June 8, 2007, 12:00 AM

Customer satisfaction drives conversion rates, loyalty

E-retailers have many tools available to measure their business after the fact. But calculating conversion rates and tallying site visitors don’t do much for predicting the future, says Larry Freed, CEO of ForeSee Results.


E-retailers have many tools available to measure events after the fact. But calculating conversion rates and site visitors don’t do much for predicting the future, Larry Freed, CEO of ForeSee Results, told attendees during his presentation at the Internet Retailer 2007 Conference & Exhibition in San Jose, CA.

“Customer satisfaction is the best measure of a web site’s success,” Freed said. “Satisfaction is going to drive conversion and loyalty.”

ForeSee Results uses the University of Michigan’s American Customer Satisfaction Index to measure customers’ happiness with a web site shopping experience. ForeSee is an Ann Arbor, Mich.-based research firm that specializes in online customer satisfaction research.

In February ForeSee surveyed more than 20,000 online “browsers,” or visitors, of Internet Retailer’s Top 100 Web Retailers who might or might not have made a purchase during the previous 14-day period. Visitors also were surveyed just prior to the mid-May publication of the Internet Retailer Top 500 Guide.

Netflix.com and QVC.com lead the top 100 retailers in terms of customer satisfaction with scores of 85 each. Amazon.com (83), Barnes & Noble’s BN.com (82) and DrsFosterandSmith.com (81) comprise the rest of the five sites with scores above 80. The aggregate satisfaction of the top 100 online retailers was 74 on the ACSI’s 100-point scale.

Freed added that the most satisfying sites are almost evenly divided between Internet-only and multi-channel retailers, indicating that multi-channel retailers “are stepping up to the plate and offering a better experience than the web-only companies. The challenge to web-only companies is to stay ahead.”

This year’s Top 500 Guide also featured a new metric, the ForeSee Results/Internet Retailer Purchase Intent Index seeks to quantify how likely web site visitors are to actually make a purchase.

Amazon.com and QVC.com have the highest purchase intent at 88. That means shoppers who visit those retailers are very likely to make a purchase. Nine sites, all multi-channel retailers, have strong purchase intent scores of 85 or higher. The other seven: BN.com (87), AAFES.com -- Army and Air Force Exchange Service -- (86), Costco.com (86), MarketDay.com (86), Target.com (86), LLBean.com (85), and Walmart.com (85).

In addition to predicting purchase motivation, the purchase intent score provides a return on investment tool to help top executives understand the value of their web site, Freed added.


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