Survey: Positive experience needed to create e-buyers

How do good e-retailers turn visitors into buyers? By giving them a good online experience, according to a survey released last week by research company ForeSee Results.

ForeSee measured the top 40 US e-retailers to see how well they were meeting -- or beating -- customers' expectations in terms of an online shopping experience, said Larry Freed, CEO of ForeSee. The report found that price was seldom a major factor in whether people like a particular online retailer. What mattered most is whether they had a good online shopping experience.

Although companies routinely report sales figures and study them for trends, "financial metrics are about what has happened," Freed said. "They don't do a great job of telling you what is going to happen in terms of if the users are very satisfied with their online experience."

But customers' satisfaction with their online experience can be just such an indicator, Freed said, pointing to the survey results. If online retailers focus on improving the customer experience, more people will buy from them and their revenue picture will look brighter.

"There's a huge payback for a great online experience. Ultimately, what users want is to get their needs met and their expectations exceeded," Freed said. "If the company is doing a great job of meeting and exceeding their expectations, then they're going to be long-term loyal customers."

Between March and April of this year, ForeSee Results surveyed 11,000 people who had recently visited -- but not necessarily made a purchase from -- at least one of the top 40 companies' Web sites. ForeSee used the University of Michigan's American Customer Satisfaction Index to rank the retailers.

"We found some interesting things at the top of the list. Three of the top five are Internet pure-play guys: Netflix, Amazon and Newegg.com," Freed said. "They haven't been around very long, but they're doing a great job of meeting their customer needs. And the other two in the top five, L.L.Bean and QVC, are not traditional brick-and-mortar companies -- they are more direct model, multichannel retailers."

Brick-and-mortar companies don't do as good a job at developing Web sites as pure-play firms, Freed said. But if they improve the online experience, it can have a positive impact on both online and off-line sales, he said.

The company at the top of the list was online DVD rental company Netflix, which scored 85 out of a possible 100 points -- even though it ranked only 17th in overall sales volume, according to the survey. Amazon.com, which had the most online sales, ranked second in terms of customers' satisfaction with their online shopping experiences, achieving a score of 84. It was tied with QVC.com, while Newegg.com and L.L.Bean had scores of 82.

In terms of sales volume, Dell ranked second, while Office Depot ranked third, even though their satisfaction scores came in at 77 and 75, respectively. Those scores left them tied for eighth and ninth places, respectively.

That means that while those companies are doing well in sales, they could be doing better, Freed said.

"The companies that are tops in terms of online sales but lower in terms of customer satisfaction means the users are not nearly as satisfied as they could be," he said. "So there is an opportunity that if they do a better job in the online experience, they will see more people buying from them."

By contrast, a company with fewer online sales but higher customer satisfaction has a comparatively rosier financial future, he said.

"Those companies that are doing a great job of taking advantage of the Web will have ... satisfied consumers coming back and purchasing more," Freed said. "And dissatisfied consumers are going to look elsewhere. The value of satisfaction directly translates to profitability."

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Linda Rosencrance

Computerworld
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