August 30, 2004, 12:00 AM

Knowing What to Do

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Understanding what your customers want and need can help you prioritize. A scientifically-based customer satisfaction methodology can tell you the impact various changes will have. We had one retail customer who was told by its IT department that it needed to spend $200,000 to improve page download time by a half second when in truth, that mattered little to its customers. Analysis showed that tweaking product descriptions was the thing that actually mattered to browsers and encouraged them to buy, an improvement that required much less investment. If customers complain about your product selection, you have to ask if it is really impacting their loyalty to your company, their likelihood to purchase again or recommend your site to a friend. It might-or it might not.

If you have the right metrics in place as you measure your performance in step two, you’ll be able to use your findings to identify and prioritize improvements based on what will have the biggest impact on customers and potential customers. It can be tempting to fall into the trap of listening to anecdotal evidence, angry e-mails, and highly-paid web consultants or internal gurus with big plans that will cost big money. You must use a proven, scientific method that will determine what will actually impact your customers most, not what your experts think might do the trick.

You can’t go by self-rated importance. Ask any retail customer in the world what matters to them most and they’re likely to tell you “price.” Yet when you use customer satisfaction and behavioral data to predict future behavior, you’ll find that customers are driven by a lot more than cost.

Or it may be even more subtle. Tower Records found that when it analyzed the satisfaction of first-time and regular customers, there was a gap in perceptions of transaction costs. Tower was able to test customer price sensitivity to overall transaction costs, product costs, and shipping costs. Priorities were different for first-time vs. return customers and Tower was able to hit a better pricing strategy balance that increased conversion and overall sales.

Many e-retailers have the experience and marketing savvy to have the right impulses about web development. But a solid foundation of action-oriented information is key to success. The fourth quarter is an excellent time to reevaluate your objectives, establish a baseline, and begin benchmarking because so many retailers experience increased traffic and it is often a time of “lock down” for major changes anyway. In January, it will be time to take what you’ve learned, set priorities, and put this knowledge into action in a smart, strategic way that will help your organization meet its goals.


Larry Freed is an expert on web effectiveness and web customer satisfaction and president and CEO of ForeSee Results, a provider of online customer satisfaction measurement and strategies. He can be reached at 734-205-2555.

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