A good online customer experience can have extended word-of-mouth benefits; slow response times jeopardize millions in potential revenue gains.
Posted Jan 6, 2005
The Customer Respect Group (TCRG), an international research firm that focuses on how companies treat customers online, found in a recent study it conducted that during fourth quarter 2004, about 40 percent of retailers answered customer questions within a day. Some 13 percent did so within an hour, including the holiday shopping season. The 40 percent figure was double what it was a year ago, but it still pales compared with customer expectations that all online companies should answer emails within 24 hours, according to Terry Golesworthy, president of TCRG. About 15 percent of companies responded within four hours, but another 15 percent did not respond to online inquiries.
"Companies are losing millions of dollars by not being responsive to online customers," Goleworthy says. "Online customers believe they deserve a certain amount of attention. They will not tolerate being ignored." Two-thirds of customers will go to a competitor's Web site if they don't get a response in a "timely" manner, according to Goleworthy; customers generally consider an answer within 24 hours to be timely. In addition to responsiveness, the survey's "customer respect index" is based on a Web site's ease of navigation, respect for the privacy of the customer, customer focus, transparency, and principles.
"...Online sales are up sharply this holiday season, possibly as much as a 25 percent improvement overall, so that the online retailing industry is now worth over $23 billion," Golesworthy says. "It is interesting to see the growing correlation between the top performers in the [survey] to the top revenue performers. Customers buy from Web sites that they trust and where they believe their dollar--and just as key, their personal information--is safest."
A good online customer experience can have extended benefits. In a late November 2004 survey, NRF Foundation, the education and research arm of the National Retail Federation, found that online shoppers were more likely than traditional shoppers to tell others about a positive experience (73 percent versus 66 percent). Online shoppers spoke to an average of 2.7 people about a positive experience, while traditional shoppers told 2.4 people about their experience.
A poor online experience, conversely, will go beyond affecting more than the immediate customer: On average, traditional shoppers who had a bad customer-service experience told 3.1 people, while online shoppers told an average of 2.8 people about their experience.
In its fourth quarter 2004 survey TCRG found that Amazon.com did the best among specialty retailers and among all companies, with a ranking of 8.0 out of 10, just ahead of Footlocker, Ann Taylor, and Pottery Barn (all at 7.9). Payless ShoeSource ranked the lowest among 39 specialty retailers, at 4.7. Sears Roebuck topped the survey's general merchandiser list (7.8), while May Department Stores (4.5) fared worst. Kroger (6.9) scored highest among food and drug companies, while Safeway (4.6) scored lowest.
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