Survey: Online Transaction Issues Can Have Negative Effect

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Online transaction failures can wreak havoc on e-business, forcing 7 percent of online consumers to abandon transactions entirely and 40 percent to turn to competitors.

These were key findings from a consumer survey released Sept. 25 commissioned by TeaLeaf Technolgy Inc., a San Francisco, CA-based provider of online customer experience management solutions and conducted by Rochester, N Y-based Harris Interactive.

"These findings clearly show how online issues can really undermine consumer confidence in a company's brand, and can have a damaging effect on a company's sales growth and image," said Rebecca Ward, CEO, TeaLeaf.

The second annual study, which focused on US consumer transaction experiences on shopping, banking, travel and insurance Web sites, found that about nine in ten (88 percent) online consumers experienced problems when transacting online, potentially impacting an estimated 4.5 percent of all online consumer transactions.

The survey also revealed that while online adults are substantially more likely to have conducted a shopping transaction this year compared to last year (66 percent in 2006 versus 62 percent in 2005), customers are increasingly unwilling to tolerate lower levels of service online, with 85 percent of adults expecting service levels online to be the same as offline, compared to 82 percent in 2005.

Harris Interactive fielded this year's survey between August 29 and 31, 2006, among a nationwide sample of 2,790 U.S. adults 18 years of age or older.

For the survey, respondents submitted vignettes of bad online experiences, most concerning failed, inaccurate or incomplete transactions, endless "loops" in a business process or inability to simply checkout at retail sites.

The survey also found that 91 percent of online consumers who experienced any type of problem when conducting an online transaction said they are at least somewhat likely to question the ability of a company to keep their private data secure if they encounter an online issue.

The survey found that since Web site security (26 percent) and ease of completing a transaction (22 percent) are the top two factors contributing to a positive customer experience when conducting an online transaction, any type of problem or issue has the potential to negatively impact the trusted relationship between the consumer and the Web site, with severe implications for the brand.

Many sites use rewards or frequent shopper or traveler programs to enhance customer loyalty, but errors undermine those efforts. The survey found this to be especially relevant for online travel. Twice as many online consumers who have booked travel accommodations online in the past year rated the ability to complete a transaction without a problem (94 percent) as being important to them in choosing their online travel provider than frequent traveler loyalty and rewards programs (47 percent).

The top problems that would cause online consumers to immediately and permanently turn to a competitor's Web site are:

· Incorrect information or lack of adequate information on the Web site (41 percent);

· Inability to complete the transaction due to an endless loop (36 percent);

· Difficulty navigating the Web site (37 percent); and

· Being automatically kicked off the page (25 percent).

Ms. Ward added that technology form Tealeaf, which offers a 360-degree visibility into the customer experience, "enables companies to focus on the most important issues, and to provide more customer-centric sites, service and support to protect their brand and ultimately increase sales and customer loyalty."

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