Imagine running a retail store blindfolded. If shoppers have a problem browsing or buying, they just go quietly to the store next door and leave partially filled shopping carts behind.

Online Issues Evoke Emotional Responses

Every so often you run a "shopper analytics" report to learn where they came from, the path they navigated in the store, how long they stayed, the percentage that converted from a visit to a sale, and the average order size per transaction. But the data doesn't tell you much about what really happened on their online experience, or how to fix it.

Of course, you'd never run a real store like this. Attentive clerks can see when someone needs help finding a product or completing a transaction, to deliver a great experience. But all too often, online shopping is managed as I described. Data rich but insight poor.

A new Harris Interactive study finds that too many online businesses are flying blind, losing a lot of business in the process. The study, commissioned by Tealeaf (a company that, as you might guess, offers solutions to help!), reveals that the online shopping experience is not getting better.

More and more people are shopping online, fueled (pun intended) these days by the rising cost of gas. However, just as in prior years, the study found that 90 percent of shoppers had problems while completing transactions online. Everything from trouble logging in to confusing navigation to technical problems.

Waves of Abandonment

OK, so what? Well, the problem is what happens after these bad experiences. With no humanware to assist e-shoppers complete their transactions, 41% take their credit cards elsewhere. Of those those that try to get help and have a bad experience with customer service reps, another 47% abandon.

Tealeaf figures the economic impact of at about 40% of all e-commerce business, or $57.3 billion. A billion here and a billion there, and pretty soon you've got enough money to bail out US banks.

But I digress. The story gets worse, because as we all know, people just love to share their horror stories. The study found that 84% shared their experiences online (58%) and offline (82%). So, you can add a few billion more for bad WOM.

Online Experience Trends

Ginormous Problem?

This study is obviously intended to draw attention to the fact that e-shoppers are having problems, and theoretically the impact is huge. But, I'm not so sure about that. 90% having problems? What does that mean? Let's dig a little deeper.

The study methodology says that Harris Interactive surveyed 2,010 US adults on August 5-7, 2008, and found that 1,798 (89%) have conducted an online transaction in the past year and 1,572 (87%) experienced problems when conducting online transactions.

Fine so far, but that doesn't mean that users experienced problems 9 times out of 10 transactions. One user could conduct dozens of online transactions in the past year, have one glitch and become one of the suffering 90%.

I conduct transactions online frequently, doing my bit to stimulate the US economy. I'm scratching my head to remember the last time I had a problem buying books, booking airline tickets or hotel reservations, or moving money between my bank accounts. Maybe I've just been lucky with the brands I frequent (Amazon, Expedia and Wells Fargo), but I'd probably end up in the happy 10% category using the Harris Interactive methodology.

My feeling is that economic impact is overblown, but the problem is still real—at least for some companies. Real, but unseen and underappreciated.

Another issue is that e-commerce is still growing nicely. Problems usually don't get fixed until growth slows...or an executive understand the lost opportunity to get even more growth.

What Customers Want, Online

Let's finish up by putting our customer-centric hats on. What does it take to make those online shoppers happy? As you can see in this chart, no big suprises: mostly "hygiene" factors like security, getting a confirmation notice and ease of use.

What is Important to Online Customers?

Now that you know that, what are you going to do? Do you really know if you're delivering the experience that customers expect? Frustrated users don't always call, and when they do, it can be very difficult to figure what went wrong based on verbal descriptions. Just ask the agents who field calls from online users.

To me, that's the beauty of what Tealeaf offers—it enables companies to record customers' actual online experience, figure out what really happened, and take action.

Danny Peltz, Wells Fargo's EVP of Wholesale Internet and Treasury Solutions, has been using Tealeaf for the past five years. Speaking on a panel in San Francisco on September 15th, Peltz said that Wells Fargo has made massive investments in online tools to provide the convenience and efficiency that customers want to conduct transactions. (But not as a replacement for the human touch.)

He told me the business case to invest in customer experience analytics was "obvious." With Tealeaf, if a customer calls in with a problem, the service rep can replay the user's session during that phone call and see what really happened. It fits their customer-centric culture, and makes good business sense, because excellent service helps retain customers, he says.

If online transactions are a growing part of your business, and you're not sure if your customers are happy, maybe it's time to find out. Do it because it's a customer-centric way to build more loyal relationships. Do it because you'll increase revenue if you can cut the abandonment rate and sell more to the customers already wanting to buy.

But do something, before growth e-commerce growth slows and you're forced to solve the online experience problems that you couldn't (or wouldn't) see, but were there all along.

Further Reading:

2008 Tealeaf Survey Highlights Potential Multibillion-Dollar Business Opportunity for Companies That Focus on Improving Online

Sifting Through Online Data Can Change Your Fortunes

Tealeaf 2008 Online Transactions Survey Executive Summary