May 17, 2004
Online experience overtaking physical factors in consumer perceptions of banks
finextra news: Online experience overtaking physical factors in consumer perceptions of banks
12 May 2004 - Online banking and bill payment services are overtaking traditional factors such as physical location in consumer selection and perception of banks according to US market research by Vividence.
The latest Vividence Customer Experience (CE) rankings for the online banking industry found that Bank of America and its lesser-known rival National City provided the best overall online experience to prospects, with a statistical tie for the top spot in the rankings. Chase and Fleet prospects were the least satisfied with their online experience.
For the study, Vividence monitored 2000 prospective customers as they interacted with ten leading banking Web sites.
Close to 50% of consumers in the study said online banking and bill payment services are a very important factor in choosing a bank, while the importance of physical location and ATMs continues to recede (42% stating it as a factor compared to 47% in previous studies).
Despite the importance of the Internet experience, consumers are frustrated with the inadequate instructions and support provided for most online bank applications. One-quarter of all prospects that chose to start the application process did not complete it - "an abysmal record as compared to the completion rate of online applications and registrations in other industries," says Vividence.
Web sites that provide information upfront regarding the length of the application process and information requirements have the highest completion rates. National City, which clearly delineates the requirements upfront, has the most user-friendly application process according to the study, while Washington Mutual has the lowest completion rate.
Consumers voiced other frustrations with bank Web sites, with the average user experiencing a problem every three and a half minutes. Approximately one-in-three (31%) prospects complained that they could not locate customer service options on the site they were visiting and one-in-five (21%) expressed concerns about privacy and security issues.
With ever-present links to its 'Help Centre' and strong FAQs, Wachovia was ranked as providing the best access to customer support, whereas Bank One and Fleet were seen as offering poor service as illustrated by their failure to provide a customer support link on their homepage.
Prospects also reacted poorly to sites that used highly technical or legal language in their privacy statements. Bank of America, Wells Fargo and Chase were the sites most prospects felt managed privacy and security issues the best.
The initial online experience at a particular bank site has a significant influence on the likelihood that a prospect will sign up for additional online services, says Vividence.
Less than half of Wachovia prospects indicated they would also use online bill pay services according to the study, whereas close to 80% of Bank of America prospects indicated they would use such services. The study found that Bank of America benefits from an accessible online bill pay demonstration and clear, persistent messaging about its online bill pay services.
The research indicates that the consumer experience online has a direct effect on brand perception and loyalty. In this latest study, National City received the greatest improvement in its brand perception with just five per cent of prospects reporting a highly favourable opinion of the bank prior to their online experience and 57% doing so after experiencing its Web site.
May 17, 2004 at 05:26 PM in Loyalty, Web lifestyle | Permalink | TrackBack (64) | Top of page | Blog Home
February 21, 2004
Perceptions of Trust
By Robyn Greenspan | February 13, 2004
Just over half of surveyed consumers discontinued doing business with a company because they were uncomfortable with their privacy protection, a report from Accenture found. The November 2003 survey of 570 individuals that mixed business marketing executives, privacy officers and customer relationship management executives with consumer respondents revealed that each group often has a different perception of privacy policies and trust issues.
The disparity is evident as 80 percent of the business respondents awarded their companies a 4 or 5 rating on a scale of 1 to 5 (where 5 is the highest) in terms of their ability to generate trust with customers, while 81 percent of the customer respondents chose a 3 or 4 rating.
Nearly one-quarter of business respondents indicated that their company primarily published their privacy policy because it was the ethical thing to do and it made them good corporate citizens, while only a mere 3 percent of consumer respondents believed that to be the reason. The largest portion of consumer participants — 45 percent — stated that companies published their privacy policies because it was required by law, and one-quarter thought it was done to minimize legal risk. Only 13 percent of the business responses cited an effort to build trust with customers, compared to 16 percent of consumers.
The survey found that privacy policies actually have little impact on whether consumers trust companies, and most were influenced by company or product reputation. Businesses believed that good customer service was the most influential factor.
| Factors most influencing consumer trust with a company | ||
|---|---|---|
| Business Respondents | Consumer Respondents | |
| Positive customer service experience | 43% | 26% |
| Length of relationship with company | 27% | 29% |
| Company or product reputation | 23% | 33% |
| Brand familiarity | 6% | 3% |
| Privacy policies | 1% | 9% |
| Source: Accenture | ||
Accenture's Chief Scientist, Glover Ferguson, commented on the survey findings: "The study revealed no single reason that would compel consumers to immediately cancel their business with a company. However, the study did reveal two characteristics — brand impression and length of relationship — that fortify trust. Indeed, nearly two thirds of the respondents said that trust most frequently stems from those characteristics. Accordingly, it would seem that trust is not something that comes easily or quickly. It needs to be earned over time."
Corporations often have unrealistic views of what damages trust. When survey participants were asked about the biggest impediments to establishing corporate trust, the majority of the business respondents thought consumers were wary of security, when, in fact, most of the consumers blamed aggressive marketing tactics.
| What Damages Trust? | ||
|---|---|---|
| Business Respondents | Consumer Respondents | |
| Online security fears | 74% | 49% |
| Overly aggressive marketing, Especially telemarketing | 67% | 76% |
| Company reputation has been damaged by a past incident | 60% | 44% |
| Generally suspicious of corporations | 52% | 28% |
| An incident at a similar company has damaged industry's reputation | 52% | 19% |
| Disapprove of the company's business practices | 43% | 37% |
| Source: Accenture | ||
February 21, 2004 at 11:36 AM in Loyalty | Permalink | TrackBack (1) | Top of page | Blog Home
E-tailers Earn High Satisfaction Scores
E-tailers Earn High Satisfaction Scores
By Robyn Greenspan | February 20, 2004
E-tailers are becoming the online success model, according to the annual American Customer Satisfaction Index (ACSI) report, which is produced by the University of Michigan in partnership with the American Society for Quality and the CFI Group, along with ForeSee Results, and Market Strategies Inc.
Using a 100-point scale that quantifies customer satisfaction, the report found that e-commerce continues to rate higher than other industries, while also outpacing the national average of all the measured groups. The e-commerce aggregate for the fourth quarter of 2003 was 80.8 — 4.1 percent higher than Q4 2002. The national aggregate was indexed at 74, trailing behind the financial/insurance aggregate (74.7), and the retail aggregate (75).
The ACSI included e-retail, e-brokerage, auctions/reverse auctions, and e-travel in the e-commerce category, finding that online retailers scored considerably higher than their counterparts. E-brokerage, which scored the lowest index in the category, exhibited the most improvement from 2002 to 2003.
Larry Freed, president and CEO of ForeSee Results, said that it was noteworthy that online brokerages didn't score better, considering their reasonable degree of innovation and the pure convenience of their services. "This is a case in which companies have not quite figured out how to understand and deliver on customer expectations. Adding features and functions only matter if and when these are things that customers care about and contribute to creating the total experience they want and expect."
| ACSI E-Commerce Scores by Category | |||||
|---|---|---|---|---|---|
| 2000 | 2001 | 2002 | 2003 | Change | |
| E-Retail | 78 | 77 | 83 | 84 | 1.2% |
| E-Brokerage | 72 | 69 | 73 | 76 | 4.1% |
| Auctions/Reverse Auctions | 72 | 74 | 77 | 78 | 1.3% |
| E-Travel | NA | NA | 77 | 77 | 0% |
| Source: American Customer Satisfaction Index (ACSI) | |||||
"In the latest ACSI findings, expectations continued to climb but at a somewhat slower pace than in previous years so a shifting focus of demands may emerge as an equal or greater challenge than purely rising expectations; continually addressing the total experience becomes the imperative. E-commerce companies have generally been good at rounding out the customer experience so that as one aspect of the experience meets expectations they move on to the next thing. Of course it isn't simply sequential, and e-commerce companies, like any company, must keep a lot of balls in the air," said Freed.
E-Retail
Amazon.com's 88 earned the company the highest rank among the e-tailers included in the category, however, their score remains unchanged from 2002 and 2003. Barnesandnoble.com dropped 1.1 percent, from 87 in 2002 to 86 in 2003; 1-800-flowers.com's rating decreased by 2.6 percent to 76; and Buy.com maintained a score of 80 for both 2003 and 2003.
E-commerce's success isn't likely to create unmet expectations, according to Freed, and the industry's ability to stay on top of customer demands is likely to continue. "Meeting high expectations profitably also means knowing the degree of impact and the point of diminishing returns. What's remarkable about some of the best performers is their ability to stay a step ahead of expectations and set the right investment priorities."
E-Brokerage
Online brokerages earned an aggregate score of 76, a marked 4.1 percent improvement over 2002, with the Charles Schwab Corporation scoring 75, and E*Trade Financial scoring 71.
"The brokerages have some work to do in this regard, though, to be fair, Schwab performs above the national weighted average of all companies/industries measured by the ACSI though well below the average of the e-commerce category," commented Freed.
Auctions/Reverse Auctions
eBay outscored uBid, Inc. and Priceline.com, with an index of 84, compared to 73 and 71, respectively. uBid gained 4.3 percent over the year, while Priceline.com remained flat. eBay has maintained the lead in the category since 2000.
E-Travel
The three big travel sites — Expedia, Orbitz, and Travelocity — all hovered in the 76 to 78 range, with Expedia losing 2.5 percent over the year. "It's also interesting, though maybe not surprising, that all of the major travel sites score roughly equally; consumers don't make much distinction among the sites," said Freed.
Freed suggests that companies identify the things that customers care about the most, and address those things, and he identifies search as an issue where companies could focus their efforts.
"As other aspects of e-commerce have improved, many companies find that customers are happy with most features and functions and that makes weak search engines stand out as a problem more to customers than might have been the case when expectations, in general, were lower. The trick is to identify and act on the right things; staying on top of expectations is difficult for those who rely too much on guesswork and trial and error."
February 21, 2004 at 11:23 AM in Loyalty | Permalink | TrackBack (22) | Top of page | Blog Home
January 08, 2004
Overview: Information Warfare Issues
The dark side of information technology; how it can be used to manipulate opinions, and even war, just adds to the importance of getting the right balance of openness and security features so that such activities don't turn into factors which interfere with the reputation of online systems.
Information warfare is emerging as a potent new element of strategy. “Info War” is not the same as intelligence operations, although it is clearly related to intelligence. As it is emerging in Defense Department thinking, information warfare is an attack on an adversary’s entire information, command and control, and, indeed, decision-making system.
As Air Force Plans puts it: information warfare is “any action to deny, exploit, corrupt, or destroy the enemy’s information and its functions; protecting ourselves against the actions; and exploiting our own information operations.” Information warfare is directed at shrinking or interfering with the enemy’s Observe, Orient, Decide, Act (OODA) loop while expanding and improving our own. Strategists now speak of information as a “strategic asset,” and planners describe the objective of information war as “information dominance.”
Dr George Stein places emerging thinking on information warfare into the context of the Tofflers wave theory: “As first wave wars were fought over land, and `second wave’ wars were fought over physical resources and productive capacity, the emerging `third wave’ wars will be for the access to and control of knowledge.” Related to information war are “net war” and “cyberwar.” Net war is information war waged largely through communications systems. The 1991 Gulf War exhibited it via the Coalition’s attack on the whole spectrum of Saddam Hussein’s information, propaganda, command and control, etc.
But it is to the realm of “info propaganda” where Dr Stein calls our particular attention—the emergence of techniques “combining live actors with computer generated video graphics,” and “fictive simulators,” and other information manipulation which creates “virtual realties” that could seriously threaten a state’s control. Cyberwar is the operational extension of information war and net war—the tactical disruption, then domination, and perhaps even the reordering, of an enemy’s decision-cycle. However, Stein cautions that whether cyberwar can actually “shape” the battlefield, or merely generate chaos remains to be seen.
All this has obvious implications for command and control warfare against an adversary. Governments which rely for their legitimacy on insulating their societies from reality look particularly vulnerable to information war. Sound strategy, then, employs info war as an offensive element of operations, designed to disrupt or end an adversary’s communications and decision making. Stein cautions, however, that democratic societies may be particularly vulnerable to attack by adversaries using information war, especially its components net war and cyberwar. Their communications infrastructure is wide open to attack for their “domestic computer, communications, and information networks . . . are very vulnerable to penetration, manipulation, or even destruction by determined hackers.”
The essay by Col McLendon is built around a critique of the historical evolution of information war. He uses the allied deception and crypt analysis during WWII, and the impact of information technology during the Gulf War, to illustrate the quantum leap from propaganda and disinformation during WWII to the systematic application of information warfare in the post-Cold War age.
The use of allied “Ultra” intercepts of Nazi war plans and operations was critical to allied success. Indeed, Ultra intercepts, which were never compromised, “provided the bulk of intelligence to the Allies during the war.” As Supreme Court Justice Lewis Powell, who had worked with Ultra during WWII prior to launching his legal career, stated, “In no other war have commanding generals had the quality and extent of intelligence provided by Ultra.” Ultra gave the British advance warning of the German attack on England and of U-boat operations against Atlantic convoys. Indeed, Churchill had to make numerous painful decisions not to defend Allied assets he knew were going to be attacked for fear of alerting the Germans to Allied prior knowledge of their plans. An example was the Luftwaffe raid on Coventry.
The Gulf War brought the use of information deception and information war to its zenith. US Army units used the NAVSTAR GPS at the tactical level to locate Iraqi units even in the midst of desert sand storms. GPS, writes McClendon, “was the capability that made possible the [Allies] `left hook’ used to defeat Saddam Hussein’s armored divisions.” The sheer information overload attendant to Coalition operations was mind boggling: 700,000 phone calls and 150,000 messages per day; successful deconfliction of over 35,000 different communications frequencies; AWACS aircraft controlling 2,240 air sorties per day—more than 90,000 during the war with no midair collisions.
The Gulf War experience has spurred recognition within the US Defense Department that an ability to achieve “information dominance” could represent a new era in strategy formulation. “Global dominance,” writes former Vice Chairman of the JCS, Adm David E. Jeremiah, “will be achieved by those that most clearly understand the role of information and the power of knowledge that flows from it.
January 8, 2004 at 08:18 AM in Internet evolution, Loyalty | Permalink | Top of page | Blog Home
