FREEDyourMind

FREEDyourMind is Moving

We have so many smart people at ForeSee, and while many of them have been guest posting on my blog for some time, it’s time for a new venue that showcases the variety of experience and expertise we are lucky enough to have in every corner of the ForeSee organization.

Yesterday we launched the new ForeSee Blog. We've moved all content from FreedYourMind to the new blog, so I encourage you to subscribe here—you can subscribe by author or by topic, or hopefully to the whole blog. I’d love to hear from you if there are particular topics you’re interested in or voices you’d like to hear.

Please start following us at blog.foresee.com for the latest information and analysis related to customer experience analytics across all customer touch points and across all industries. Here’s to 2012 and beyond!

2011 ACSI Report: E-Commerce Winners and Losers

On Tuesday, the American Consumer Satisfaction Index (ACSI) released its latest e-commerce report that includes scores for companies within the three main categories of e-commerce: e-retail, online brokerage, and online travel.

We discovered some pretty interesting things about the industry in 2011, both through our own research and through this ACSI research. We issue our own research throughout the year but ForeSee also partners with the ACSI in creating a report based on their findings. While you can download the full report for free at www.ForeSee.com, here are some of the highlights we discovered during our analysis.

First, regarding e-commerce as a whole, we saw customer satisfaction shoot up 0.8 points from last year to 80.1 on the ACSI 100-point grading scale. On the surface it might not appear to be that remarkable of an increase. However, considering the study’s sample size, it was a pretty significant jump. It also reflects a consistent trend over time: e-commerce satisfaction overall performs very, very well.

E-Retail:

Customer satisfaction with E-retail as a whole improved one point to 81 in 2011. This may be starting to sound a bit like a broken record, but Amazon leads the pack again in this category with an 86. The most dynamic change – but of no real surprise – in this category was Netflix’s fall from grace with customers. Netflix plummeted from a top-spot tie with Amazon to the bottom of the pack with a 74 satisfaction score – a 14 percent decline from 2010. This is one of the biggest drops in ACSI history.

Online Brokerage:

While there were clear leaders in 2006 when the online brokerage category expanded, the playing field has somewhat leveled out with a three-way tie for first place (satisfaction score of 79) . E*TRADE was the biggest mover with a 3.9 percent upgrade from the previous year.

Online Travel:

The race to be the top online travel company remains tight. The industry as a whole didn’t see a change from last year in regard to customer satisfaction with a 78. But, we did see Travelocity – once the lowest-scoring – edge out Expedia for the top the slot.

Check the complete, and completely free, historical report of online travel and brokerage, and e-retail scores measured by the ACSI at www.ForeSee.com.

With some dynamic changes in the three main categories of e-commerce, it will be an interesting field to watch as the first quarter of 2012 unravels.

UK E-Retailers: Best and Worst of the Christmas Season

Our annual study of satisfaction with the top 40 e-retailers in the UK is out today (the Top 40 in the US will be out next week on 12/28), and the findings are pretty interesting.

First, customer satisfaction is up for the fourth year in a row, to an all-time high for the UK of 73, a slow but steady increase over the last five years.

It's also interesting to take a look at how the individual companies did. We see a really wide range of performance among UK e-retailers--there is a notable 24-point gap between the highest-scoring e-retailer (Amazon.co.uk, 85) and the lowest (London2012.com, 61).

The last quarter of the year is the most important time of the year in e-retail in both the US and the UK– especially this year during such a tumultuous economic period. The last few months of 2011 and early 2012 will could make or break many retailers.  One way to look at it is that e-retailers have a unique opportunity to acquire new customers for years to come, strengthen relationships with existing ones and make a significant difference to their bottom line.

One of the best ways to increase success is by improving the customer experience, which results in increased sales, loyalty, and positive word-of-mouth recommendations. Understanding customer needs and expectations is critical for retailers to continue to survive and thrive in an increasingly competitive and winner-takes-all business environment.

How the Customer Experience Helps .Gov Reform Efforts

by Dave Lewan, Vice President

In April, 2011, President Obama issued General Order 13571, “Streamlining Service Delivery and Improving Customer Service,” part of the Campaign to Cut Waste. It requires federal agencies to save taxpayers money and time by eliminating or consolidating redundant websites and improving outdated, difficult to use, or poorly maintained sites.

Based on lessons learned from actions outlined in Executive Order 13571, each federal agency was directed to develop a comprehensive Web Improvement Plan to help streamline their web operations and improve customer service. 

Howard Merkel, who works with me here at ForeSee on the federal government team and Marianne Klinker, the social media specialist here at ForeSee, noticed how many of the Web Improvement plans mention ForeSee and the work that we do with federal agencies.  It is pretty cool to see them all in one place, so I wanted to share some of them.  

• “Improving the web experience for users is a top priority of the web strategy project that is underway. To establish a baseline, we have implemented the Foresee survey . . . both internally and externally, to assess how well our websites meet user expectations and needs. We use those results to guide our improvements to the customer experience. –Department of Transportation Web Improvement Plan
• “GSA.gov, USA.gov and GobiernoUSA.gov customers are surveyed on the websites using the ACSI survey to benchmark satisfaction on our sites against other government and commercial sites.” – General Services Administration Web Improvement Plan
• “SBA utilizes the ACSI Customer Satisfaction Survey and regularly analyzes the results and areas for further analysis to enhance the online experience across key elements, including search, functionality, navigation, look-and-feel, content, etc.”  – Small Business Administration Web Improvement Plan
• “Commerce operating units use a variety of tools to measure customer satisfaction  . . . We also employ tools that follow the American Customer Satisfaction Index methodology for surveys such as ForeSee.” – Department of Commerce Web Improvement Plan
• “The NRC uses a web measurement survey to enable site visitors to share feedback regarding their experience with our site, in a manner consistent with the American Customer Satisfaction Index. This standardized approach allows the NRC's site performance to be objectively benchmarked against that of other Federal agencies and private industry. We use this feedback to assess and inform our continuous incremental improvements.” – Nuclear Regulatory Commission Web Improvement Plan
• SSA uses the American Customer Satisfaction Index (ACSI) surveys to measure customer/users satisfaction, and to predict future behaviors and trends. ACSI uses a proven, scientific methodology to measure online satisfaction. The data is analyzed and used to help drive decisions on how to improve SSA’s online services.” – Social Security Administration Web Improvement Plan

Citizen satisfaction should be one of several critical components that agencies use when deciding how to streamline content and make federal websites more efficient. And, clearly, it is one of those components, judging by how often it is mentioned as a critical piece of the puzzle by the agencies themselves. Yes, they should also use traffic counts and other metrics to guide decision making, but knowing which sites are highly rated by citizens as useful, easy, transparent is a definite step in the right direction.

I'm really proud of the way our data and analysis is helping in these .gov Reform Efforts. I believe in this stuff, I really do. I wouldn't be here if I didn't. ForeSee’s research has shown that citizens who are highly satisfied with a federal government website rate their trust in the agency 58% higher and are 47% more likely to participate in government than citizens who are less satisfied. Satisfaction also increases the likelihood that the citizen will recommend the site to others, return to it, or use it as a primary resource as opposed to utilizing more costly channels.

These are all things that make the government more efficient, and efficiency saves us taxpayers time and money. It's great to play a part in that.

2011 Holiday Season: Satisfaction Update

Cyber Monday and Green Monday have passed. Free Shipping Friday and the Holidays themselves are in our future. Where do things stand in terms of the customer experience this holiday season?

(Why do we care? Because customer satisfaction, when measured correctly, predicts the future financial success of a company and also predicts future purchases, loyalty and recommendations. So we definitely want to keep on track of what has already happened with revenue reports, but looking at sales tells us what has already happened, whereas looking at satisfaction can actually predict the future.)

Sales tell us it has been a great holiday season so far. Comscore says holiday sales in the U.S. are approaching $25B, up 15% from last year. A record $1.25B was spent on Cyber Monday. We analyzed our customer data in the form of three benchmarks this week in order to look at the holiday season through the eyes of the customer:

1)      Customer satisfaction: satisfaction is rebounding, and on Green Monday, it was nearly as high as it has been throughout the holiday season so far.

2)      True Conversion Rates: “True” conversion rates are also higher than we’ve seen them in months. Retail sites are doing a good job of converting customers online this year.

3)      Social Media Value: social media has limited value as a direct marketing tool but remains a huge influence on shopping habits and decisions.

#1 Customer Satisfaction

Our retail benchmark suggests that online shopper satisfaction is picking up steam. As we reported, satisfaction was less than stellar on Cyber Monday, but satisfaction on Green Monday has rebounded, and was close to its highest point so far this holiday season, following a dip after Thanksgiving.

#2 True Conversion

Virtually all retailers measure conversion: how many people came to your site vs. how many people actually purchased? Typical retail industry conversion rates hover around 2 or 3%, according to Forrester Research. But what does that really tell you about your ability to help people accomplish what they intended to accomplish.

A couple of years ago, we introduced a metric called True Conversion (you can read more about it in Managing Forward). True conversion looks at how many people came to your site intending to buy, and then how many actually did.

So here’s how it shakes out this holiday season.

When we ask visitors to e-commerce websites over the holiday shopping season why they came to the website, 43% came with the intent to purchase, 50% came with the intent to research, and 7% came for some other reason.

Of the 43% who came to purchase, 49% actually did. That metric is a lot more valuable than knowing what your overall conversion rate is. THIS is the number you want to track and move the needle on. If your True Conversion Rate is 49% this holiday, you should be shooting for 50% next season or even 60% or 70%.

 

I should also mention that there is a huge range in True Conversion Rates when you look at individual retailers. On average, the True Conversion Rate was 43%, but in our benchmark, there was one multichannel retailer (let’s call them Site A) who had a True Conversion Rate of 9% while another multichannel retailer (Site B) had a True Conversion Rate of 79%! These are actual examples from the retailer in our benchmark during the 2011 holiday shopping season, and both are stores that should have a heavy component of holiday gift buying on their sites. This means that of the people that came to that website intending to buy from Site A, only 9% actually did. That’s a terrible conversion rate! That means that 91% of the people who came to that site with money burning a hole in their pocket left without spending a dime. But on Site B, 79% of the people who intended to buy actually did. That’s a much more impressive number.

 

Another interesting data point: 50% of visitors to e-retail websites came intending to research, with no plans to buy anything. Yet 9% of those visitors still converted, even though they didn’t plan to. That’s just extra money the retailer was probably not expecting.

I follow these True Conversion benchmarks pretty closely throughout the year (and if you are a client of ours, you can participate in True Conversion at no extra cost; just ask your analyst), and these numbers look great to me. A True Conversion Rate of 49% (on average for all our retail clients in the benchmark) is a great number—about 11% higher than it was just two months ago before the holiday shopping season got into full swing. We would expect True Conversion Rates to be higher at the holidays—there is more impetus to buy and to buy quickly.

The burning questions for retailers 1) Do you know your True Conversion Rate? 2) Are you measuring regular conversion, and what does it really tell you? 3) Do you know which elements of your website you should improve in order to increase True Conversion? 4) Is there anything you can or should do to convert more of those researchers, the people who didn’t plan to buy anything when they came?

#3 Social Media Value

A third benchmark we’ve been tracking for some time is the Social Media Value Calculation. This is basically a way to calculate the actual tangible value that social media brings to you, beyond just fluffy stats like numbers of followers or fans. The Social Media Value Calculation categorizes people based on the amount of influence your social media initiatives have on their decision to visit the website, store, or call center. You can gain greater insight into how much your social media efforts impact customer acquisition and even spending.

So here’s what we’re seeing in terms of social media value during the holiday season. We consistently see that social media URL’s are responsible for only about 1% of site traffic, and that is the same during the holiday season. However, although only 1% are coming directly from a social media site, social media was a primary influence for 7% of site visitors. And 16% of site visitors reported social media influenced their visit or purchase in one way or another. Moreover, those influenced by social media were more satisfied, more likely to purchase, more likely to recommend and more likely to return. 

So, clearly, social media is making a significant contribution this holiday season.  But this also tells me that social media leave a lot to be desired as a direct marketing tool (only 1% of site visits come referred from social URLs). The true value of social media remains in the arena where it’s still hardest to control—the viral, word-of-mouth nature of real social interactions happening between friends, colleagues, and acquaintances.

These are some of the themes we see emerging from our research, which is ongoing throughout the holiday season. Are there any surprises here for you? Are you measuring satisfaction, True Conversion and Social Media Value? What kinds of insights do these metrics give you during the holidays?

The ForeSee retail benchmark is made up of 159 individual websites, ranging from Fortune 100 retailers to smaller, regional retailers. Among the retail websitesincluded in the benchmark are retailers like Ace Hardware, Bass Pro Shops, Belk, Cabela’s, Chef’s Catalog, Eddie Bauer, eBags, Gamefly, Harry and David, Helzberg Diamonds, Home Depot, LEGO, Musician’s Friend, Panasonic, Samsung, Sears, Sephora, Sony, and StubHub.

ForeSee has been releasing a weekly online satisfaction benchmark during the holiday shopping season for six years. ForeSee collected more than 660.000 satisfaction surveys from people who shopped on retail websites in November and December 2011.

How Do You Top Dinner at the Big House

We just announced the date for our next ForeSee Summit in Ann Arbor.  It will be May 21 through the 23rd.  We are excited to host our customers in the great city of Ann Arbor on the campus of the University of Michigan.  We are excited for an even bigger audience, even better summit and even more fun.

Oh, for those of you that don't know what the big house, it is the name for the University of Michigan Football Stadium, capacity 109,901.  Although many times that capacity is exceeded.  This year in the Michigan vs. Notre Dame football game on September 10, 2011, 114,804 were in attendance.

The big question I have for our marketing team is how are we going to beat dinner at the Big House? Let me know if you have any suggestions.

 

 

 

Cyber Monday 2011: Satisfaction Off to a Slow Start, Despite Higher Sales

Our annual analysis of customer satisfaction on Cyber Monday is turning up some interesting finds.

1. Browsers (that's people who shopped online whether or not they bought anything) are less satisfied this year than last year.

2. In general, satisfaction is trending slightly down this year. We'll have to wait and see if that turns around.

3. Buyers are about equally satisfied this year and last year.

4. Apparel & Accessories websites (of all kinds, including shoes) are doing the best job satisfying customers so far this season.

It's very early; too soon to say if the slightly lower satisfaction this year will translate into a slowing down of sales in the coming weeks. Stay tuned!

The Holiday Season Is Off To A Good Start

Black Friday has come and gone and tomorrow is Cyber Monday.  So, let's take a minute and see how the holiday season looks so far and how the holiday weekend fared.

To start with, all seems right with the world, Michigan beat Ohio State this weekend in an exciting football game in front of over 114,000 people at Michigan Stadium ("The Big House") in Ann Arbor, and instead of dealing with the typical gray and cold November sky, we got 60 degrees of warmth.

Now back to the holiday season.

comScore reports online commerce on Black Friday was up 26% over last year.  A great start to the online holiday season.  Last year they reported a 9% increase over the prior year.  So far, so good.  Anecdotally there seemed to be more holiday sales and they seemed to start earlier this year than prior years.  We also saw a little more coordination between online and offline, although still many sites had their online specials and their offline specials.

Have you been online this holiday season?  Have your expectations been met?  Satisfaction drives success, both short term and long term.  Satisfaction comes from both your experiences and your expectations.  Did the experiences you had live up to the expectations you had?

The National Retail Federation is reporting that Black Friday brought $52.4 billion in sales during the four day weekend, up from $45 billion last year, an increase of 16%. It was also reported that shoppers average spend increased to $398 from $356 last year, an increase of nearly 12%.

So far we know that the holiday season has been a success to the retailers.  We will be digging into the Satisfaction data this week to better understand how successful the beginning of the holiday season is from the consumer's perspective.

 

Customer Satisfaction with Health Insurance Websites is Dismal

First, I'll share the results of our 2011 Healthcare Benchmark:

Two things jumped out at me about today's report, which is available for free download on our website.

1. Customer satisfaction for health insurance websites is dismal. I mean, dismal. On a 100-point scale, the average of all the health insurance websites we measure is 51. Compare that to pharma sites that get a 76 or to hospital and health system websites that get a 78. By any measure a 51 is BAD. Now, we definitely have individual health insurance clients that do very well. The individual company scores within the health insurance benchmark range from 30-79, which is a huge range.

But what that tells me is that it is possible for health insurance websites to do well. It is possible to crack the code of what customers want and need from a health insurance website. We can't just say "all health insurance websites perform poorly in terms of satisfaction, and there's nothing we can do about it," because some do quite well.

Moreover, if you look at the individual site that got a satisfaction score of 79 and compare it to the individual site that got a score of 30, the customers of the higher-scoring site report being FAR more likely to return to the website, recommend it, and purchase/service policies online instead of through a contact center (which saves a ton of money).  If the low-scoring health insurance websites out there could raise their satisfaction by even five or ten points, they would see tangible, measurable impacts on the bottom line. If they could get their scores up into the high seventies and in line with industry leaders, the sky's the limit.

I believe that customer satisfaction can be transformative to a business. More than just believing it, we have nearly two decades of evidence that when measured correctly, satisfaction predicts the future financial success of a company. It kills me that not every health insurance website in the country is measuring satisfaction, not to mention every hospital, every pharma site, every health product site, every health information site. All of these kinds of healthcare-oriented business could realize huge benefits (either in terms of cost savings, loyalty building, or revenue increases, depending on the business model) from a laser-sharp focus on satisfaction. And by the way, not only on their website (though I think for many organizations, it's such a natural place to start because it's so easy to collect data), but also in their contact center, on their mobile apps and m.mobile sites, in location (when appropriate) and anywhere else they interact with customers.

2. The other thing that really struck me was that the gap in satisfaction between public and private-sector health information sites is pretty narrow. Wouldn't you think that private-sector sites would knock government and nonprofit sites out of the water? Complaining about the government (especially about healthcare: no matter what your position is on the healthcare debate, you are probably unhappy with the way the government is handling it!) is practically a national past time. Not to mention the government has more rules and regulations, fewer resources, and less flexibility. And yet the private-sector outscores them by only one point.

This says more about the public sector than the private sector. It's not that private health information sites are doing poorly in terms of customer satisfaction, it's that the government and nonprofits have really made tremendous strides in the past decade to close the gap. The highest-scoring individual sites in both categories (public and private) is an 86, a score that is on par with Amazon, Google, and the websites with the highest satisfaction across all industries.

You can get the report on our website and read more about the other categories, what kinds of companies were included, and what the ranges of scores are.

Any surprises in this report for you?

Social Media Best Practices for Government

The federal government doesn’t have the same flexibility with implementing social media plans as the private sector. The feds have to deal with archaic public comment laws, bureaucratic approval processes for messaging, and smaller budgets.

However, despite all that red tape, our researchshows that all 15 cabinet-level departments have some presence on the 3 big social networking sites (Facebook, Twitter, and YouTube).

We've been releasing the ACSI E-Government Satisfaction Index since 2003. We're trying to shake things up a bit, and while we still plan to release quarterly updates on citizen satisfaction and citizen ratings of transparency, we're trying to supplement that data with other topics of interest to those who are working in e-government, whether at the federal, state, or local level.

So this quarter, two of our usability auditors (thank you Kamaria Campbell and Kathy Totz) did an exhaustive study of what the 15 cabinet-level departments are doing in terms of social media in order to make suggestions and recommendations to other government departments, agencies, and programs. You can download the full report for free on our website.

In addition to the social media best practices, the report also includes satisfaction scores for 100 federal government agencies and our quarterly Transparency Index, which provides a quantitative measurement of how transparent an agency is perceived by citizens. Rhonda Berg does a great job with the satisfaction and transparency data every quarter.

Here are some highlights of the report:

• All 15 executive departments are participating in the three most popular social platforms (Facebook, Twitter, and YouTube).
• Almost half of the 15 departments have more than one presence on a single social media platform.
• Organizations that have a number of presences on one or more social platforms should create an aggregate social media page that lists all of the options with which citizens can interact with them via social media.
• Citizen satisfaction, at 75 on the study’s 100-point scale or higher since late 2009 (with only one exception in the second quarter of 2010, when satisfaction fell briefly to 74.7), shows no sign of waning and maintains an aggregate score of 75.5 in the third quarter of 2011. 
• The aggregate Q3 2011 online transparency score is 77.3, which has increased from last quarter and is the highest aggregate transparency score measured so far.

What's missing from our list of best practices for government social media activities? Any thoughts? We'd love to hear them. I'd also like to hear it if you have ideas for other topics we can include in future ACSI E-Gov Satisfaction Index reports.