New Survey Reveals Online Transaction Issues Have Negative Effect on Customers and Businesses
40% of online consumers would abandon transactions entirely or turn to competitors upon experiencing problems; 91% of those who have experienced problems question companies' ability to keep private data secure.
San Francisco, CA, September 25, 2006 - The results of a newly released consumer survey commissioned by Tealeaf and conducted by Harris Interactive® suggest that online transaction failures can wreak havoc on Ebusiness, forcing 40% of online consumers1 to abandon transactions entirely (7%) or turn to competitors (32%). The second annual study, which focused on US consumer transaction experiences on shopping, banking, travel and insurance websites, found that about nine in ten (88%) online consumers experienced problems when transacting online, potentially impacting an estimated 4.5% of all online consumer transactions2.
Forrester Research projects consumer ecommerce spending of $201 Billion in 2006. With consumer online sales growing at a projected 14% compound annual growth rate (CAGR), the 4.5% of consumer transactions impacted equals $60 Billion that could be at risk through 2010. ("US eCommerce: 2005 to 2010", Forrester Research, Inc., September 2005).
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% 2006 vs. 62% 2005), customers are increasingly unwilling to tolerate lower levels of service online, with 85% of adults expecting service levels online to be the same as offline, compared to 82% in 2005.
Hundreds of 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. Collected examples include:
- Banking: "I have been repeatedly unsuccessful at redeeming [bank name] points. It goes into a loop that gets me nowhere. My inclination is to call customer service, redeem my points and cancel my card with them."
- Insurance: "[I] paid an insurance payment online through their website and it didn't go through. I ended up paying a late fee because of it."
- Shopping: "I had gotten all the way to the end of the transaction (name, address, item selection, shipping method chosen, credit card information provided) and had the website malfunction and lose all of the previously entered data. I was furious and went elsewhere to purchase the same thing. I have not been back since."
- Travel: "Buying airline tickets online - I went through the entire process and then got an error message. I didn't know if my credit card went through, whether I booked the flight. It was very annoying. I called customer service and also received bad service."
Transaction failures on a company's website create such a bad impression in the eyes of consumers that just one troublesome issue can cause irreparable harm to a company's brand. An astounding 91% 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. Since website security (26%) and ease of completing a transaction (22%) 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 website, with severe implications for the brand.
Among other revealing findings, the survey also showed that about one in three online consumers (32%) would abandon a transaction at a website and immediately turn to an online (27%) or offline (12%) competitor. When combined with those who would simply abandon the transaction entirely (7%) - not buying at all - the percentage rises to 40% of all online consumers.
This intolerance of failure is another indicator of the risks to brand and customer loyalty that poorly delivering ecommerce sites present. Many sites use rewards or frequent shopper or traveler programs to enhance customer loyalty, but errors undermine those efforts. This was 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%) as being important to them in choosing their online travel provider than frequent traveler loyalty and rewards programs (47%)3.
The top problems that would cause online consumers to immediately and permanently turn to a competitor's website are:
- Incorrect information or lack of adequate information on the website (41%);
- Inability to complete the transaction due to an endless loop (36%);
- Difficulty navigating the website (37%); and
- Being automatically kicked off the page (25%).
"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 360-degree visibility into the customer experience offered by Tealeaf 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."
Survey Methodology
Harris Interactive® fielded the annual Online Transactions survey on behalf of Tealeaf between August 29 and 31, 2006, among a nationwide sample of 2,790 U.S. adults 18 years of age or older. The previous Online Transactions survey was fielded by Harris Interactive on behalf of Tealeaf between October 18 and 20, 2005, among a nationwide sample of 2,062 U.S. adults 18 years of age or older.
The data for both surveys were weighted to be representative of the total U.S. adult online population on the basis of region, age within gender, education, household income, race/ethnicity, Internet usage (hours per week) and type of Internet connection.
In theory, with probability samples of these sizes, one can say with 95 percent certainty that the results for the overall samples of online adults have sampling errors of plus or minus 3 percentage points. Sampling error for the sub-samples of those who have conducted an online transaction in the past year (n= 2,508), those who have experienced problems when conducting an online transaction (n= 2,217), those who have conducted a shopping transaction (n= 2,116), those who have conducted a financial transaction (n= 1,785), those who have conducted a travel transaction (n= 1,769), those who have conducted an insurance transaction (n= 625), and those who have booked travel accommodations online in the past year (n= 1,206) is higher and varies. However that does not take other sources of error into account. These online surveys are not based on a probability sample and therefore no theoretical sampling error can be calculated.
About Harris Interactive
Harris Interactive is the 12th largest and fastest-growing market research firm in the world. The company provides research-driven insights and strategic advice to help its clients make more confident decisions which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. The company has built what could conceivably be the world's largest panel of survey respondents, the Harris Poll Online. Harris Interactive serves clients worldwide through its United States, Europe and Asia offices, its wholly-owned subsidiary Novatris in France and through a global network of independent market research firms. The service bureau, HISB, provides its market research industry clients with mixed-mode data collection, panel development services as well as syndicated and tracking research consultation. More information about Harris Interactive may be obtained at www.harrisinteractive.com.
To become a member of the Harris Poll Online, visit go.hpolsurveys.com/PR.
About Tealeaf
Tealeaf is the leading provider of online customer experience management solutions. Tealeaf's CX family of solutions provides unprecedented enterprise-wide visibility into every user's unique online interactions. This "360-degree view" of the online customer experience enables a clear and consistent understanding of the customer for Ebusiness, IT, customer service and legal and compliance executives and their organizations across a wide range of vertical industries including retail, banking, travel, insurance, telecommunications, pharmaceutical and transportation. Founded in 1999, Tealeaf is headquartered in San Francisco, California, and is privately-held. For more information, visit www.tealeaf.com.
1Throughout this release, the term "online consumers" refers to U.S. adults 18+ who have conducted an online transaction in the past year.
2Assumptions based on survey data: 88% of online consumers experience problems when conducting online transactions; online consumers who have conducted a shopping transaction in the past year shop online, on average, 4 times per month. Then: Online consumers average 48 transactions per year: 12 * 4 = 48. Meaning 12% of online consumers complete 48 transactions successfully without any issues: 1 – 0.88 = 0.12. A single transaction must have a success rate of 95.6% to complete all 48 successfully 12% of the time: 0.956 ^ 48 = 0.12. Therefore, a single transaction has a failure rate of 4.5%: 1 – 0.956 = 0.045. So, if a single transaction has a failure rate of 4.5%, then 4.5% of all transactions are impacted.
3The percentages cited reflect a net of the top two responses (important and very important) on the following four-point scale: not at all important, somewhat important, important, very important.
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