The results are back: ForeSee Results has summarized the influences behind consumer satisfaction and purchase behavior for Holiday 2008 customers. Larry Freed, CEO of ForeSee Results, presented the company’s research at the eTail 2009 conference in Phoenix, AZ, this past week.
Although sales saw a sharp overall decline in 2008, traffic held. Right now, consumer spending is driving the economy, creating a hyper-competitive environment in which only the strong survive – an example of accelerated Darwinism.
“Cutting costs is kind of like a death march,” Freed said. “Price is important, but experience is just as important.” ForeSee asked customers an interactive question: How satisfied were they with holiday sales in 2008? The answers were mostly positive, rating between 7-9.
Measuring satisfaction is crucial because the consumer’s satisfaction drives conversion, as well as freedom of choice. ForeSee Results found that the old metrics are no longer relevant: Consumer satisfaction is everything when it comes to a company’s future success. Freed suggested an important equation:
Satisfaction = [What the customer expects] + [What the customer gets]
Highly satisfied customers were more likely to purchase online than offline.
Satisfaction is driven by a combination of content, functionality, merchandise, and price, according to ForeSee Results. eCommerce as a percentage of total retail sales has seen a significant uptrend, Freed said. According to a University of Michigan study, eRetail amongst buyers, at 82 percent, outperforms offline retail at 75.2 percent. During the holiday season, discounts improved customer satisfaction ratings. Some of the most successful companies in this area were Bazaarvoice clients QVC, Walmart, and L.L.Bean.
So how can businesses optimize customer satisfaction? “We will see more retail casualties,” Freed said. “Retailers are going to need [social media] in the future to stay competitive.” Online channels have more opportunities than offline: Ninety-two percent of consumers said that they had been influenced by user-generated product reviews, while 65 percent said their purchasing decisions were influenced by social media.
Mobile media usage in stores is low at 29 percent, but growing rapidly. While only 31 percent of consumers said they had used a mobile app for in-store shopping before, the results proved social media had a very high impact within the ranks of its users. Seventy-two percent used their mobile device to ask someone about a product, 40 percent to send a picture to someone, 24 percent to comparison shop, and 15 percent to look at product reviews
Most companies said that they did not have mobile apps for their retail companies, although 17 percent said “Yes” and 16 percent said they soon would.
“We are in the fight of our lives,” Freed said. “Now is the time to rise above the competition.” Satisfying customers is the key to victory. Will your company rank amongst the winners?
Points to Remember:
1. The consumer is in charge: Costs of switching vendors are low, the competition is high, and knowledge is power
2. Consumer expectations for the Web continue to rise when it comes to social media: Make sure your company doesn’t end up playing catch-up to its competition
3. Customers want free shipping, consumer reviews
4. Your most valuable acquisition sources: Consumer familiarity with your brand, campaign emails
5. Social media. Enough said.
6. Consumers will go where they’re satisfied
7. Satisfaction drives conversion, loyalty, and word of mouth
8. Measure what matters most – your customers. Satisfied consumers are an asset, while unsatisfied ones are a liability
9. You cannot manage what you can’t measure: “UGC is a must-have in today’s world”
10. Garbage in/garbage out: Measurements must be accurate, precise and reliable – Web analytics must be implemented properly