Top-100-Online-Retail-Satisfaction

Spring 2011 Top 100 Online Retail Satisfaction Index

Customer Satisfaction as a Forward Looking Metric For E-Retailers
May 10, 2011 by Larry Freed President and CEO, ForeSee Results

© 2011 ForeSee Results

Spring 2011 Top 100 Online Retail Satisfaction Index

Introduction

As the online retail business slowly rebounds from the challenges of the last few years, the web channel hasbecome a more important influence than ever before on the relationship between retailers and customers. With this evolution comes the need for a more sophisticated, forward-looking set of customer metrics that will enable retailers to gauge not just the success of a single visit, but how well the website supports the entire customer experience across all channels. As technology, customer savvy,and customer expectations evolve, how should retailers measure the success of a website? Should we use web metrics like average page views, number of sessions, number of unique visitors, and number of returning visitors? Should we use financial metrics like average order size, return on inventory, return on investment, or customer acquisition cost? Should we use qualitative measures likeengagement, customer loyalty, or brand recognition?

How the Survey was Conducted The Top 100 Online Retail Satisfaction Index measures browser satisfaction with the top 100 online retailers by 2010 sales volume as reported in the 2011 Internet Retailer Top 500 Guide. Satisfaction data were collected through FGI Research’s SmartPanel – a nationwide group of 1.6 million consumer households that haveagreed to participate in opt-in surveys – and analyzed using the methodology of the American Customer Satisfaction Index (ACSI), which was developed at the University of Michigan. During February 2011, ForeSee Results collected data from more than 22,000 respondents who had visited the top 100 online retail sites within the previous two weeks, whether or not they made a purchase. The ACSI is a leadingeconomic indicator and a cross-industry benchmark of customer satisfaction for seven economic sectors, more than 43 industries, and more than 200 major companies in the United States, measuring approximately 45% of the U.S. gross domestic product. Applied to the web, the ACSI methodology goes beyond accurately assessing current satisfaction to predicting how improving online customersatisfaction will foster future behaviors tied to loyalty, such as purchases.

These are all important indicators of past performance, but they don’t tell us much about where our business is going tomorrow or how effectively our websites are impacting cross-channel sales next week, next month, or next year.

In an ongoing study, researchers at the University of Michigan have conclusively shown a strongconnection between customer satisfaction and a company’s financial future, whether the markets are up or down. Companies that perform well on the American Customer Satisfaction Index (ACSI) enjoy better revenues, profits, loyalty, word-of-mouth recommendations, and return visits. They even achieve higher stock prices. The ACSI’s findings have been corroborated by other researchers, and thefindings are consistent: high customer satisfaction, when measured scientifically, predicts future success. Because of this proven link between customer satisfaction and future growth, ForeSee Results measures customer satisfaction with the top online retailers each year for the top 100 retailers in Internet Retailer’s Top 500 Guide using the methodology of the ACSI. We also track purchase intent,which provides a benchmark for retailers who are already tracking these numbers, whether or not they are in the top 100, and the scores also allow for critical comparisons between top competitors.

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Spring 2011 Top 100 Online Retail Satisfaction Index

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