August 28, 2003, 12:00 AM

To measure is to improve

Since its beginning, the web-based retailing industry has become a haven for measurement maniacs.

By Jack Love

The industry’s best web merchants are forever measuring things-conversion rates, e-mail click-through rates, site navigation routes, entry and exit pages, traffic from affiliate and search engine marketing programs, and page load and visit times. Since its beginning, the web-based retailing industry has become a haven for measurement maniacs.

Why do e-retailers measure so much? In part, because they can. Since web retailing is driven by computers, which retain data on every task performed, retailers can measure every movement by customers on their sites, something they can’t do at their stores. In my view, however, a more significant explanation of this measurement craze is that e-retailers are driven to continually improve their operations in order to attract and retain customers and thereby establish their young industry as an important and permanent part of the retailing matrix.

Now, some web merchants are beginning to adopt a customer satisfaction score as their primary metric. At last month’s eTail 2003 East conference, several e-retailers endorsed what for them is a brand new stat-the American Customer Satisfaction Index. A measurement methodology developed a decade ago at the University of Michigan to compare customer satisfaction scores for consumer goods and services, the ACSI has recently made its way into the lexicon of leading e-retailers.

Their recent adoption of the ACSI method is a testament to the success of ForeSee Results, a 2-year-old company that markets this survey technique to web-based retailers. ForeSee reports that customers give e-retailing a satisfaction score of 83, significantly higher than the rating of 75 they give offline retailing. Now, for the second consecutive year, ForeSee and Internet Retailer have co-sponsored an insider’s survey of customer satisfaction, which asked e-retailers to rate their own industry’s performance and used the ACSI to score results (reported on page 10). As was the case last year, e-retailers gave retail web sites a lower customer satisfaction rating (63) than consumers gave, a sure sign that those who run web sites know there is still much more that can be done to improve them. The fact that consumers give higher marks to retail web sites than to stores is a positive sign for Internet retailing. But the fact that e-retailers judge themselves more harshly on customer satisfaction than consumers do is an even better sign, because desire to improve rarely exists in those content with the status quo.

Internet Retailer is in the enviable position of providing objective reporting on industry trends to a readership that is hungry for information to improve their use of the Internet in retailing. We take that role very seriously, which is why most of our resources are spent on developing our editorial content. In this regard, internetretailer.com reached a significant milestone last month when we posted the 10,000th article on our site, which maintains an easily searched archive of every feature story, news article, or press release published by Internet Retailer magazine and its companion IRNewsLink e-mail newsletter.

Here is a wealth of useful information on every facet of e-retailing. A search on “search engines” will uncover 285 articles, on “conversion rates” 240 articles, and on “e-mail marketing” 300 articles. E-retailing leaders are mentioned just as often: 375 articles each are turned up with “Amazon” or “eBay” searches, 233 for “Wal-Mart,” and 217 for “Lands’ End.” For web merchants looking for information to improve customer satisfaction, our vast editorial online is an excellent place to start. Incidentally, if you search our site on “customer satisfaction,” you will unearth more than 400 articles, including the complete report on the latest ForeSee Results-Internet Retailer survey.

jack@verticalwebmedia.com

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