For Jack Ma, executive chairman of Alibaba Group Holdings, today is an extremely busy and lucrative day because the company he founded 15 years ...
(Page 2 of 2)
When we compare highly satisfied visitors (those with satisfaction scores of 80 and higher) to less satisfied visitors (those with scores below 70), we see that the most highly satisfied visitors are:
- 67% more likely to purchase next time they're in the market for a similar product.
- 47% more likely to purchase offline.
- 73% more likely to purchase online.
- Looking at purchase intent also sheds light on some key competitive situations by showing which e-commerce sites have a greater impact on their visitors' likelihood to purchase from any channel. For example:
- Netflix has a purchase intent score of 88; Blockbuster Inc.'s score is 76.
- OfficeMax Inc. has the highest satisfaction of the three biggest office supply chains (78) but the lowest purchase intent score (83). Staples Inc. and Office Depot Inc. have slightly lower satisfaction (77 and 76, respectively) but higher purchase intent scores (85).
- QVC has higher purchase intent than competing TV and web retailer HSN (87 versus 84).
- CVS Caremark Corp. (88) and Walgreen Co. (86) both have higher purchasing intent than Drugstore.com (83).
- 1-800-Flowers.com Inc. has much higher purchasing intent than FTD Group Inc. (76 versus 71).
- Apple (86) has higher purchasing intent than either Dell Inc. or Hewlett-Packard Co. (both 82).
The Multichannel Value Index
The web site plays a huge role in the multichannel sales process—site visitors use the web to look up pricing, shop, research products and compare merchandise from one retailer to another—all in preparation for either an online or an offline purchase.
The Multichannel Value Index shows whether a retailer is getting the maximum value from its web site to support the multichannel sales process. By comparing the Multichannel Value score to other high-volume online retailers, a multichannel retailer can determine how effectively its e-commerce site will drive overall sales compared to the competition.
The Multichannel Value Index in essence is a correlation between two key metrics: site visitors' online customer satisfaction and purchase intent. Since customer satisfaction drives and predicts purchase intent, looking at both scores in relation to each other reveals how the web site is supporting a company's overall goals.
If both the online satisfaction score and the purchase intent score are above average, it means the retailer is doing a good job leveraging its web site to increase sales across channels. All of the multichannel web sites with the highest satisfaction (Avon Products Inc., Apple, L.L. Bean and QVC) also have very high purchase intent scores.
High online satisfaction with low or average purchase intent indicates that an e-retailer is not quite meeting customers' needs in a way that translates to purchases, whether it's because of weak competitive positioning or not enough of a call to action on the e-commerce site. E-retailers in this position, such as Weight Watchers, need to determine which changes to web site elements will increase purchase intent, a process than can be accomplished through customer feedback.
E-retailers with low or average satisfaction but high purchase intent are leaving money on the table in terms of growth. E-retailers in this position (such as Costco Wholesale Corp., Safeway, Office Depot, and Lowe's Cos. Inc.) are often those with a strong multichannel presence and brand, which drives sales more than the web site itself. Since satisfaction drives future purchase intent, loyalty and a host of other behaviors with a direct impact on the bottom line, such e-retailers would be well served to evaluate how to make the web site contribute more tangibly to sales, both offline and online.
E-retailers with below-average online satisfaction and purchase intent should take notice. In this kind of competitive environment, no one can afford to be in this position for long. Retailers in this category include Nutrisystem, and Internet-only companies like PC Mall, BedroomFurniture.com, which is operated by CSN Stores LLC, and Build.com Inc.
Shrinking consumer spending and intensified competition for fewer dollars makes customer satisfaction more important than ever. Understanding the relationship between site visitors' satisfaction and their intent to purchase across channels provides a valuable multichannel value metric that quantifies how well an e-commerce site is either supporting or undermining multichannel sales. Companies with an accurate picture of revenue and other reflective metrics combined with satisfaction and other predictive metrics have the best chance of success in an ultra-competitive online retailing environment.