Measurement Tool Shows Loyalty's Lacking
The findings of the first round of Dialscore research should prove alarming to online retailers, as the percentage of consumers loyal to a Web site averaged an anemic 15 percent.
The effects of this trend are just now beginning to be felt as sites such as Reel.com start to go down.
"Yes, there is a problem with loyalty. Companies were spending to gain but not retain customers," said Peter Mackey, president of Digital Ideas, Westport, CT. "We all suspected it was a problem. Now we have proof. Those in the middle to the bottom of the pack will start failing."
Poor customer service is a primary turnoff for consumers, according to Dialscore research. Of the seven categories, automotive sites ranked the lowest, with only 10 percent of respondents saying the sites resolved problems satisfactorily. Financial services were close behind at 11 percent; search sites and portals, 13 percent; healthcare, 16 percent; online travel services, 17 percent; and books, music and video, 21 percent. PCs, software and hardware received the highest ranking at 23 percent.
Customer service should become a site's top priority, according to Mackey. "People who had a problem [that was] handled properly left happier than they did before the problem," he said.
In one category, 17 percent of consumers who had not experienced a problem were loyal, compared with 34 percent of people who experienced a problem that was handled properly, Mackey said. "It really shows you can not only recover, but do better by giving people the feeling you're trying to solve their problem," he said. "There's a huge upside potential for companies."
Search sites had the lowest loyalty of any category. The four highest rated search sites or portals, based on loyalty, were: Yahoo, 23 percent; iWon, 20 percent; Ask Jeeves, 19 percent; and Dogpile, 18 percent. Looksmart and Go.com ranked the lowest at 3 percent each.
"There's a feeling that there's very little differentiation," Mackey said. "All [of the top rated search sites] have something relatively unique that they offer."
The top four individual sites in terms of loyalty were Babycenter.com, 35 percent; Edmunds.com, 31 percent; Amazon.com, 28 percent; and Outpost.com, 27 percent.
Companies can purchase Dialscore findings to gain a detailed insight into what consumers think of their sites as well as their competitors.
The research was conducted among 10,000 online consumers from Greenfield Online Inc.'s database of Internet users. The consumers participated in a 40-minute survey for which they dissected two sites with which they were familiar. Using the findings, Digital Ideas also acts as a consulting firm by recommending to companies a course of action for creating more loyal consumers.
The Dialscore loyalty rating is derived from six questions: how unique the consumer considers the site; whether it is better than its competitors; the likelihood that the consumer would recommend it to others; whether he believes he can build a relationship with the site; his satisfaction level; and whether the site exceeds expectations.
"We give a report card on a specific Web site's customer health specifically as it relates to loyalty," Mackey said. "We then give advice based on consumers' needs."
Digital Ideas expects to expand the study to 24 categories by year's end. The next categories that will be added are: consumer electronics; pharmaceutical and health products; toys; apparel; flowers; concert, theater and event tickets; cosmetics and personal care; pet products; and sporting goods. It also plans to expand the number of sites reviewed to 1,000.
The company also announced that it has partnered with Nielsen//NetRatings, an Internet media and market research provider, to provide audience measurement data as part of its service.
A report card for a Web site, the other businesses in the category and a general overview of the category, as well as a day's worth of consulting, cost $50,000. Each additional category is $10,000. The next report will be released in September.