Sites Fail on Customer Follow-Up, Lose Sticky Appeal
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A recently released study of 50 leading e-commerce sites points to dramatic but preventable losses suffered by e-tailers because they neglect to follow-up with consumers after a purchase is completed.
E-commerce applications provider Rubic Inc. found that just 16 percent of the e-comm sites evaluated sent follow-up marketing offers to customers who purchased from their site in the last 30 days. Of those, only two were personalized. Rubic said 47 percent of the survey sites failed to ask customers if they wanted additional information about related products and services.
The study, "Evaluating the 'Sticky' Factor of E-Commerce Sites," concluded that e-commerce sites need to make drastic improvements in e-marketing capabilities and customer communication in order to achieve profitability via customer loyalty.
"As acquiring a new customer is a much more expensive proposition than retaining an existing one, it is surprising that so few sites are cross-selling, up-selling, and reselling to their own customers," said Anu Shukla, Rubric CEO.
The survey found that a mere 4 percent of the e-comm sites used personalization in their follow-up marketing campaigns, despite the Internet being an interactive and personalized medium. In addition, the study said that less than half of the customers who received a follow-up offer rated it as appealing based on products they had purchased recently.
The survey also noted that repeat buyers said they did not receive special attention. Only 25 percent of the sites studied recognized customers as repeat buyers when they responded to follow-up offers and less than 5 percent of the sites allowed customers to request reminders for when it was time to buy again.
"E-commerce sites are racing to convert browsers into buyers and ad hoc purchasers into loyal customers," said Hal Steger, Rubric vice president of Marketing. "This study demonstrates that there is a large need for e-marketing systems that make it easy to proactively communicate with customers in an ongoing and personalized dialogue."
Loss of repeat customers is also attributable to e-tailers who don't respond to e-mail queries, asking about products features, and 'which model should I buy?' A whopping 40 percent of e-mail questions went unanswered, including sites which promised replies within two days. One site left a voicemail saying an answer was coming electronically, but one never arrived. Another 43 percent of the sites did not provide customers with Web-based self-service capabilities to check on the status of their orders.
"The results of our study provide clear evidence as to why many e-commerce sites turn over 60 percent of their customers every six weeks. Many are competing mainly on price and are not building customer loyalty, which is a recipe for unprofitability," Shukla said.