September 3, 2002, 12:00 AM

Can’t Get No Satisfaction

(Page 2 of 2)

The starting point for managing customer satisfaction, Freed says, is understanding which components of the web experience have the highest impact. The feature that tops the list is the image that the site portrays. The site’s image goes straight to the issue of trustworthiness. Retail web sites create an image of trustworthiness not so much through the presentation on the web, but rather in how the company acts offline, including how it resolves customer’s problems and how well established the company is. Part of that comes from marketing that increases consumers’ awareness and image of the company.

Next in importance is functionality. In spite of functionality’s high score relative to other metrics, retailers need to pay close attention to it because its impact on sales and conversions is high, Freed says. In that area they should provide services that extend beyond just the buying of products, Freed says. Such services would include product recommendations, virtual fitting technology and live chat. “There’s the advice side and the question-answering side and retailers need to address both,” he says.

Businesses are well advised to pay attention to customer satisfaction levels because satisfaction is the basis of a company’s prosperity, Freed says. Since 1994, the American Customer Satisfaction Index has moved up and down with consumer spending and corporate earnings of the S&P; 500. “Satisfied customers reward companies with, among other things, their repeat business, which has a huge effect on cumulative profits,” says Claes Fornell, director of the University of Michigan Business School’s National Quality Research Center. “It is not possible to increase economic prosperity without also increasing customer satisfaction.” The ACSI is produced through a partnership of the University of Michigan Business School, the American Society for Quality and consultants CFI Group.

The e-retailing site that earned the highest score from e-retailers has had the biggest impact in online retailing, although it has yet to make a profit:, which scored an 84, 45% above the industry’s overall score. “From the start, Amazon put customer satisfaction as a top priority,” Freed says. “Their future is very bright.”

It’s only a matter of time before consumers’ sophistication rises and once that happens the industry risks setbacks if it doesn’t address the problems that insiders have identified today, Freed says. “The insiders are out in front of consumers,” Freed says. “They have expectations of where the industry needs to go which will be closely followed by consumers. This is an opportunity to look into the crystal ball and realize that if we don’t fix it, this is how people will view us down the road.”

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