FREEDyourMind

ForeSee Turns Ten

We’ve been gearing up for our tenth anniversary this fall here at ForeSee, and I’ve been thinking a lot about the early days at ForeSee lately. The last ten years has been an amazing ride, and I can’t wait to see what’s in store for the next ten.

Ten years isn’t such a long time if you’re a bank or a newspaper or a manufacturer. But it’s a very long time for an analytics company.

We have not only survived a decade that has been very tough on American business (not to mention Michigan business!), we have thrived. We’ve done it because we make satisfying our own customers a priority and because I truly believe we provide a solution that is unmatched. We allow executives and managers to confidently prioritize investments that will have the greatest impact on future business. In other words, we help companies figure out where to spend their money and how to keep their customers.

There is no more powerful strategy, whether you’re in a challenging economy or a booming one.  And we can do it across channels and across customer touch points so that you can understand how what happens on one channel affects what happens on another, and how the customer experience across channels impacts the bottom line.

Ten years ago, I decided to take a chance and leave a great job at Compuware to help build a new company that was going to bring the methodology of the ACSI (American Customer Satisfaction Index) to the quickly growing world of websites and other online marketing initiatives. Our first beta client was the week after September 11th. What we thought would be our biggest competitor went out of business the week before we were incorporated. Over the last ten years the global economy has been the most volatile that we have seen since the Great Depression, and we are headquartered in Michigan, one of the states that has been hardest hit by the series of economic downturns over the last decade.

But working with the team here at ForeSee to build a company from the ground up has been one of the most rewarding experiences of my life. With a great team of people, we built a business that helps other businesses. We quickly expanded our capabilities from measuring online customer satisfaction to measuring the complete customer experience across all channels and touch points. We’ve grown in revenue, market share, and staff every year since we started. We’ve built something we’re really proud of; something that we think can make a difference to businesses in good economies and in bad.

The thousands of clients we’ve worked with over the years have been a big part of why this job is so rewarding for me. I’ve gotten to meet so many of our clients over the years at various tradeshows, industry events, and our own summit here in Ann Arbor (this September—register here). I have learned a LOT from our clients about what to do, what not to do, how to improve our own offerings to meet their needs, and more.

As a result of our expanded capabilities and just in time for our tenth anniversary, we decided to update the way we talk about what we do, shorten our name, and freshen up the logo. We’re not changing what we do, just the way we talk about it, and we’ll be putting out a press release Friday about our new name and logo. The name change was a pretty obvious choice, since 99% of our clients, analysts, journalists, and employees already call us ForeSee. So that was an easy decision to make. Starting tomorrow, you’ll see us start referring to ourselves as ForeSee. You'll be able to reach us at www.foreseeresults.com or www.foresee.com.

Our new logo is really just an updated, modern version that we think reflects who we are today: a customer experience analytics firm that helps clients continuously measure satisfaction and confidently prioritize the efforts that will have the greatest business impact. We also wanted a logo that would still be recognizable and familiar to the millions of people who take our surveys every year. We have survey response rates much higher than industry averages and we want to keep it that way. Clients of ours will be getting communications on how and when to change the logos on their surveys, but we designed it and are rolling it out in a way that will have no impact on response rates.

 
The logo and the name change are in effect tomorrow. But over the next six months, our clients will start to see slight changes in the way we talk about our solutions and the way they work together. We’re going to be working on our website. We’re going to be offering new solutions that allow our clients to take advantage of the unique combination that only we offer:  continuous measurement, trusted technology, proven methodology, and world-class analysis. You won’t find that combination anywhere else.

Oh, and I just finished my first book. It’s about how to manage the future using analytics rather than measuring the past using metrics. It will be released in late September/early October, but we’re going to give a copy to everyone attending the ForeSee summit in Ann Arbor this fall. Hopefully some people other than just my Mom will buy a copy from Amazon.

We had a great party at the University of Michigan football stadium last week and are planning a few more celebrations this fall. We're putting some pictures up on our Facebook page today. We thought about a press release saying “ForeSee Celebrates Tenth Anniversary in the Big House” but realized that people who are not fans of Michigan football might think we meant another kind of big house!

Thanks to all ForeSee employees and all ForeSee clients for an amazing ten years. We couldn’t do it without you. Here’s to the next ten!

 

ForeSee Timeline, First Ten Years, 2001-2011 

2001

• March 2001: I was tapped to build a new company designed to bring scientific customer satisfaction measurement to web-based marketing initiatives
• September 2001: ForeSee Results, Inc. officially incorporates after being jointly founded by CFI Group and Compuware
• September 2001: ForeSee’s first beta client launches one week after September 11th

 

2002

• January 2002: ForeSee signs first paying customer

 

2003

• December 2003: ForeSee surpasses 1 million completed surveys

 

2004

• May 2004: First ForeSee Public Sector Summit in Washington DC

 

2005

• ForeSee surpasses 100 customers

 

2006

• August 2006: ForeSee surpasses 10 million completed surveys

2007

• September 2007:  First ForeSee User Summit in Ann Arbor
• September 2007: ForeSee acquires usability firm Red Spade

 

2008

• January 2008: ForeSee hires 100th employee

 

2009

• June 2009: ForeSee acquires Session Replay technology from Nitobi 
• November 2009: ForeSee announces expanded offerings to apply technology to measure satisfaction of call centers and store locations

 

2010

• ForeSee expands offerings to apply technology to measure mobile optimized websites and mobile apps
• July 2010: ForeSee surpasses 50 million collected surveys

 

2011

• ForeSee surpasses 500 customers
• January 2011: ForeSee hires 200th employee
• August 2011: ForeSee celebrates its tenth anniversary at the University of Michigan football stadium
• August 2011: ForeSee updates logo and shortens name

Recommendations for the .Gov Task Force

This spring, President Obama signed Executive Order 13571, “Streamlining Service Delivery and Improving Customer Service,”  which requires federal agencies to strengthen customer service, specifically the manner in which they deliver services and information via the web.

As part of the president's Campaign to Cut Waste, the effort is designed to eliminate or consolidate redundant websites and improve websites that are outdated, difficult to use, or poorly maintained. The desired outcome? Taxpayer money will be saved AND citizens will have an easier access to the content they need.

The .gov Task Force, which was formed in July 2011, now has the difficult task of paring down at least 25% of the more than 24,000 federal government websites in existence today. While the task force is planning to seek qualitative feedback from the public on which sites to cut, it has yet to establish criteria on which it will base its final decision. It is important for the task force to base its decision on the right mix of quantified data (both behavioral and attitudinal) in order to make uniform decisions across the board.

As the government begins the arduous and important decisions of deciding which websites are eliminated and which are consolidated, three critical components must be in play:

• The volume of traffic on the website and other critical behavioral metrics
• Information redundancy
• The website's value to the citizens who regularly use it.

Web traffic alone isn’t enough to justify to cutting a website because that site may contain valuable, highly targeted content that isn’t available anywhere else. Considering whether the site duplicates content is another important consideration, but determining overlaps will be long and arduous with 24,000 sites, or even just with the roughly 1700 federal domains. Therefore, an assessment of the quality and value of the specific sites to citizens is a critical component to determining whether a site is necessary.

Right now, more than 230 federal websites work with us to measure, monitor, and improve citizen satisfaction, and the ACSI methodology that we use to power our technology has been the standard metric for e-gov sites since 2003. We've collected more than 7 million surveys from visitors to federal websites since 2001, including more than 4 million since President Obama’s 2009 inauguration. There is data available on many sites that could guide these kinds of decisions, and certainly any or all of the 1700 .gov domains or the 24,000 federal websites in existence today could be measuring the citizen experience as one mark of success.

We released the second quarter ACSI E-Government Satisfaction and Transparency Index yesterday, with satisfaction scores for more than 100 federal websites and transparency scores for more than 30 websites. You can get it on our website for free and see that there is a compelling case to be made that not only can federal websites be an efficient, cost-effective means of the government meeting its citizenry's needs, but that the means to evaluate, consolidate and improve them are already available. We're also hosting a free webinar to look into the ACSI E-Gov Index Q2 results in more depth... we'd love to have you join us and ask any questions that you may have.

In the meantime, are there other criteria you think the .gov task force should be using to consolidate and pare down websites? Leave your thoughts in the comments.

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.

Relay For Life

 
This past weekend ForeSee Results participated in the American Cancer Society’s Relay for Life in Ann Arbor.  As a company we raised over $11,000 contributing to the event that raised over $135,000.  It was a great effort in helping to support the fight against cancer.

I want to thank everyone that participated by coming to the relay, donating money or encouraging others to donate money. 

Thanks!

-Larry

 
  

  

  

  


  
 
 



 

Supporting the American Cancer Society's Relay for Life

This coming weekend our company, ForeSee Results, is participating in the American Cancer Society's Relay for Life.  As a company and as an individual we want to do our best to make a difference in the fight against cancer.

Unfortunately too many of us have been touched by cancer and we all need to do what we can to help the fight. Both in memory of those whose lives have been cut short by cancer, including my father, and in support of those who continue to fight cancer, we are doing what we can to help the fight and hope you can join us in that fight.

My family has participated in previous years in the Relay for Life in West Bloomfield, but this year we decided to make it a company effort and we are participating in Ann Arbor. 

I hope you can find a way to help in this fight, either by participating or donating to our efforts.

You can visit our site to donate here.  http://main.acsevents.org/goto/larryfreed 

Thanks,

Larry

New Data: Groupon & Living Social Bring New Customers (and Existing Ones)

Earlier this month, the New York Times reported that as Groupon prepares to go public, the success of its business model is in some question. I took a look at some data from our Top 100 study this year (data gathered in February/March timeframe), and I don’t think anyone should be signing any death certificates yet.

Our annual top 100 research (a study of customer satisfaction with the top 100 American e-retailers, as defined by Internet Retailer's Top 500 Guide) gives us the opportunity to ask more than 22,000 online shoppers about a variety of topics. This spring, one subject we wanted to explore was the daily deal phenomenon, and this latest news about Groupon made me dig out the data and look a little closer at the findings (thanks also to research manager Rhonda Berg for her great help with this). What we found is that Groupon and Living Social do bring in new customers, and that should be welcome news to both retailers and daily deal companies alike.

Let me give you some background data for context.

About two-thirds of Top 100 site visitors are enrolled in at least one Daily Deal email program. (that's 14,000 + of the more than 22,000 respondents we surveyed who visited the top 100 retail websites, or 65%). Groupon is the most popular site among those who subscribe to daily deals; it has about twice the number of subscribers as its closest competitor, Living Social, and more than twice the number of purchasers. Although the New York Times reports that competitors are catching up, Groupon is solidly in the lead for now (and we’ll see how those numbers look when we do the study again in 6 months).

 

Of those who subscribe to daily deals, nearly half (46%) subscribe to more than one service, a number that should continue to rise. In other words, just because some competitors are gaining traction doesn’t necessarily mean that Groupon will be losing it. This may be a situation where there is enough pie for everyone (of course, that is pie sold at half price!).

 

Not only are shoppers subscribing to these daily deals, they are using them, which is good news for consumers, retailers, and the sustainability of the daily deal business model in general. Nearly two-thirds of subscribers to daily deals have purchased at least one deal in the past 90 days, regardless of what site they're subscribed to, and most of those buyers (89%) have redeemed their purchase during that time.  I was surprised by the strength of these numbers and the daily deal companies (and their investors) should be thrilled with the results.

 

Now we get to the part that I think is the most interesting and has the most relevance to recent discussions about the future of the daily deal business model and the individual companies involved. Are Groupon and Living Social actually helping companies to acquire new business or are they just letting existing customers get better deals when they might have been willing to buy at full price? The million dollar question... (or thousand dollar question, or multimillion dollar question, depending on your business size...).  And of course there is both good news and bad news here.

Good News/Bad News: Daily deals do bring in new business but also give deals to frequent customers. Of the people buying daily deals, 38% were already frequent customers of the company.  In other words, existing customers, loyal customers, are getting significant discounts to buy what they might have bought anyway.  The added value is minimal, it erodes margins and potentially conditions the loyal customers to become discount seekers.

On the positive side, 31%, are brand new business (new customers who weren’t aware of the company before the deal plus those with some brand awareness), 27% were infrequent customers, and 4% were former customers. That's at least 35% and arguably 62% of deal buyers that represent NEW business.  This is compelling data, and these are the customers that provide what the daily deal model is supposed to provide: bringing you new customers to try your business or products out.  Now it's up to you to do a great job in meeting their needs and satisfying these new customers.  And not only satisfy them but satisfy them to the level that will allow you to convert a percentage of customers to long term, loyal customers.  More to come on that in future research.

 

If you’re interested, here’s a bit of demographic data that shows who these daily deal companies are targeting. The charts below reflect the demographics of subscribers.

 

 

Daily Deals are also attracting men and women differently; among the three major players, Google Offers garners more male participation than either Groupon or Living Social.

 

Ok, your turn. We’ve read a lot about the challenges of this business model and, specifically, the challenges that Groupon may be facing. As a retailer, does this give you more confidence in using a service like Groupon or Living Social? Or if you have, do you have any experience to share? As an investor, does this increase your confidence in the potential of this business model? I’d love to hear your thoughts in the comments.

Huffington Post Passes New York Times

Very interesting stat in article http://read.bi/mOoRWH in Business Insider about Huffington Post passing by New York Times in monthly unique visitors according to comScore.  There is little doubt that the AOL acquisition of Huffington Post has paid off some good early dividends in growth for Huffington Post.  When we see so many mergers not add value it is encouraging to see this one have some initial signs of success.  With AOL incorporating Huffington Posts on to their site it is helping build the traffice to Huffington Post. 

It is way to early to determine if the acquisition will end up being a good one, but increasing traffic at the rate they are is a good start.

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.

Top 100: Mobile

Today's follow up topic from our recent Top 100 Online Retail Satisfaction Index is about mobile commerce.

Like social, mobile is turning out to be a touchpoint with enormous potential. When customers rate their satisfaction with various touchpoints, their satisfaction with mobile is relatively low, compared to other touchpoints, though it is on par with website satisfaction. I don't think this will be true for long.

 
 

Satisfaction can be defined as how what you get compares to what you expected to get. Average consumers may not understand that mobile websites and mobile apps are different than regular websites. More and more, they're going to expect the same functionality and the same navigability. And very few retailers are delivering fantastic mobile experiences just yet (a few are), but it's just too new.

There are three ways to manage the customer expectations that will certainly be increading over the next year: 1) make improvements to mobile sites and apps 2) adjust customer expectations 3) a combination of both #1 and #2. 

Let's take a look at how many online shoppers are using their phone to get to a retailer, whether it be a regular website viewed on their mobile phone, a mobile optimized website, or an app. Not many--only 15% say they have. I think we're going to see a huge change in this next year.

 

Most people are  going to look up price or product information in one way or another, though 17% are actually planning to purchase using a mobile phone. I thought that was high, and we will see that number only continue to grow. Every retailer is going to be a little different--understanding what your customers are coming for can really help you design your mobile offerings with the customer in mind.

 

Everyone in our industry is talking about mobile. For many years we have talked about the "year of mobile", it appears that this may truly be the year of mobile. 

We'll be doing this research again in about 6 months. Are there other topics you'd like to see us explore?

Top 100 Match-Ups: Amazon vs. Netflix vs. Blockbuster

One of the stories the media has been most interested this time around is Netflix: why did their satisfaction drop year-over-year, how do they compare to Amazon (which has made a strong competitive bid against Netflix in the last year in particular) and how do they compare to Blockbuster.

Let's take a closer look at the satisfaction scores. Keep in mind that Amazon's satisfaction score is an overall satisfaction score, not just for streaming content. So it's not a direct comparison in some ways, but does give us a general indication. 

	Amazon	Netflix	Blockbuster
Online Customer Satisfaction, Spring 2011	86	84	78

Our model shows the way various elements of a user experience impact satisfaction: for this study, we specifically measure price, functionality, merchandise, and content. The reason Netflix dropped from 87 to 85 in overall satisfaction is because itdropped 2-3 points in every single one of those four elements. The reason Netflix trails Amazon in terms of customer satisfaction is because it trails in each of the elements (again, we are comparing Netflix video services with all of Amazon, so not direct apples-to-apples).

Elements of Website Satisfaction	Amazon	Netflix	Blockbuster
Content	87	87	82
Functionality	86	86	81
Merchandise	89	84	80
Price	86	86	76

Netflix used to compete on technology and functionality—they got movies to you fast, they were cutting edge with their ability to provide streaming video on multiple devices. Now everyone does that and the field is littered with competitors—Amazon, iTunes, Hulu, uVerse, HBOtogo, XFinity, etc are all starting to all on-demand across multiple devices. As more and more competitors enter the field, the things that used to give Netflix the edge are now just expected.

Satisfaction is defined as how what you actually get compares to what you expected to get.The higher customer expectations are, the harder it is to keep satisfaction stable. In order to keep satisfaction stable or even see an increase, Netflix will have to compete more and more on price and merchandise (content/programming).

Netflix actually has kept satisfaction remarkably stable over the years despite huge changes in their business model—to do that without having customer satisfaction or financials take a huge hit is like trying to redesign a jet plane in midair without crashing. But competition is fierce and barriers to entry are lower than ever.

However, the rewards are great. Higher satisfaction leads to future behaviors that have a direct impact on the bottom line. Again, Amazon edges out Netflix in many of these likely future behaviors, but not by much, and not specifically for video streaming and rentals.

Likely Future Behaviors Resulting from Website Satisfaction	Amazon	Netflix	Blockbuster
Brand Commitment	84	83	74
Likelihood to Purchase Next Time	88	85	75
Likelihood to Purchase Online	92	83	72
Likelihood to Recommend	89	87	77
Likelihood to Return to the Website	92	90	78

Netflix remains a strong competitor. It would be interesting to see how these numbers all stack up if we could compare Netflix specifically to Amazon's digital services rather than to overall retail services. I suspect that right now, Netflix would still have the edge... for now.

Meanwhile, Blockbuster's satisfaction score of 78 would be fine and even stellar . . . if they were an insurance company. When the most direct competitor beats them by a full 6 points on satisfaction, it's hard to imagine they can continue to compete for long without major changes to the online customer experience, especially since more and more of their retail stores are closing, and that was the one major competitive advantage they have.