FREEDyourMind

Satisfaction with E-Gov is Down

Every quarter, we help the University of Michigan with the American Customer Satisfaction Index (ACSI) E-Government Satisfaction Index. We measure more than 100 federal government websites to see a) overall, are citizens satisfied with online government initiatives and b) how satisfied are they with individual sites?

The answer this quarter isn’t great: satisfaction is down for the third quarter in a row, and now it’s at its lowest score in more than three years. You can get the report, with ACSI scores and analysis for 100+ federal websites here.

One of the reasons I think the scores are dipping is the lame duck effect. President Bush, love him or hate him, has spent administration time and energy on e-gov, through making it one of the five goals of the President’s Management Agenda and through other means. But there’s no certainty about what a new administration may mean for e-gov initiatives, and I think that may make them hesitant to make the changes they need to make to keep satisfaction up. Steve Barr, federal columnist for the Washington Post, told a colleague that he usually doesn’t see the lame duck effect until summer, but he could see that might be part of it. He also mentioned that a lot of agencies got their budgets late, and that could be part of the problem as well.

A scan of the presidential candidates’ websites shows that only Barack Obama has anything significant about e-gov as part of their campaign platform, and his point is more about using e-gov for transparency than for citizens' convenience and ease or for cost-saving measures. After a very quick look, I don’t see anything on either Clinton’s or McCain’s website specifically about e-gov. (Though, you can compare your NCAA picks with John McCain, a crucial feature neither of the other candidates offers!). So who knows what the future holds for e-gov. It seems clear that it will have to be a priority of any administration both because it can save the federal government so much money and because it should be the mission of any administration to be citizen-centric, which is what the web is all about. But 2/3 of the candidates don't seem to be thinking much about it yet.

Hopefully I’ll be posting more often in the coming weeks. We’re coming down off a crazy period that has had me running dawn ‘til dusk.

ACSI E-Commerce Results

It’s that time of year again: time for the University of Michigan's American Customer Satisfaction Index (ACSI) report on e-commerce. The e-commerce report includes the e-retail, online travel, and online brokerage industries.

You can download the full report here, but a few things I found most interesting:

• Amazon has the second highest score in the entire ACSI (which includes 200+ companies), behind only Heinz. That is a stunning achievement for a retailer with such a broad mission.
• Online travel aggregators like Expedia, Travelocity, and Orbitz continue to slip and are having significant trouble differentiating themselves from each other.
• Online brokerage does better than expected, given the slowing economy (which usually results in lower satisfaction with any kind of investing). Customer satisfaction with Fidelity.com rises 5%, while Charles Schwab.com and TDAmeritrade.com also report increased satisfaction.
• Of all the sectors measured by the ACSI this quarter, e-commerce was the only one to increase. All other sectors saw customer satisfaction scores fall, and the overall ACSI score for the whole economy fell this quarter. I attribute this to the fact that competition is so fierce in the online world that companies HAVE to excel in order to survive. The best competitive differentiator is customer satisfaction. Still, it’s remarkable that the e-commerce sector now outperforms all other service sectors measured by the ACSI, online and offline.

You can read more in the Detroit Free Press and Network World.

 

Online Marketing Complaints

These are the complaints I hear most often from people in charge of online marketing:

 1. Reams of customer data—NO idea what to do with it – Computers and the Internet make it easy to collect all kinds of customer behavioral data, but the result is often piles of numbers and yardsticks without any insight into what they mean or how to move the needle.

2. The measures show what the customer is doing, but not why he’s doing it – Many measurement systems reveal nothing about the driving factor behind behaviors. Following site visitor paths throughout a web session will show where a customer has been and what they bought, but it provides no information about the customer's website experience, satisfaction, or loyalty. Did they visit 15 pages because they were incredibly engaged or because they couldn’t find what they were looking for? Tracking sales data is absolutely essential, but it doesn't grant insight into what they didn't buy, why they didn’t buy it, or what it will take to get them to buy it next time.

 3. If there are satisfaction metrics in place, they are not consistent and scientific– Medical diagnostic tools stand up to the rigors of science and academia. The health of a business deserves the same scrutiny. A scientific approach helps create consistency and predictability as managers determine the cause-and-effect relationship between customer satisfaction and future behaviors. A consistent metric allows for benchmarking over time and against other that are competitors or best in class.

4. The value of a website is measured only by its sales or its ability to generate leads– The website should be an integrated channel with the rest of your business. Even if a consumer doesn't execute a purchase on your site or submit a request for more information, their experience will shape their future buying decisions and their overall impression of your company.

5. Most metrics provide only an instant snapshot of customer behavior without long-term implications – Just as it's important to measure website traffic on a continuous basis, companies should be measuring customer satisfaction continuously to observe the impact of seasonality, competitive activity and other changes in the market that effect the demand for their products and services (e.g. high gas prices, legislative changes, weather, etc.).

6. Most metrics look at the past, but reveal nothing about the future – Most web metrics have no predictive quality. Sound investments are based not only on what the customer has done in the past, but on what she will do in the future. Driving a car forward while looking only in the rear-view mirror invites disaster; similarly, businesses can not only rely on making decisions based on the past.

What other challenges are you facing when you think about the metrics you have in place? We’ve structured our product to address all of these issues, but are there others that keep you up at night?

More on Methodology

I wrote a post recently on credibility, and it occurs to me that I should talk a little bit about the other tests of a solid methodology. Is it:

· Credible: How widely accepted is the measure? Does it have a good track record of results? Is it based on a scientifically and academically rigorous methodology? Will management trust it?

· Reliable: Is it a consistent standard that can be applied across the customer lifecycle and multiple channels? When all remains the same do we get the same results with every measurement?

· Precise: Is it specific enough to provide insight? Does it use multiple related questions to deliver greater accuracy and insight?

· Accurate: Is the measurement right? Is it representative of the entire customer base, or just an outspoken minority? Do the questions capture self-reported importance or can they derive importance based on what customers say? Does it have an acceptable margin of error and realistic sample sizes? Most customers will report that a lower price is important to them, but lowering the price may not induce them to buy.

· Actionable: Does it provide any insight into what can be done to encourage customers to return to the site, buy again, or recommend it? Does it prioritize improvements according to biggest impacts? A score without actionable insight helps us keep score but not improve.

· Predictive: Can it project the future behaviors of the customer based on their satisfaction with the site visit? The goal is to invest our efforts in those things that will yield value. Without predictive capability we are left to shoot at our targets in the dark.

A bit about reliability vs. accuracy vs. precision. An analogy I like to use is that of a watch. A second-hand gives you precision. Without a second hand, your watch can still be accurate and reliable, but it won’t be precise. Your watch can be precise but not accurate if it tells you that’s it’s 10:22:06 when it’s really 12:55:45. Your watch can be accurate and precise one morning, but if it doesn’t give you the same reading 24 hours later then it isn’t reliable.

Metrics that don’t have the above listed qualities can do more harm than good. They will provide with a false sense of security that will lead you to make bad decisions based on bad data – “garbage in … garbage out”. If you think it is 4pm but it is really 5pm you will be late for dinner. If you think your customers are happy with your product selection…and they are not… they will not be your customers anymore. The stakes are pretty high.

What Do We Mean By Credible?

We in the metrics industry talk a lot about methodologies, what they are, what ours are, and why it’s important to have them. When we’re talking about online measurement, is it important to have a methodology? Absolutely. Of course. Without question. Dictionary.com defines methodology as “a set or system of methods, principles, and rules for regulating a given discipline.”

 

I used to think this went without saying that having a methodology was important, but I’ve seen too many CEO’s lately rallying around metrics that have none, so maybe it’s worth restating.

 

But my point is that yes, having a methodology is a good step, but what really provides you with value is to look at the quality and credibility of that methodology. Anyone can invent or establish a “set or system of methods, principles, and rules” any day of the week. And they can give it an impressive name with official-sounding initials. It’s the oldest play in the marketing playbook.

 

But credibility is key. How widely accepted is the measure? Does it have a good track record of results? Is it based on a scientifically and academically rigorous methodology? Will management trust it? 

 

Most important of all, is there financial evidence that it works? Is there any actual, scientific proof that this methodology will produce the results you want and need it to? You should be looking for academic, peer-reviewed research to back up any claims about what this methodology can do for your company.

Which Retailers Satisfied Their Customers This Holiday Season?

Well Christmas has come and gone and two questions come to mind.

If you have young kids - how do you get all those toys put together?

And for everyone else, what retailers lead the way in satisfying their customers?

Let's address the second question today (you are on your own for the first one).

This year we measured satisfaction with the top 40 online retailers in the U.S. (get the full report here)

 
Overall, satisfaction was a 74 (on a 100 point scale) down 1 point from the 2006 holiday season.  The downward movement is a bit of a concern, but considering the very tough economic climate this holiday season and the disappointing retail sales, not too bad.  Netflix led all retailers with an impressive score of 86 (even with their score last year), followed by Amazon at 82 (down 2 points from last year).  QVC and L.L. Bean rounded out the top performers with scores of 80.

So who cares if customers are satisfied?  Well, not only consumers, but retailers should care too!  Satisfied customers become long term and loyal customers.  Dissatisfied customers become your competitor's customers. 

Comparing the top performers (scores of 80 and higher) to the bottom performers (scores of 70 and lower) we see that the result of higher satisfaction leads to significantly higher  purchase intent (33%), loyalty (23%), and word of mouth recommendations (26%).  That is the payback for satisfying your customers. 

And this year we also measured the top 30 U.K. online retailers.  This is our first time measuring the U.K. group.  Some of retailers performance was brilliant!  You can get the full report here.

 

The Online Holiday Season Is Coming To A Close

The latest online retail sales figure came out earlier today.  comScore is reporting that more than $26 billion has been spent online this holiday season so far, a 19% gain compared to last year.  While not as strong as last years growth rate of 26%, compared to total retails sales growth this year it is a very impressive number.  Early estimates are for a nearly flat year over year performance in retail spending.  A tough economy has put a significant damper on holiday spending.  Considering the dismal retail spending numbers, online retailers should be happy with the 19% year over year gain.

So...

While not a bad holiday season for online retailers, they cannot stand pat.  There has not been much innovation from 2006 to 2007.  Consumers expectations for online retail continue to go up.  Online retailers need to keep pushing the envelope.  What will be the improvements in 2008?  Here are a few ideas.

• Moving from mulit-channel to merged channel.  Whatever channel a consumer purchases from the experience should be the same.  They should be able to seamlessly move between channels.
• Is it time for free shipping all the time, with no restrictions?  I would challenge multi-channel retailers to determine the true cost when selling an item online vs. offline.  I would be willing to bet that in almost every case it is far less costly online, even if you provide free shipping.  When you factor in the increased inventory carrying costs, increased labor costs, increased facilities/real estate costs, it appears to be a no-brainer to offer free shipping all the time. This will eliminate price as a reason a consumer leaves your website to buy in a store.  This is good for consumers and good for retailers.  As a retailer are you willing to risk an intended customer to be distracted by other's advertisements and on their way to your store they buy from a competitor?  All because they didn't want to pay the shipping charges.
• Real time inventory that crosses channels.  If you truly want to provide that merged channel experience, you better let your consumers know if they are going to go to the store that the product is in stock. I can think of no more frustrating experience then after selecting the item to purchase you go to the store to purchase and they are out of stock.
• Better expectation management by online retailers.  Retailers can better manage consumer expectations by making sure they know when items are out of stock, making sure they know the return policies, etc.  Satisfaction, in simple terms, can be defined as a combination of what you get and what you expect. 

While some retailers are already providing these capabilities, they need to be come the norm for all retailers.  These are only a few things to think about. At the end of the day online retailers must continue to strive for improving the online experience and improving customer satisfaction. Improved customer satisfaction will lead to better financial results.

The ForeSee Results Top 40 Online Retail Satisfaction Index will be coming out in the next day or so.  This is a satisfaction measurement of the top 40 U.S. online retailers during the holiday season using the American Customer Satisfaction Index methodology.  It will be followed by a measurement of the Top 30 U.K. Online Retailer Satisfaction Index.  Check back in the next couple of days for details.

By the way, I was on Bloomberg TV last week, you can see the clip here...Bloomberg clip

 

E-Gov...Slipping a little but still outperforming other channels

For the third straight quarter, citizen satisfaction with federal government websites has slipped and is now at an aggregate score of 72.9, the lowest measured score since 2nd quarter 2005. However, citizens are still more satisfied with e-government than they are with federal government as a whole.

Key findings   include:

• Citizens satisfaction with federal websites is 8% higher than the annual ACSI satisfaction score for federal government as a whole.  This is a testament to the potential of the web channel to help government do a better job of meeting and exceeding citizen expectations.   
• Search remains a top   priority for government sites, meaning that search improvements will drive   satisfaction and loyalty
• Participation in the E-Government Satisfaction Index surged ahead 13% this quarter, demonstrating an increasing commitment of government websites to gauge performance in terms citizen satisfaction.

Check out the latest results at E-Gov Commentary

Ask ... and Listen

Very interesting announcement by Ask.com, introducing a service called AskEraser. 

And what does AskEraaer do?  It allows you to configure your Ask.com searches so that your search activity will be deleted form Ask.com servers.  NY Times Article

Ask.com listened to their customers.  Consumers today are concerned with protecting the privacy of their searches ... and Ask.com listened to these consumers and created an easy to use, easy to find capability to protect the privacy of the data.  Not that I have anything to hide!

Ask.com continues to innovate.  They have added great features to search, definitely worth checking out.  These features should raise the bar for all search engines.

 

For full disclosure, Ask.com is a ForeSee Results (satisfied) customer.  In fact, here is a recent webinar they participated in. Ask.com webinar                Other ForeSee Results Webinars

Not a surprise -- a ForeSee Results customer listening to their customers!

Online doing OK in Tough Holiday Season

According to the latest holiday shopping data, the retail sector is having a tough time, with the lone bright spot being the online retail space.

U.S. retail sales declined 4.4 percent in the week that ended Dec. 1 as fewer shoppers visited stores than a year ago, Chicago-based ShopperTrak RCT Corp. reported. A tough economy, with deep discounting early in the holiday season and no "super-hot" product this holiday season has contributed to a tough holiday season for retailers.

Yet, according to Comscore, Online spending during the week through Dec. 2nd increased 17 percent.  Now that is trailing last year's 26 percent pace, but still respective growth, and pretty consistent with the numbers we have seen online during this holiday season.  For the week ending November 30th we saw online spending increase 18% over last year.

So, while 17% year over year growth doesn't seem like a stellar year, we need to keep it in perspective compared to the broader retail sales struggles.  What would those online sales be if retail sales were even with last year, or even up 3%?   Would we surpass last years online growth?

So far online holiday shoppers have been more satisfied with the online holiday experience then last year.  Our latest results for online holiday shoppers satisfaction for the week end Dec 2nd should be out tomorrow.  Check back for the latest.