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Online holiday sales increased strongly this year, according to preliminary estimates. That's good news for small Internet retailers, but a recent survey suggests that online transaction failures can drive customers away. The survey, commissioned by San Francisco customer-experience software company TeaLeaf, showed that 89% of online consumers experience problems when conducting transactions. More than one-third of them say they go to competitors' sites when glitches happen.
Smart Answers columnist Karen E. Klein spoke to TeaLeaf CEO Rebecca Ward about what problems crop up most often and how Internet entrepreneurs can remedy them. Edited excerpts of their conversation follow:
How was the study conducted, and what were its major findings? The consumer survey was fielded by market research firm Harris Interactive between Oct. 18 and 20, 2005. They surveyed a nationwide sample of 1,859 online U.S. adults who have conducted an online transaction in the past year.
The study focused on consumer transaction experiences on shopping, banking, travel, and insurance Web sites. Along with the fact that the vast majority -- almost 9 out of 10 -- of consumers say they experience problems, another large number -- 82% -- said they're unwilling to accept a lower level of customer service when comparing online and offline transactions.
What does that tell small-business owners who are selling online now or hoping to start in 2006? What's compelling is that after 10 years of Internet shopping, people feel that the customer service they get online should be the same as in the offline world. Nobody expects to go into a department store, wait in a long line at the cash register, and then get sent to the back of the line. But that's what often happens in the online shopping experience, and it's clear that consumers aren't willing to tolerate it anymore.
We probably all have horror stories about technical glitches, but what specific problems did the consumers in your survey report most commonly? The top problem, reported by 40% of the people surveyed, was getting an error message. They put items in their shopping cart, enter their payment information, then they get a screen that says, "Error encountered," or "We're sorry, but we're currently experiencing system downtime." At that point, they either have to abandon the effort or start all over. It's really an insult to the customer, who has put a lot of time into browsing the site, picking out items, and preparing to complete the transaction. No wonder people get angry and leave.
The other top problems reported were poorly navigable Web sites (37%), the inability to complete a transaction due to an endless loop (31%), and difficulty logging onto the Web site in the first place (31%). The problem with all these errors is that they're endemic to the system because the seller isn't face-to-face with the customer and can't observe problems and take action to fix them.
Why aren't Web sites better designed to work smoothly from the beginning? The systems are incredibly complex, and the process is very unstructured. For instance, offline retailers will sometimes stand in their stores and watch how customers flow through the various merchandise displays, so they can decide whether the layout needs to be changed. In an online environment, shoppers are coming in through all kinds of different entry points -- many of them from e-mail promotions that take them directly to a particular featured product -- so it's much more difficult to control and evaluate.
Also, people use the Web sites differently than the way they were designed. Our customers tell us all the time that they design a process, think it's bulletproof, roll it out, and instantly they find that customers are using it differently than they expected.
What about online chat or phone-enabled customer service. How effective is that at helping to resolve problems while they're happening? It alerts companies in real time to a problem. But a lot of people won't bother to take advantage of it. About 39% of the survey respondents said they would try live customer help. The challenge is that the technicians who respond need to know what the shopper was doing when the problem happened. And most people don't remember what they were doing, because the process tends to be fairly complex.
One finding in the survey showed that only 3% of online consumers felt that Web page download speed contributed the most to their having a positive online shopping experience. Was that surprising? Not really, although a lot of online entrepreneurs still focus on how fast it takes their site to download. Making sure that performance times are within a specific range is important. But it's a lot more important to make sure people can complete a transaction online and get customer support if they can't.
The focus on speed is a legacy of the old days, when most people had dial-up modems where download times could be very slow. With more and more people on broadband connections, that's not true so much now.
What were the top priorities identified by online consumers? Among those who have conducted an online transaction in the past year, Web site security was listed first by 25% of respondents and ease of completing the transaction was listed second, with 20% reporting that contributed the most to a positive customer experience.
What can online retailers do to make those customers feel comfortable and keep them coming back for positive shopping experiences? Well, they can use our RealiTea platform, which gives retailers visibility into every user's online session and helps the company identify and fix hidden Web site transaction glitches. But even before that, while they're designing their online shopping sites, they need to focus on what's really important -- not just performance, but giving customers an easy, secure, and happy experience. They need to hold focus groups while they're testing the site and solicit customer feedback while consumers are using the site.
Overall, Internet entrepreneurs need to get away from thinking that their Web sites are self-service, stand-alone things that run on their own. They need to think about their online shopping site the same way they would think about any kind of retailing.
For instance, you would never open a store or a bank without a manager on site. Why? To solve problems, see what's going on, and observe the customers' experience with the business. It's the same thing with a Web site. You can't just build it and forget it.
Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues
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