Incorporating Customer Market Research into Your E-Commerce Strategy

Jeff Skiles, Kirby Risk Electrical Supply

E-Biz Forum -- September 26, 2013

jskiles@kirbyrisk.com

Abstract

Establishing a successful web-based E-commerce solution requires significant understanding of how and why your customers will use this service. Unlike traditional interaction where our people can intelligently adapt and respond to unexpected customer requests, we must anticipate every need and prepare our responses in advance on a website or an app. This discussion will describe recent findings from several survey sources and offer suggestions for additional information gathering that will help you achieve the highest levels of service no matter how your customers choose to connect with you.

Data Sources

3 Recent Industry Surveys

• Independent Electrical Contractors (IEC)

• National Electrical Contractors Association (NECA)

• IDEA / AD / EMA • Bulletin board and web survey

Additional Sources

• The Effortless Experience

• United Stationers

http://www.naed.org/strategictechnology/

What Are Our Customers Looking For?

Importance & Status of Website Features (Page 1 of 2)

Importance & Status of Website Features (Page 2 of 2)

“We used to use catalogs and such but now with everything that is available online we usually just search that way. Occasionally I also call vendors for information

and pricing” LW

“… back orders would be nice to know about beforehand. That way you’re not waiting on something and have it not show – it makes you improvise on the fly. If we were emailed the back order list we’d be able to plan accordingly.” DF

“Comprehensive stock information on the website and if there is no part/gear in stock, when will it be filled or will it be filled or restocked. And if it is not going to be restocked please remove it from inventory so I can move on to a location that may have it.” DM

Do Customers Really Want To Use Our Web Sites?

United Stationers Report

• "Office Products Enthusiasm: Driving the Millennial Purchase”

• The report found that millennials have different buying behaviors than their predecessors, with 58 percent going online first (as opposed to a catalog or store) when shopping for an office product, 11 percentage points higher than the figure for baby boomers.

• This makes it increasingly important for companies to solidify their online presence, especially because millennials may be more likely to shop around than past generations. According to the report, only 56 percent of millennials were aware of their company’s preferred supplier, compared with 67 percent of baby boomers, so the results of online searches may increasingly be taking the place of company preferences when it comes to choosing a supplier.

Chapter 2: Why Your Customers Don’t Want to Talk to You

• 58% of callers first went to the web site. (p. 39)

• It’s not just younger people: the age where the web vs. phone preference crosses over is 51

The Effortless Experience (p. 37ff)

20%

40%

60%

80%

21 51 81

Web vs. Phone Preference

Background

• CEB conducted multiple detailed surveys, the foundational one being 97,000 customers with a recent service experience. (p. 8ff)

• They define loyalty in terms of three specific behaviors: (p.7)

• Repurchase (continue to buy from you)

• Share of wallet (buy more from you over time)

• Advocacy (say good things about you)

Conclusions

• “Customers really don’t care to be delighted by you as much as they want to just get on with their lives, so your job is to eliminate the obstacles that prevent your customers from being able to do just that.” (p. 34)

• “Customers who attempt to self-serve but are forced to pick up the phone are 10 percent more disloyal than customers who were able to resolve their issue in their channel of first choice.” (p. 39)

• “96% of customers who had high-effort experiences reported being disloyal, compared to only 9 percent of customers with low-effort experiences who reported being disloyal.” (p. 27)

“I love learning and love high-tech stuff. That being said, when the technology is simply a tool to help me get my job done, I want it to be easy to use and flexible.” DC

The Whole Book in One Sentence

• “The key to mitigating disloyalty is reducing customer effort.” (p. 24)

Recommendations

•At KR, we want our web store to provide customers with the same level of service they’d get from talking with one of our best inside salespeople. • Same results, same or less effort: right product, right

place, right time, right price • Predict what the customer needs. E.g. they ordered two

parts that don’t go together (possibly on different orders), or they ordered a system, but a component is missing.

•Recognize and accommodate the different ways customers want your site to work

From Effortless

Three drivers for “channel-switching” (p. 53ff)

I.e. The customer went to the web site first, then called support.

1. Couldn’t find the information they needed

2. Found the information but it was unclear

3. The customer was simply looking for a phone number

Issue: Couldn’t Find the Information They Needed Solution: “Customer Task-Based Guidance”

Issue: Found the information, but it was unclear Solution: Travelocity’s 5 Rules

1. Simplify the language

2. Eliminate null search results

3. Chunk related information (condensing related information and spacing it apart from other text)

4. Avoid jargon a. Lamp vs. Fixture

5. Use active voice a. “Manufacturers may vary in their policies in regard to product

returns.”

b. “Product return policies vary by manufacturer.”

Issue: The customer was simply looking for a phone number Solution: Highlight Self Service Options

• Prominent links to the most asked questions / options / services • Move the “Contact Us” link to the lower right corner

(perceived as ad space)

• Tailor the language to the customer • Provide support for Newbies, not just Gurus.

• Don’t hide your phone number!

Decision Simplicity (p. 203ff)

Spenner and Freeman, Harvard Business Review, “To Keep Your Customers, Keep it Simple”

• Make it easy for customers to navigate

• Provide information that is trustworthy

• Make it simple for customers to weigh options

Thank you!

jskiles@kirbyrisk.com

Extras

Over half of distributors offer punch-out integration (of those with order placement capabilities), but only 7% of customers report that their business system software supports punch-out integration.

The vast majority of distributors have EDI currently available, but only 17% of customers report that their business system software supports EDI, and another 42% are unaware of what capabilities are supported.

Slide Question Topic Distributor finding (NAED) n=50 Consistent with our findings? Customer finding (IEC & NECA) n=317 Consistent with our findings?

7 Customer web access 62% believe less than 35% of customers access website, 29% don't measure

yes (we found that 65% believed that less than 35% of customers were accessing monthly)

67% visit monthly or more often yes (we found that 70% visit monthly)

9 Customer ordering on website

59% believe less than 5% of customers order online (of those with order placement capability - percentages out of all distributors is very close 34% NECA vs. 38% us)

yes, but a lower magnitude (we found that 89% believe that less than 5% order online, again of those with order placement)

18% make routine purchases on distributor website and 26% place job orders

yes, but a lower magnitude (we found that 42% make routine purchases and 34% place job orders) - This could be due to the fact that the other survey allowed/recorded only single response and we allowed multiple, also that we only have data for IEC (n=74) since NECA recorded responses differently which does not allow for distributor site information to be called out

10 Importance and status of website features

60% have basic search available today, 48% have advanced search available today, 52% have customer specific pricing available today

yes (their results are slightly higher, we found that 52% had basic search available today, 36% advanced search available today, and 41% customer specific pricing available today)

62% search by description high/critical priority, 57% current price high/critical prioity

yes - search by description is lower (we found 74% high/critical priority), as is current pricing (we found 71%). The gaps demonstrated in our research are larger than in the other research.

11 Importance and status of website features

48% have product information available today, 42% have customized online catalog search results avaialble today.

Somewhat (online catalog results is quite a bit more than for ours - we found 27% available today, but product info is very close - we found 43% available today)

66% product specs high/critical priority, 47% MSDS high/critical priority, 55% online catalog high/critical priority

yes for product specs (we found 69% high/critical for product spec sheets and 31% for MSDS), yes for online catalog, though lower magnitude for the gap (we found 60% high/critical priority)

12 Mobi website and apps for distributors and distributor website preference for mobile searching among customers

20% mobi website available today, 24% apps available today

yes (they found slightly more mobi websites in place we had 14%, apps are consistent)

7% use distributor's website when searching no, but the other survey only allowed single response and we allowed multiple which may have impacted their results

14 Punch out integration 34% have functionality (of those with order placement capability)

no (although of all distributors it is more consistent - they found 20% and we found 25%)

Question not asked - no data for this

15 EDI 82% available today yes (we found 86% available today) Question not asked - no data for this

Survey Comparison

20%

25%

11%

16%

27%

29%

34%

43%

5%

16%

11%

25%

24%

16%

14%

21%

36%

4%

9%

13%

20%

21%

24%

21%

23%

20%

16%

95%

84%

52%

45%

43%

36%

36%

34%

25%

5%

Company contact information and locations

Links to manufacturers' websites

Basic search (Search by: Product category, Manufacturer/Brandname, Manufacturer's part numbers, etc.)

Quote capability

Product Information (Technical information/specification sheets,Material safety data sheets (MSDS), etc.)

Advanced search (Search by: Product description, Customer's partnumbers, etc.)

Current stock levels

Links to Business/Social media (Blogs, Facebook, Google+,LinkedIn, Twitter, YouTube, Reddit, etc.)

Online help options (Frequently asked questions (FAQs), Live chatcapability, etc.)

Purchase suggestions similar to Amazon.com (Items others haveordered with this product, accessories, etc.)

No current plans 12-18 month plans Actively investigating Available today

Status on Website Functionalities

23%

21%

30%

25%

29%

25%

38%

32%

34%

43%

11%

16%

16%

13%

11%

12%

14%

21%

25%

16%

16%

18%

11%

21%

21%

27%

13%

20%

20%

21%

50%

45%

43%

41%

39%

36%

36%

27%

21%

20%

Login capability

Order placement capability

Personal product lists

Search results provide customer specific pricing across thewebsite if the customer is "Logged In"

Basic account management (Order tracking, Transaction historyby user/by item, Order, etc.)

Linked to business management software/ERP for real timeresults

Advanced account management (Multiple login ID's linked to"Master" customer account, Master account management,…

Customized online product catalog search results

Online payment capability (Credit/Debit card, PayPal, On account,etc.)

Sales tax estimates and shipping cost estimates

No current plans 12-18 month plans Actively investigating Available today

Status on eCommerce Functionalities