We’ve all heard the classic conundrum of businesses today – “Half of our Marketing efforts are working, we just don’t know which half”. Site Analytics strives to answer that statement by gathering data to allow business to align their message, media, offer and channel with their desired audience to optimize the results and return for the company.
However, in online business today, the conundrum has gotten much more complicated. Where does the analytics of the website end and analysis of the customer begin? While we construct our KPIs and dashboards to capture the successes of our campaigns, ad placement, engagement and conversions to measure the success of our company objectives, in the end isn’t the end goal really about the customer and the measurement their experiences and successes (or lack of them)?
Spending Growth on Customer Experience
In a recently published report ‘Customer Experience Spending Intensifies in 2008, by Megan Burns’, Forrester Research identified areas where North American business leaders are looking to focus their attention for 2008. In comparison to the previous year Forrester found some significant spending and planning increases, notably:
- 84% total increase in efforts to improve online usability
- 78% total increase to improve cross-channel interactions
- 80% total increase to make online interactions more enjoyable
While the research points to the continued growth of the analytics industry and covers increasing size of the customer experience budgets, another trend identified by Forrester drives the end focus of all the measurement back to the customer and their interpretation of success.
“We expect these trends to lead to more customer-centric cultures and processes by enabling firms to be more disciplined in their approach to customer experience…”
Why focus measurement on the Customer’s Experience?
The Internet channel is becoming a (if not the) primary channel for most businesses today and Ecommerce continues to grow with online growth rates significantly outpacing the offline growth rates in most industries. So
why is Customer Experience a top spending focus for 2008 and why did almost all
(91%) of executives surveyed in the Forrester research report say customer experience will be either very important or critical to their 2008 efforts?
Simple really… your customers are trying to complete their transactions, your site is letting them down, and they are switching to a competitor. And by the way, the results are getting worse instead of better.
Harris Interactive conducted the third annual survey of online consumer behavior, sponsored by Tealeaf®, and the findings were alarming:
- 9 out of 10 consumers experienced an issue that caused them to abandon a transaction
- 53% of users who experience website issues contact the company’s call/contact center to resolve but 49% of users who contact a company after experiencing a web-related issue were still unable to have that issue resolved.
The result of this poor customer experience translated into two immediate waves of online abandonment:
- 42% of users say they abandon or switch to a competitor when they experience even one online site issue
- 52% say they stop doing business with the company entirely, and 76% either stopped doing business entirely, decrease the amount of business they do, or lodged a complaint with the Better Business Bureau.
The third wave is even more risky. This is the threat to your brand loyalty and long-term customer value as a result of the poor customer experience and inability to complete an online transaction. With continued growth in blogging, social networks and viral content, your site failures are broadcast to an increasingly receptive audience actively seeking unmitigated third party reviews.
Indicators of a poor customer experiences are not limited the obvious but still prevalent today: site errors messages, performance issues and broken links – but include functional and business process challenges, and issues centered on usability and site-design. Collectively, however, they all have one commonality—
they all forced the consumer to abandon the transaction.
For the third year running, nearly 90% of users responded that they had experienced an issue that caused them to abandon a transaction. This rate of “failure” is extremely high and is not improving—in fact, it’s actually getting worse. Considering there are significantly more users and transactions every year, with a consistent rate of failure, the number of individuals and transactions adversely affected by issues each year is actually increasing.
The first threat (the “first wave” of abandonment) is very real, with 42% of users saying they abandon or switch when they experience even one issue. These users have little tolerance for failure today and that tolerance will only continue to decrease until leading ebusinesses focus their attention and budgets on improving the customer experience on the website and in the online support centers. Consumers expect the online channel to work as well as offline channels such as storefronts, branches, catalogs and agents with 82% saying they expected the online experience to be the same as the offline.
The second threat (the “second wave” of abandonment) is significant and is newly identified by the 2007 Harris Survey. The heightened rate of churn for online customers – with 52% saying they stop doing business with the company entirely and a full 76% who either stopped doing business entirely, decreased the amount of business they do with the company, or lodged a complaint with the Better Business Bureau is a serious threat to online businesses that demands that call/contact centers be equipped to handle the needs of online consumers, or risk losing them to competition permanently, since the tolerance for poor customer service after web-related issues is extremely low.
The third threat is just as challenging, and perhaps even more risky. This is the threat to your brand loyalty. One interesting example the survey identified is that the single most important factor to consumers in doing business online was website security. However, the survey also found site issues to seriously undermine consumer confidence, specifically relative to online security and privacy concerns.
While businesses today tighten belts and budgets for tough times ahead, Forrester expects metrics and executive attention to the customer’s experience to rise to top of mind, and budget. Forrester addressed these identified gaps in the true understanding of the customer.
“Most firms today struggle to measure the quality of their customer experience. To establish a framework for measuring customer experience quality, firms should identify key customers, the most important moments of truth in the customer experience continuum, the criteria customers use to evaluate those critical interactions, and metrics — both subjective and objective — that capture how well the organization met customer expectations in each area.”
Effective understanding of the customer does not stop with well designed and built site analytics dashboards and Key Performance Indicator reports; that is just the beginning of visibility into the complete online experience and your customer’s behavior and experiences.
It would be incredulous to believe an online business today could operate without detailed website analytics to gather the bits and bytes to measure the website’s effectiveness, In light of that:
- Why is there a gap in extenuating site analysis into the success of the customer?
- Why are customers continuing to experience issues completing online transactions?
- Why are online conversion rates stagnant across so many industries?
Web Analytics alone can’t provide all necessary measurement and optimization data to improve the customer’s experience.
Eric Peterson, from WebAnalytics Demystifed Inc. discussed these thoughts in a recent paper ‘Customer Experience Management and Web Analytics, From KPIs to Customer Transactions’ covering the foundational needs to combine multiple measurement disciplines for e-businesses today to understand true user behavior and allow companies to improve their customer’ experience.
“In today’s e-business environment, both Web Analytics and Customer Experience Management systems together should be considered foundational to website measurement and optimization. These similar-yet-distinct systems each contribute to a site owner’s ability to recognize, react, and respond to the ongoing challenges they face. Used together, these two technologies are collectively able to resolve the “What, Where, When, and “Why” of visitor interactions on the Internet.
The most forward-thinking companies have already recognized the value of investing in solutions beyond Web Analytics in order to measure and optimize their web channel. By understanding the true strengths and weaknesses of Web Analytics products and how Customer Experience Management systems can best be leveraged, web site owners will be able to extend their web measurement and optimization processes to achieve far greater levels of success – ultimately by improving the site, serving customers better, and increasing site revenue.”
Measure the Customer not the Website
The strongest companies today are taking action to align internal processes and measurement with cross-channel experiences like the website and call-center teams to improve measurement beyond the browser and making their customer experience their top-priority. Not surprisingly this translates to firms that put customer experience on the radar screen at the executive level are best positioned to improve the success of their customer’s experience across the entire enterprise.
While it’s debated today in site forums, user groups and blogs whether “Web Analytics is Hard” or “Web Analytics is Easy”, the recognized need to improving the customer’s experience is universally accepted by analysts, practitioners, experts, pundits and of course by the real end-focus of all these efforts, the customers themselves.
Learn more about how you can leverage Site Analytics using Customer Experience Management
Download all referenced reports from this article along with a Tealeaf customer case study
References
Forrester Research, an Independent Research firm in February 2008, “Customer Experience Spending Intensifies In 2008” by Megan Burns with Harley Manning, Olga Melnikova, and Steven Geller.
The Two Waves of Online Abandonment: The 2007 Harris Interactive Survey of Online Customer Behavior, Sponsored by Tealeaf®
Forrester recently surveyed 287 customer experience decision-makers from large US firms about their 2008 plans. Almost all — 91% — said customer experience will be either very important or critical to their 2008 efforts. See the February 7, 2008, “Obstacles To Customer Experience Success, 2008” report.
The Two Waves of Online Abandonment: The 2007 Harris Interactive Survey of Online Customer Behavior, Sponsored by Tealeaf®
Eric Peterson, WebAnalytics Demystifed Inc, 2007 ‘CUSTOMER EXPERIENCE MANAGEMENT AND WEB ANALYTICS, From KPIs to Customer Transactions’
7-Apr-08 10:45 AM
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The Pursuit of Measurement: The Customer’s Experience
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