FREEDyourMind

It's True: Satisfaction with Online Financial Services is Up

Incredibly, customer satisfaction with online banking is up. Customer satisfaction with online investment services is up. Customer satisfaction with online credit cards is up.

What's going on?

Every year, we partner with Forbes.com to do a survey of people who visit online financial services websites. This year, despite the economy and the near-daily bad news, customers are more satisfied than ever with the three online industries we surveyed.

On our study's 100-point scale, satisfaction with online banking is up to 83, making it one of the very few service industries to pass the threshold of 80, generally considered an excellent score. Online credit cards is also up, to a score of 80 and even online investing (which was hammered in the February ACSI report) is up to 78 as the markets have started to settle.

I wish I could tell you there was some magic bullet or miracle app that has saved the day, but the truth is, it's basic blocking and tackling. Each of the three industries improved in basic online elements that directly impacted satisfaction. This should be good news for banks, credit card companies and investment firms. You don't need to reinvent the wheel during an economic crisis.

Even better news: your website can have a huge impact on overall operations and could be a huge corporate advantage when times are tough. Highly satisfied online customers are significantly more likely than less satisfied customers to purchase more services, open more accounts, use the website as a primary channel, and recommend both the company and the website. Therefore, improving the online experience leads to increased revenue (because customers purchase additional services and recommend their friends and colleagues to do the same), as well as cost savings (because these customers use the website as their first source for information and transactions rather than more costly alternative channels).

Read the whole report for more details on the findings.

A lot of interesting things came out of the study though. First of all, only 1/5 of online bankers remembers seeing communication about their bank's financial stability on the website. That either means it wasn't there or that they didn't see it. Either way, it is absolutely essential that banks, given what we know about the ability of the web to build loyalty, use their websites to reassure and inform customers and prospective customers.

Second of all, only 13% of online bankers with mobile phones use them to access their bank's website, and only 3% of online bankers overall use mobile apps. Those that do tend to be more satisfied.

So what do you think--are you surprised that online satisfaction increased for an industry in so much turmoil?

Shopper Satisfaction Holding Steady During the Holidays

We released our second weekly holiday benchmark this morning.

Here's the bad news: satisfaction is still down year over year. But there is a real silver lining, and that is that satisfaction is maintaining from Cyber Monday--it has not fallen off in the week after one of the biggest online shopping days of the year. In fact, purchase intent is higher this week than it was at any point during November. If you're looking for good news in a bleak landscape, this is it!

I think all of us watched the good results from Cyber Monday and wondered if that was it. Did people do all their shopping the weekend after Thanksgiving to take advantage of deals? Would we see shopping fall off the rest of December?

I think we have all adjusted expectations--we are not going to see 15%-20% year-over-year increases like we have in years past. But everything I'm seeing tells me it also won't be as bad as some predicted at the beginning of the season.

But perhaps the bigger story than what will happen to e-retail overall is what will happen to individual retailers. Our benchmark covers more than 80 retailers, and we've collected more than 330,000 e-retail surveys over the last 5 weeks (more than 70,000 just in the week after Cyber Monday). When we're looking at that many shoppers of that many online retailers, there is going to be a huge range of satisfaction--some retailers as high as 90 (on our 100-point scale) and some are, well, a LOT lower than that.

I've said it before and I'll say it again: an economic crisis can be a huge opportunity for e-retailers to solidify loyalty and to really differentiate themselves in terms of customer satisfaction. Really, for anyone in any industry to do so. Satisfied customers are the last to leave, no matter how tight their personal finances get.

Trends in Online Shopping: 2008

We are preparing to do our annual Top 40 Online Retail Satisfaction Index. Here's the way it works in broad strokes: we use the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI) to assess browser satisfaction with the top 40 retail websites (as determined by Internet Retailer's annual Top 500 Guide) during the holiday shopping season. Each of the 40 retailers is given a score on the ACSI's 100-point scale so you can see which retailers are doing a better or worse job satisfying web browsers during the holiday shopping season. We also do a similar study in the UK with the top 30 UK e-retailers. Since customer satisfaction has a proven link to future financial performance, loyalty, and even stock prices, it turns up some interesting stuff.

But beyond just the horse race of who's doing well and who isn't, it's an opportunity to look at broader trends in holiday e-retailing. We've looked at the impact of free shipping offers on likelihood to purchase and the impact of customer reviews on loyalty. We've evaluated how gas prices are affecting people's likelihood to shop online vs. offline. It's almost 10,000 surveys that can give us insights into the mind of the online shopper.

We're finalizing the survey now and we'll definitely be adding questions about the impact of the economy, the election, and the financial crisis. We're also looking at asking about usage of mobile apps and the impact of social networks on shopping decisions. We've talked to a few journalists and opinion leaders about what they're interested in, but what's on YOUR mind as we approach the busiest time of the year for online retailing? What would you most like to know about online shopper behaviors and attitudes?

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.

Netflix Retains Top E-Retailer Title

We've been measuring satisfaction with the top e-retailers for four years now (as defined by Internet Retailer's top 500 Guide). We did the top 40 for two years, and due to popular demand, we increased that to the Top 100 last year.

So, just in case we weren't busy enough hosting our annual user conference this week, we thought it would be fun to also release the Top 100 today (actually, it was timed to be in conjunction with the release of Internet Retailer's Top 500).

Satisfaction with e-retail overall is up 1.4% to 75 (we used the ACSI methodology and its 100-point scale to do the research, as always). 45 of the 100 sites have higher scores this year (many with huge year-over-year increases) and 17 had lower scores.

Other interesting findings:

• Netflix (86), QVC.com (84), and Amazon (83) hold the top three spots for the fourth year in a row. Netflix has been #1 for four years in a row, and QVC and Amazon have traded back and forth between the #2 and #3 spots. But the consistency of these top sites is amazing-they are setting the standards and expectations for sites across industries.

• Online satisfaction (as measured by ACSI) drives loyalty and sales: highly satisfied online shoppers are 69% more likely to purchase from the retailer next time they're in the market for similar merchandise, 75% more likely to purchase online, 42% more likely purchase offline, and 75% more likely to recommend the retailer. How's that for proof to management that customer satisfaction is a key indicator of online success?

Download the report (for free!) to see who comes out on top in individual head-to-head matchups: Apple vs. HP vs. Gateway; Best Buy vs. Circuit City; Home Depot vs, Lowe's; Nordstrom vs. Neiman Marcus vs. Saks; LLBean vs. Coldwater Creek vs. JCrew; Drugstore.com vs. CVS vs. Walgreens; Netflix vs. Blockbuster; etc. There are 100 of them rated, after all. Almost all of the major e-retailer categories are represented. So check it out if your company is on the list or if you want to benchmark against these top-selling e-retailers. You can also read about it in Computerworld, ClickZ, and Network World, among other places. We have free reports available on the Top 100 overall, along with special reports on apparel/accessories e-retailers and computers/electronics e-retailers.

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.

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.

Quarterly ACSI E-Gov Index

Four times a year, we work with the University of Michigan on the American Customer Satisfaction Index’s (ACSI) E-Gov Satisfaction Index, a rating of more than 90 federal government websites in terms of how well they are satisfying citizens via the web channel. You can download the full report with scores for individual government websites here or read news coverage of it in Gov Exec, ComputerWorld, or Destination CRM.

For this quarter’s report, my colleague Errol Hau and I actually surveyed the top performing sites (sites that scored over 80 on the ACSI’s 100-point scale, generally considered to be the threshold for excellence) to see what these sites had in common. Why were they able to do so well? Our informal survey shows that sites that achieve top-performer status of 80 or above have several things in common:

• Total commitment to meeting the public’s diverse needs: Many government sites serve diverse publics, which can be challenging. Sites with high citizen satisfaction have learned how to use customer satisfaction analytics to first identify who is visiting their site then customize the online content to serve the needs of their multiple stakeholders. The high scores for content obtained by top-performing sites are proof of their success in this area.

• Recognition by management of the web’s strategic value: Many top-performing sites report having top-down support by management, with recognition by the agency or department director of the strategic value of the online channel. While many high-scoring sites face the familiar challenges of limited budget, staff and time, the fact that they’re supported fully by management enables them to better meet citizens’ needs

• Use of “Voice of citizen” data as an improvement tool: Sites that do a great job from the perspective of their users view citizen satisfaction as more than just a metric. They use data gathered via the reliable and scientific methodology of the ACSI to make both small and large-scale improvements to their sites to keep ahead of citizens’ continually evolving needs. While still challenged by search and navigation like government sites as a whole, top-performing sites outperform the e-government average in these key satisfaction drivers.

• Focus on the mission of citizen service: Sites that excel at meeting the needs of the public consider efficient and effective citizen service to be their mission. Because they put citizens’ needs at the core of all they do, these top-performing sites score well above average in all of the elements measured by the ACSI methodology. . . . .

No matter what a federal website’s score or ultimate mission, it is clear that these four factors are the cornerstone of building a truly superior e-gov website.

Did You Know?

Visitors to retail sites are 10% more likely to purchase from the retailer’s website if the site has customer generated product reviews. What would increasing purchase intent by 10% do to your bottom line?

A new study released by ForeSee Results finds that the availability of online customer reviews on a retail website boosts overall satisfaction with the website, loyalty, and likelihood to buy online.

In a closer look into research done with the top 100 grossing retail websites, we found that websites that offered customer reviews enjoyed better loyalty and conversion rates.

• Customer reviews significantly improve the online shopping experience: Satisfaction is 11% higher for people who said they had seen customer reviews on the site than for those who said that reviews weren’t on the site they visited.
• Customer reviews increase conversion and loyalty: Shoppers on sites with reviews are 10% more likely to purchase from the retailer’s website than those on sites without reviews. This group is 7% more likely to purchase from the retailer for their next purchase of similar merchandise, which is a strong loyalty metric.
• Customer reviews support acquisition: Customer reviews are a form of recommendation (whether they’re positive or negative) and recommendation is a powerful influence in online retailing. Online shoppers that remembered seeing customer reviews are 13% more likely to recommend the site than are shoppers who didn’t see reviews.

Are You Satisfied With E-Gov?

When was the last time you were in pursuit of information from government? When was the last time you had to fill out a government form? The internet has played a major role in making that process easier. It is hard to remember a time that e-gov wasn’t available to us to check on the status of a tax refund, or find out how to renew your passport, and the list goes on. But the last time you visited a .gov site, was it a good experience? Was it all it could be? Are you going to return to the site in the future? What could that .gov site done better?

Those are the burning questions on the minds of those responsible for the e-gov efforts. The most recent report on Federal Government Website Customer Satisfaction was recently released by The University of Michigan’s National Quality Research Center and sponsored by ForeSee Results.

Citizen satisfaction with federal websites registered a slight improvement, according to the second quarter report from the University of Michigan’s American Customer Satisfaction Index (ACSI) E-Government Satisfaction Index. The e-commerce and transactions category showed the greatest increase of any other category, inching the E-Government Satisfaction Index forward 0.4% to 73.7 on a 100-point scale and reversing last quarter’s drop.

Although aggregate satisfaction with federal websites improved incrementally, it still lags the private sector, which continues to set the bar for online satisfaction. E-government scored 8.5% and 3.8% behind private sector e-commerce (80) and e-business industries (76.5), respectively.

Private sector e-commerce is one of the strongest performing sectors measured by the ACSI and still holds the edge over e-government transactional and e-commerce sites. But as more federal websites allow citizens to do business online with government, satisfaction is improving. On aggregate, the customer satisfaction score for sites that offer transactional or e-commerce capabilities rose 3.5% from last quarter to 76.8.

Three of the strongest performing e-commerce and transactional sites belong to the Social Security Administration (SSA). Internet Social Security Benefits Application site (88), Help with Medicare Prescription Drug Plan Costs site (87), and Social Security Business Services Online (83), provide superior satisfaction by even private sector standards.