How to Acquire Satisfied and Loyal Online Customers

Online retail is big business. That's why marketers invest so heavily both in "tried and true" and in innovative new ways to drive prospects and customers to their websites. We recently did some deep analysis into our Spring 2007 Top 100 Online Retail Satisfaction Index to identify which sources drive the most and the highest quality site traffic to retailers' websites. This report analyzes satisfaction of the various methods of generating site traffic (email, search marketing, recommendations, shopping comparison sites, etc.) to see which result in the most satisfied customers - - who are also more likely to purchase in the future and recommend the site to others.
More than 20,000 online shoppers, provided by FGI Research's SmartPanel, were asked to rate their satisfaction with various aspects of the online shopping experience for the top 100 online retailers as identified by Internet Retailer magazine's annual Top 500 Guide. The research was conducted with browsers, who visited the site but who may or may not have purchased. Key research findings about the effectiveness of various tools for acquiring customers include:
Retailer brand awareness is the most common and most powerful reason to shop online. The number one reason that online shoppers visited a site was because of familiarity with the types of products offered by the site/company and brand. One in three shoppers surveyed said they went to a site because they were familiar with the company. This group also had the highest satisfaction score: 77.
- Promotional emails are an effective marketing tool: Twenty-four percent of shoppers came to a site because of promotional emails from the company. This group is more satisfied than people who came to the site because of a search engine, and this group is 16% more likely to buy that those who came through a search engine.
- Search engines and shopping comparison sites bring more first-time visitors, who are significantly less satisfied and less likely to buy. While the largest group of first-time site visitors came via a search engine or shopping comparison site (29%), this group was less satisfied than first-time visitors who came to the site because of familiarity with the brand or product, promotional emails from the company or a recommendation from someone else. The challenge for retailers with search engines and shopping comparison sites is that the products are not always what they appear to be once the consumer arrives at the site. And, search engines and shopping comparison sites sometimes set expectations regarding shipping charges and inventory status that are not always consistent with what the consumer actually finds on the site.
Word-of-mouth recommendation is more effective at driving desired future behaviors than offline advertising. Satisfaction for online shoppers who came to the retail site based on recommendation enjoys a slight advantage over those who were prompted by offline advertising. But word of mouth has a significant advantage in driving key the future behaviors of recommendation, online purchase and loyalty.
Product Familiarity, Promotional Emails Most Effective at Driving Satisfied Site Traffic
The chart below shows the percentage of respondents that came to the site through different acquisition sources. It also shows satisfaction for each group, as well as scores for both tangible future behaviors and intangible attitudes that are linked to satisfaction.
? Not surprisingly, the 34% of shoppers who are already familiar with the products of the company, site or brand are the most satisfied with the retailer overall (score of 81) and the most committed to the brand (80). Satisfaction drives desired future behaviors, and this group of shoppers is also the most likely to recommend the site to someone else (77) and to purchase from the retailer the next time they are shopping for similar merchandise (78). These statistics show that the brand awareness created by the retailer is a very strong driver of sales, and that the importance of the online experience on retailers' financial success cannot be underestimated. The risk that the majority of all online retail will be driven by Google and other search engines is not materializing.