E-Commerce Customer Satisfaction Surpasses Retail, Says Report

By SmallBusinessComputing Staff | Posted February 20, 2002
Wayne N. Kawamoto
Managing Editor, www.smallbusinesscomputing.com

On key components of customer satisfaction, such as perceived quality and value, e-commerce is registering very strong scores, according to a detailed report comparing key satisfaction factors between e-commerce and traditional retail.

"These numbers bode well for a new era of profitability for the Internet," says web satisfaction expert Larry Freed of ForeSee Results, "driven by an increasing sophistication about the link between customer satisfaction and profitability. We're past the days of just trying a bunch of cool ideas, and moving into a more bottom-line era of getting an understanding of what customers actually care about, and what will produce both satisfaction and profitability."

Overall satisfaction with online retail is higher than traditional retail. Online satisfaction earned a score of 77 vs. traditional retail's score of 74.8. All scores are on a 100-point scale.

The report rated e-commerce overall as well as individual companies in four key online categories--portals, financial services, and auctions, in addition to retail. The report includes a sampling of a dozen top e-commerce companies with specific ratings for each, as well as a broader sample of the individual categories and e-commerce as a whole.

The report is part of the quarterly American Customer Satisfaction Index (ACSI), which reported results for traditional retail, as well, allowing comparison between online and offline shopping experiences.

In e-commerce companies, Amazon.com posted the highest score (84), with BarnesandNoble.com (82) and eBay (82) not far behind. The biggest improvement was made by 800/Flowers.com, which jumped 10 percent from 69 to 76 (The ACSI measured e-commerce companies for the first time last year).

While the numbers provide cause for optimism for e-commerce and the economy at large, Freed says that the competition is going to get tougher.

Unlike e-tail, portals did not fare so well in the eyes of customers. Despite a 4-percent increase, America Online once again posted the lowest mark (58) among e-commerce companies. Freed notes, "AOL's score is representative of a common struggle among portal companies-not quite knowing what to give customers who still do not know exactly what they want from portals."

The Index is produced through a partnership among the University of Michigan Business School, ASQ, and consulting firm CFI Group. The e-commerce report was produced in partnership with ForeSee Results, a firm that specializes in assessing web customer satisfaction.

ForeSee Results, by using the ACSI technology for its clients, says it is able to meaningfully measure customer satisfaction and forecast the impact of web site changes on results such as customer loyalty and retention, referrals, and purchase behavior.

The ACSI is not a simple customer satisfaction beauty contest but rather uses a sophisticated methodology that blends sciences and mathematics to weight key drivers of satisfaction and isolate the components of satisfaction that produce certain customer behaviors such as loyalty and purchasing behavior.

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