Introducing my new coverage area: eCommerce & Online Customer Service

[Posted by Diane Clarkson]

These are certainly challenging economic times and online customer service has never been more important to achieving eBusiness goals.

I’m very excited to announce that I will be taking on a new coverage area on the eBusiness and Channel strategy team and will now be focusing my research on Online Customer Service.

My first three reports have recently been published: “Financial Web Sites Need Customer Service Help”, “Travel Website Customer Service is Far From Perfect”, and “Online Retail Customer Service Availability Needs Some Improvement”.

I’ll be presenting a teleconference on “Improving Online Customer Service Availability By Strengthening the Basics: A Review Of Financial, Travel, And Retail Web Sites’ on Thursday, August 27, 2009 1:00 p.m.-2:00 p.m. Eastern time. I’ll present the findings of Forrester's evaluation of online customer service availability on 90 leading eBusiness Web sites across the financial services, travel, and retail industries. You can register for this teleconference by clicking here.

In the coming months, I will be looking at how online customer service can drive eBusiness, including:
– Understanding consumer preferences
– Developing online customer service strategies
– Best practices for deploying self-service, email, IM Chat, Click to Call
– Social media as online self-service, including Twitter, online communities
– Benchmarking online customer service availability and effectiveness

I look forward to delving deeper into these topics and invite your feedback on current and suggestions for upcoming research.

A CPG Company Not Afraid To Experiment

So I'm in Cincinnati right now at P&G's self-described "Digital Hack Night" where the goal is twofold: to get their brand managers to understand a bit more about digital marketing strategies and to raise money for their "Loads of Hope" charity which is tied to Tide. For the next 2 hours, nearly 100 people--P&G brand managers, bloggers, Twitterers, authors and agency folks--are trying to use every social network--Twitter, Facebook, MySpace, YouTube--we have at our disposal with the ultimate objective of getting as many Loads of Hope tshirts sold on their eCommerce site as possible. We have a big leaderboard screen, QVC-style, that shows exactly how many unique visits we've received, what our conversion rate is and how many t-shirts we've sold (5,000+, 6% and 1,000+ by the way, respectively, at the moment).  What a great way to get non-believers in the channel to see quickly, in real time, how rapidly an idea can radiate through a network and drive sales. And they did that by allowing influencers of small and large networks to go do what they do best, with the brand that is a crown jewel of the company.  Given that the biggest objection to companies engaging social networks is "What if the message is turned against us?", P&G gets extra kudos for creating a live lab that showcases the power of viral marketing with the full understanding that there are risks but that the digital channel has characteristics like speed and reach which are unmatched in other channels.  If only every company were so fearless!
Btw, if you want to buy a t-shirt to help the cause, do it by 11am ET on March 12. 

Search Engines: A Simple Way To Better Understand Consumers

[Posted by Brad Strothkamp}

A large portion of a Forrester analyst's job is keeping tab on hundreds of different Web sites. During my Web site travels over the years, a few truths have become evident:

• You can tell a lot about how a company is organized based on their Web site
• Too much sales content is written or developed by individuals that have never sold anything
• Sites often suffer from lack of understanding of how consumers make product and service choices.

The results of these truths are often Web sites that are driven and designed by opinions about how consumers shop versus actual hard-facts.  When I came to Forrester from Wells Fargo nearly five years ago (eek!), I made it my personal goal to try to provide some tools and data for clients to make more rational Web site decisions.  During this search, I happened upon a free source of information that any Web site manager has access to that can give you a good sense of the mindset of the consumers.

It's search data.

Yes, the same information you use to buy search keywords on Google or Yahoo! can be used to make better site decisions. Simple searchers on Google Adwords search tool reveal insightful details about how consumers think about products. 

Here are a few examples:

• Financial services: A search on "credit cards" yields interesting insights.  First of all in the top 30 search terms, there are absolutely NO provider brand name (e.g. (Blank) Bank Platinum Rewards VISA).  What you do see are a few distinct term categories including customer segments like consumers with less than perfect credit searching for "bad credit credit cards" or consumers that are interested searching for particular types of cards searching for "free credit card" or "no fee credit cards"
• Retailing: A search on "luggage" reveals that brand names are more important to the category as there are terms like "Samsonite luggage" appears high among the results.  Additionally luggage features are important as there are also terms like "carry-on luggage" and "leather luggage"
• Travel: A search on "hotels" reveals that factors like destination are important with search terms like "las vegas hotels". Additionally, types of hotels are important with terms like "luxury" and "cheap" as well as desire for hotel deals with terms like "last minute hotels" and "hotel discount"

So what does all this mean?  It means the next time you are unsure of the right words to use on a page or how best to set up navigation on your site there is a free and easy resource to conduct some primary research. While it may not solve every problem, it will help keep your site focused on what aspects of your product are important and the words consumers use to describe the products and services they are interested in.

Your 2009 To-Do List

[Posted by Chad Mitchell]

My colleagues and I continue to receive questions from eBusiness managers about prioritization in 2009.

There are 3 common questions:

• What should we do to survive and succeed?
• What should we do first?
• Does my priority list make sense?

Allstate is currently running an ad about getting "Back to Basics." The spot states that "after the fear subsides" people enjoy the small things such as home-cooked meals and time with family. "And the basics are good."

eBusiness and channel managers should follow this logic and focus on the fundamentals.

Here are my thoughts on getting back to the basics in 2009. Call it a honey-do list for eBusiness and channel managers:

• Focus on retaining profitable customers - In a Q1 2008 Forrester survey of CMO's (well within the economic downturn), improving customer retention and lifetime value were ranked in the bottom 3 of the top 9 CMO marketing objectives. Amazingly, CMO's were still focused on acquisition, product development and brand awareness. That is upside down and backwards at the same time. Focus on retaining profitable customers by evaluating key metrics like total products per customer, late payments, and total customer service inquires.  Then "cut the fat" because not every current customer is profitable.  Convert single account owners to multi-product customers with email marketing retention programs and personalized x-sell product recommendations on the Web.  Stop investing in marketing or customer service time on unprofitable customer segments.
• Improve the multichannel customer experience - Many companies are restructuring marketing, sales and service teams around the Enterprise Customer Experience (ECM). A senior level executive is responsible for all customer-facing channels and content. I wrote about this recently in my trends 2009 eBusiness research and shared a sample org chart from a top 5 US insurance company. The insurer has realized increases in customer satisfaction and retention after implementing ECM.  Major reorganizations take time and can be painful as many companies downsize.  eBusiness managers are also investing in enterprise search tools that deliver more relevant content from Web customer inquiries.  Better search results can reduce call center volume and improve profitability.
• Leverage analytics across the Web and all channels - The priority list is simple to create when you are measuring what is wrong within your company. Lower online conversion rates? Increased customer attrition? Increased online cost per sale ? If you don't know what is wrong, start their first. Leverage the customer data available within the Web and other channels. Web site analytics, call center tracking and other business intelligence tools are must-haves for any eBusiness and channel manager.

The prioritization is up to you because you know your business better than anyone else. These are proven strategies supported by our research from consumers and executives across several industries.

Take a deep breath...remember that the sun is still shining and focus on attainable goals. We will all be OK...some times we just need to "get back to the basics."

Do you agree or disagree?

How A "Tiny" Company Is Winning Online

[Posted by Sucharita Mulpuru]

I used to swear by one of the big online photo printers. For years, this company generously let me store thousands of my pictures and printed them beautifully and inexpensively, sending them to me promptly whenever I needed. I even used this company to make novelty products like calendars, mugs and holiday cards. In the last year or so though, I started to notice some kinks; the company overhauled their eCommerce platform and my browser seemed to crash more than usual whenever I uploaded photo batches. Furthermore, it was much more difficult to navigate through my images, page refreshes seemed to take forever and I couldn’t edit any pictures as easily as I’d done in the past. I came to dread the photo ordering process.  When it came time for me to print holiday cards this year, I just couldn’t bear the frustration of dealing with my once-favorite photo company and went Googling for another. I ran across a stationery company called Tiny Prints and printed my cards with them.  I wasn’t alone. Of the dozens of holiday cards my family received this year, nearly a quarter of them (and all the best-looking ones) were all, incidentally, from Tiny Prints. This was no coincidence. They did so many things better than their competition. Here are a few of them:

1. A shipping offer. On their Google paid search ad and on their homepage, Tiny Prints trumpeted a free shipping offer to all customers. The other company? They sent me a flier with a $10 off promotion but it had expired by the time I got around to printing holiday cards. There’s not enough that can be said about the psychology of free shipping in online retail and how effective it is at driving sales. Companies like Zappos which often have higher product prices but perpetual free shipping know this well. Sixty-one percent of holiday shoppers have told us in the past that they shop online more often with retailers that offer free shipping.
2. Product search and assortment. This was why Tiny Prints won me over. I had visited no less than a half dozen other websites looking for a cardstock quality holiday card in the color pink that would let me upload two photos of my daughters. I was ready to just go to Target and buy something generic until I went to Tiny Prints. Tiny Prints had a parametric search and quick look function that efficiently let me find exactly what I was looking for, without extra clicks, without cumbersome page refreshes. Even the process of uploading photos and viewing my proofs seemed to be easier and faster here. This religious focus on a great product detail and search results experience is well-placed. In a survey we did last year with eCommerce executives, more retailers were focusing their investments on those two priorities over anything else.
3. Fulfillment. At checkout, Tiny Prints told me exactly when I would received my purchase, and by that day, I had sure enough received my package. That degree of transparency and staying true to those details matter. It engenders trust, reduces unnecessary call center contacts and helps cultivate word-of-mouth enthusiasm. One of the biggest sources of frustration to holiday shoppers every year is that shipping takes longer than expected.

In the end, I ultimately spent a bit more than what I had planned to, but that was a tradeoff I willingly made to save time and get exactly what I wanted — which are the main reasons consumers in general shop online.

What Keeps People Shopping

Forrester recently released our 2008 Customer Experience Index, a ranking of 114 companies by consumers who responded to an online survey asking how useful, easy to work with and enjoyable the various companies were. Get this, six of the top eight were retailers. The top retailer on the list? Barnes & Noble. So, what does this mean for retailers?

1. A great customer experience is a must-have in brutally-competitive, margin-thin industries that comprise most of the retail landscape.  It is not an option. Not surprisingly, the ten worst performers in the index were TV, wireless and web service providers and health insurance companies--regulated industries that give consumers no choice but to interact with them.

2. A great customer experience is needed just to keep you in the game. Companies like Borders, Toys R Us and Circuit City also scored very well on our list in spite of the fact that they are all in poor financial predicaments. Can you imagine how much worse off these companies would be if they didn't have a great customer experience? We know that good customer experiences drive loyalty, and those loyal customers are often the ones that keep store traffic robust and inventory moving. A personal example-I was at a local shopping complex this weekend and needed to kill some time. So I went to one of my favorite stores, Barnes & Noble and ended up spending money I hadn't planned on spending when I first walked into the store. That sort of impulse revenue creation is the direct tie between customer experience and sales. This of course is all the more imperative in an economic downturn.

3. Good customer experiences mean different things for different retailers. Knowing the core attributes of your brand (e.g. low prices, value, quality products, product support, product selection) and then choosing to deliver most aggressively against those factors that matter to customers (and ignoring those factors that do not matter) in a particular retail environment are critical. Let's take Wal-Mart as an example. Their core value proposition is everyday low prices. So an "enjoyable" experience at Wal-Mart is finding those unbelievably low prices during every visit, not talking to a knowledgeable sales associate or finding deep product selections. Wal-Mart gets what matters most to their shoppers, as do all the best retailers out there.

Compass Bank: Allowing truly customized accounts

[Posted by Brad Strothkamp}

Forrrester recently conducted a teleconference where I presented and spoke about what I considered the top best practices in financial services in 2008 to be. Many of the best practices I have written on in the past, but one that stood out is a tool developed by Compass Bancshares, a bank with 166 branches in Texas, Alabama, Arizona, Florida, Colorado, and New Mexico. 

The tool allows customers to build a truly customized checking account. So why is that so interesting?

I recently published a brief that discussed how consumers choose checking account providers. The key thing I took away from the research is that different segments of consumers value different things from their bank. Younger consumers care about fees and the convenience of ATMs, and older consumers care more about good customer service and competitive rates. But in today's world most banks (with a few exceptions) offer a one-size-fits-all account.

NOT SO WITH COMPASS.

The tool from Compass is the first one I have seen that lets shopper choose exactly what elements of a checking account are important to them. If they use foreign ATMs a lot, then they can have those reimbursed. If earning extra rewards is important, they can earn double rewards. Shoppers are allowed to select two options at no cost. Beyond that, each selection the shopper chooses increases the monthly cost of the account.