Keep the customer satisfied

Guide to E-Commerce Technology

When multi-channel apparel seller The Territory Ahead ventured online, web marketing manager Eric Petersen could have used a compass like the one suggested in the company’s logo—in 1997, there weren’t many guideposts for e-retailers. The admittedly rudimentary initial effort offered a customer experience fraught with unintended frustrations for shoppers. With more enthusiasm than experience, the 12-year-old company quickly found that the demands of web selling went beyond anything it had tackled in its successful catalog and store business.

Here’s a sample: Online customers entered their orders into software that was designed for phone sales. Once the customer sent the order to The Territory Ahead, the company printed the orders so that call-center customer service reps could re-key them into the operating system between phone calls. The result was duplication of effort, an order entry error rate of 5% to 10%, and most seriously, a lack of real-time data on inventory levels. Customers would order an item, wait for delivery, then find out days later that the item was out of stock. The checkout process was cumbersome—it was easier for shoppers to abandon carts than to fight their way through the online process with special requests like multiple ship-to’s. “It wasn’t pretty,” acknowledges Petersen. Web sales limped along at well under 5% of sales, as too many frustrated customers bailed out.

Like other e-retailers in the same fix, The Territory Ahead struggled with what to do first. Faster downloads? Live chat? “There was a lot of pressure for sites to add bells and whistles, some of which weren’t really panning out, to the detriment of sales,” says Mark Carmody, co-president.

Three years later, The Territory Ahead is shooting up in the customer satisfaction rankings—from a 20th place to a respectable 6th—of web retailer ratings service Gomez Advisors of Lincoln, Mass. It’s no surprise that customers are more satisfied now than they were before: The Territory Ahead based its improvements in customer satisfaction on what its customers told it to do.

The Territory Ahead spent more than a year analyzing competitors’ web sites to figure out what customers liked and didn’t like at the “best

of breed” apparel sites. It gathered feedback from some 200,000 web customers of record as well as shoppers who registered but didn’t buy. Direction fairly flew out of those findings, and a next-generation plan took shape. Among other things, customers wanted real time inventory tracking across channels, easier navigation and a streamlined check-out.

The customer feedback was the framework for a 15-month-long overhaul of the web site. The company acquired new hardware and software to integrate order entry into the operating system. That move provided real time inventory data to customers on every product. It upgraded shopping cart functionality, allowing shoppers to move more easily with the cart around the site and providing customers with a list and running total of shopping cart contents. And it added more detail to product images while managing to speed up downloads by spreading the workload from one server to five.

After the site relaunched in September, it wasn’t long before the effort began to pay off. Unique monthly visitors have nearly quadrupled to 120,000 from average 32,000 earlier in the year; conversion rates rose to 16% from 11%.

The customer-driven site improvements are providing a powerful boost to sales by unleashing new cross marketing opportunities with the catalog and driving new affiliate and portal deals. Some 100 web sites now feature products from The Territory Ahead, while products are uploaded to the shopping areas of Yahoo! Lycos, Excite and AltaVista through the company’s deal with Catalog-City.com. At the same time, The Territory

The maxim that the customer is always right takes on a whole new spin today for web retailers battling for sales. For smart e-retailers, it means going beyond simply being responsive to individual customer’s concerns to searching them for patterns and using the data proactively to direct site development. The focus now is not on just driving traffic or developing a brand online but on how to turn all those visitors into buyers. But while focus is one thing, coming up with a viable plan that delivers results is another. The total customer experience online is about more than simply customer service. It touches wide-ranging e-retail operations from merchandising to customer support to IT. Improving the customer experience online requires e-retailers to mesh the actions of diverse departments into a unified strategy and execution.

Yankee Group retail analyst Christine Loeber compares devising an Internet retailing approach to a wheel, with each component of an online customer service strategy an interdependent spoke. “The wheel is only going to run strong and fast if all of those spokes are holding the wheel together,” she says. “It’s important for companies to understand who their customers are, mine their data and ask what they want.”

Despite strides forward at some e-retailers, many research analysts say web merchants have far to go as a class in improving customer satisfaction online, a factor that links directly to low conversion rates industrywide. “Internet retailers have not done a particularly good job of being customer focused. The genesis for most sites was driven as much by what your engineers could do as by any intensive research to understand how consumers use your site. It’s getting better, but there are still some fundamental things that don’t work,” says Seth Geiger, vice president of professional services at Los Angeles-based BizRate.

In fact, research firms have generated plenty of data and anecdotal information on online shoppers’ beefs. The takeaway is clear: shoppers are finding plenty to complain about, ranging from tardy delivery of items to web site graphic overload. Too many shoppers are stumped by site design, for instance, with clutter in some cases amounting to what Geiger terms the “Las Vegas Strip effect.” Search engine and search paths aren’t up to snuff, leaving shoppers in an endless click and wait cycle that leads to bail-outs. Then there’s the quality of customer support. “It’s one of the biggest weaknesses on the web today,” Geiger says. “About 21% of web transactions involve some component of customer support, but those involving customer support are typically twice as big in dollars—so in fact, about 40% of dollars spent involve customer support. You can see how important that is.”

Geiger’s comments echo the anecdotal findings of e-Convergent, a provider of customer interaction software and services. The Pleasanton, Calif.-based company runs an annual contest to determine the best and worst customer experiences on the web during the holiday shopping season. Hundreds of responses clustered around a few themes, according to Rene White, senior vice president of marketing. “Customers can’t get real-time help while online,” she says. Customers also complain that they don’t get timely answers to email queries, that they can’t track their orders online, and that customer service channels aren’t integrated, with phone reps, for example, having no history on email queries.

And these findings cover only the experience of users willing to go online in the first place and put up with whatever frustrations they find. The customer experience—to be specific, anticipation of a less-than-satisfactory one—keeps millions more from shopping the web at all.

Take the buyers of highly customized sports equipment, for example. “We have products that are discernibly different when people try them, and we believe that experience must be there in order for people to make an effective decision,” says Luke Reese, vice president and general manager of Wilson Golf, Chicago. Wilson doesn’t encourage sales of its clubs online, and uses its own web site to post extensive product information to drive online shoppers into stores.

“As technology grows, retailers are going to continue to come up with more innovations and different ways to showcase their products, alleviating some of the touch-and-feel issues and harder merchandising challenges they’re facing online,” says John Lovett, an analyst with Gomez Advisors.

But it’s important to note that while advanced technologies to showcase the product may be the answer at online sports retailers, listening to the customer will yield different answers for other web merchants. Handbag and luggage merchant eBags.com, for example, offered shoppers plenty of images and product detail—but at a cost of speed that led to too many shopper bail-outs. The answer for eBags was to invest in technology that powered up server capacity to speed downloads, a strategy that paid off in higher conversion rates. Whatever the feedback from customers, the key for e-retailers is to translate it into directives that provide a blueprint for the site’s next generation.

At Corte Madera, Calif.-based Restoration Hardware, customer feedback didn’t lead to greater technology investment, but simple enhancements to the home page when the site relaunched in September. Based on feedback from hundreds of customers since last year, the upscale hardware and home gear merchant posted a link to a new section in a prominent spot on its redesigned home page. Named “You spoke, we listened,” the link outlines major improvements to the site that were the direct result of customer feedback. Among them, the site downloads up to 60% faster, offers twice as many products per page, features a running tally of shoppers’ purchases, and streamlines checkout.

Those enhancements didn’t so much require major investment in new technology as a simple lightening up of the site. “We had an extremely graphically heavy home page,” says Jonathan Plotzker, web and catalog operations director. “In the redesign, we lowered the number of graphics and used html instead of graphics where we could—it loads almost instantly. Instead of having a sage green background be a graphic, for instance, we used repeating pixels. Take one pixel that fades green and repeat it as often as you need across the row and suddenly you have an html color that loads instantly instead of a graphic that takes up 10 kilobytes. About 90% of what we did to improve the site was based on what customers told us they wanted — the rest was web development and our intuition.”

Within six weeks of relaunch, Restoration Hardware’s online sales channel was revving up. “The number of people visiting our home page but then leaving has come down by about 75%,” Plotzker says. The conversion rate, which he characterized prior to relaunch as “on the lower end” of web retailers’ 2% to 8% average, nearly doubled. And that’s not all. The site continues to solicit customer feedback after every improvement listed in the section, with a link that opens up an email form addressed to Restoration Hardware, to direct future web site development.