is trying to bailout Goldman Sachs.
• Is anyone going to bail me out?"

The answer is probably a big fat NO. If you are responsible for your company's website, what should you be doing in this tough economy?

1. Be aggressive...and smart.  In tough times the weak go away and the strong gain market share.  Look at these tough times as an opportunity. 
2. Focus on what matters most...your customers.  Satisfied customers will be more loyal, buy more and recommend you to others.  And most important of all, the most satisfied customers, when faced with tough budget choices will stay with you.
3. Measure what matters most...because you cannot manage what you cannot measure.
4. Accuracy, precision, reliability and validity of your measurements is critical to success.  Garbage in...garbage out, bad data will mislead you -- you are better off with no data then data that is not accurate, precise, reliable and valid.
5. Resist the urge to be penny wise and pound foolish.  While it is tough to do, try to keep a long term view of the challenge, not only focused on tomorrow's results.  Also, when making investments in technology, services, etc., remember that quality and value outshine cost every time.  

More to come...

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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.

Web Analytics in a Recession?

I'm just catching up on all the blog entries I wanted to write and never got to over the holiday weekend.

I liked the guest post over on Eric Peterson's blog by Corry Prohens of IQ Workforce. IQ Workforce is an online marketing and analytics recruitment firm that does a few surveys a year. Corry's latest survey, which he wrote about on Eric's blog, is a survey of web analytics professionals on how they think the recession will impact their job:

• 74% of practitioners expect that spending on web analytics will increase at their company during the recession (40% said it would increase a bit / 34% said it would increase significantly)
• 60% of practitioners said that the recession would either increase the likelihood of hiring additional web analytics resources or have no impact
• 17% said that their company was either somewhat or very likely to reduce web analytics headcount during the recession
• 2% thought that the recession would have a major negative impact on their career

These findings are in line with my instinct  (and experience, based on how business is going for us right now) that web analytics will be more important than ever in a down economy. When things are going well, a lot of companies can be successful. When consumers start to tighten their belts, companies will have to compete harder to earn their business, and that is where the web analytics come in.

The Impact of Gas Prices on Online Shopping

One of the things we asked as part of our Top 100 Online Retail Satisfaction Index was whether people planned to spend more or less online or offline next year, and why.

34% of our survey respondents planned to spend more online. When we asked what were the major factors influencing their online spending projections, 26% said personal finances, 16% said gas prices, 16% said online prices (probably better than offline prices), 14% said economic outlook. So gas prices were not the major influencer in projected online spend, but they were up there.

However, the data supports the idea that the weakening economy will benefit e-business in general, since nearly 34% plan to spend more online this year, and only 16% plan to spend more offline. Only 13% of respondents plan to spend less this year online, while 26% plan to spend less offline. Overall, this probably means the online channel holds considerably greater opportunity to capture sales in a tight economy.

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.