E for Excellence
As consumers continue to flood the World Wide Web, the marketplace is making a grand shift: Formerly captive customers are becoming informed consumers, says Larry Freed, president and chief executive officer of ForeSee Results. Freed is also author of the latest American Consumer Satisfaction Index Annual E-commerce report, released this week, which revealed that e-commerce -- with a score of 81.6 on a 100-point scale -- continues to outpace the rest of the service sectors. The closest competition came from healthcare, a distant second with a score of 76.8.
E-commerce continues its advance for the third year in a row -- a trend that Freed says is not too surprising. "With the economic downward pressure going on all around us, the Web/Internet seems to be, for many reasons, the place where consumers are continuing to go," he says. Consumers are empowered online, armed with features such as price comparison tools and product reviews, forcing companies to continually up the ante if they want to stay in the game.
The ACSI measures e-commerce based on three industries: e-retail (83), online brokerage (up one point from last year to 79), and online travel (down one point to 75). Companies taking the lead in this sector include:
- Fidelity.com...................84; and
According to Freed, the simple definition of customer satisfaction is a combination of what you get and what you expect. Consumers expectations have reached a plateau in terms of their expectations from brick-and-mortar locations. While customer satisfaction may be judged by a consumer's interaction relative to other industries, Freed says that, for the most part, the expectations are restricted to the individual experience.
In the online world, customers aren't just looking at the company, they're looking at the channel experience for the next best thing. "When you go to the sites, you're looking for more than what you got in the past," Freed says. "The fact that the sites are able to keep pace with that is pretty impressive."
In such a competitive market, Freed advises companies to listen to their customers through the use of strong metrics that are precise, accurate, and reliable. Technology can track online activity in a manner that was never possible in a brick-and-mortar location. Typically, businesses will look at abandoned shopping carts as a characteristic of a discontented customer -- and a lost sale -- but that's no longer a fair assumption. Consumers increasingly do research online and an abandoned shopping cart could easily just mean that that customer ended up going to that same site's real-world store to purchase an item.
In addition, Freed says that consumers who complain outright represent just a passionate few -- and not the segment that sellers need to worry about most. "How many people don't
complain?" he asks, rhetorically. "It's that marginally satisfied group that leaves and goes somewhere else and won't tell you they're upset," he says. Technology can help, he says: Through measures like the ACSI, companies are able to maintain a "constant pulse" on the consumer base, learn from it, and improve.
The techniques of the e-commerce world are ones that can be emulated by the rest of the marketplace, and will likely lead to increased customer satisfaction scores across the board. "[Companies] need to keep improving," Freed says. "Don't stand still -- especially on the Internet. If you stand still, you're going to lose ground." The future holds no limits on innovation and as consumers will never want to settle for anything less than the best. "Before, the three most important things about retail was location, location, location," Freed says. "The Internet has eliminated that. The customer is more in control than [she's] ever been -- and that's a message for all industries."
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