How bad online experiences hit offline sales

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By: Wise Marketer Staff |

Posted on October 6, 2003

Continuous research has consistently shown that a bad online experience with a merchant's web site also has an adverse effect on that merchant's offline sales, according to data from the latest series of UK shopping habit surveys from Hewson Group.

When surveyed by Hewson Group, some 44% of online shoppers in the UK said that a bad online experience would discourage them from buying from a particular company's high street store or catalogue.

Much of the firm's survey data has been published in its February 2003 research report, Profit or Pain From Your User Experience, which was developed by the Hewson Group, (who conducted the research), and Landmark Consulting. One year after the original research was conducted, the firm reports a consistently strong message that a bad online experience adversely affects not only online sales but also offline sales, with both surveys revealing very similar results.

According to Hewson Group, this consistent message has two important implications:

  1. Improving the online customer experience will increase more than just internet sales; it will also uplift offline sales, both in the high street and from catalogues.
  2. Contact centres supporting web sales are also having a significant impact on high street and catalogue sales. This provides a compelling argument that the contact centre should treat itself as a profit centre rather than a cost centre.

Key findings
Hewson's report concludes that projects aimed at improving online customer service are both low risk and low cost, and that companies that implement such projects to improve the users' experience can achieve significant increases in sales, both online and offline, as well as reductions in service costs. The report reaches six conclusions and makes five key recommendations. Its conclusions are that:

  1. Improved user-experience generates a massive ROI. There is a massive return on investment (ROI) to be gained from improving end-to-end user experience, notably through higher conversion rates, greater usage and loyalty, enhancing brand equity, and the economic benefits of leading edge eService. By improving end-to-end user experience, a typical business can increase online sales by 64%. In addition, up to 70% of the direct cost to serve in the contact centre can be eliminated.
  2. Online sites are leaking customers at every point in the buying cycle. A significant proportion of visitors want to buy online but are finding it just too difficult or time consuming. The fact that it can be so difficult to buy online means that online service elasticity is high; make it easier to buy and sales increase. For example, by improving the online experience to match the best competitor, the average grocer can increase online sales by a minimum of 54%, and the worst by 480%. Travel businesses can uplift sales by 33% on average, and by 100% for the worst. But even in the highly competitive sector of books and CDs, where the hurdles to buying online are low, the worst business could improve sales by 19%.
  3. Online shoppers are surprisingly 'sticky'. Online customers are 'stickier' than their offline equivalents. Most online shoppers prefer to stick with a small number of tried and trusted sites (90% of online shoppers buy regularly from five or less sites). However, they spend a lot on the few sites they use - the indication is that about three quarters of UK online shoppers spend 2,020 per year on average with their top three sites. Contrary to received wisdom, the more online customers spend, the stickier they appear to be.
  4. Most companies have yet to adopt e-Service technologies. To date, only a few companies have adopted leading-edge e-Service technologies to improve self-service on their sites and to reduce the cost of service in their contact centres. This leading group have managed to reduce their contact centre's service costs by anything up to 70%, whilst increasing their online sales by 4% to 15%.
  5. Contact centres are still typically disconnected from sites. There is no real evidence that the typical user experience of telephoning call centres, or waiting for e-mails to be answered, has improved over the past two years. Hewson Group has observed almost no coordination between the many functions involved in online sales and the supporting contact centre, with a view to systematically improving e-Service and driving demand from the contact centre to the web. The economic dream of the web as a low cost service channel has not yet been realised because managers are failing to take action.
  6. General understanding of web usability is still in its infancy. One consequence of the relatively primitive nature of the internet is that there is not yet a recognised body of knowledge in this field. We see this lack of knowledge, rigour, and drive in the lack of usage of user experience feedback, and in the failure of most companies to appoint a 'user experience advocate' at executive level.

The report, which was sponsored by customer service solutions provider, RightNow Technologies, along with the latest survey results, can be purchased from the Hewson Group's website.

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