FOCAL POINT

Study reveals growing importance of real time customer service for online shoppers

by Kevin Kohn

Why do people go online? How do they use the Internet? What makes — or prevents them — from buying online?

These are questions that we at LivePerson are keenly interested in as well. So at the end of last year we engaged the research firm, Northstar Research Partners to help us get into the hearts and minds of online consumers. We particularly wanted a better understanding of the attitudes, intentions and reactions of consumers as they surfed and shopped online.

Northstar interviewed 659 people who’d bought products or services online within the past year, and intended to purchase again in the near future. The interviews, conducted in December 2005 and January 2006, found that of the 20 hours these users spend online for personal use each week, 17% of that time was dedicated to researching and comparing products. And they spend on average $1,120 per year online.

In an effort to help you drive value through your online channel, LivePerson is please to share the findings with you. Here’s some of what we’ve learned:

1. Real-time customer service provided through Live Chat is a compelling draw for shoppers, particularly the highly sought after “power” shoppers
2. Online consumers are active shoppers, repeatedly visiting sites before making a purchase
3. Shopping cart abandonment occurs for many reasons, only some of which can be influenced by the retailer.

Let’s look at these findings in greater depth.

 

Customer service joins product selection & price as a key driver of site visits

Not surprisingly, price is still a primary driver (54% rate it 8-10 on a 10 point scale), but customer service was not far behind (42% gave it the same high mark), and it’s nearly as likely to drive site visits as product selection (45%).

Live Chat is the most satisfying method for receiving customer service

More people feel highly satisfied after receiving customer service via Live Chat (46% rate it a 9–10 on a 10 point scale) than any other form of customer service, including toll free number (41%), e-mail support (31%), and online FAQs (24%)

Live Chat is an important differentiator among high value customers

Customers who spend above the annual average of $1,120 online are more likely to have used Live Chat (22% vs. 14%). More importantly, 67% of those users said they’re more inclined to visit sites that offer Live Chat.

Live Chat has broad appeal to online shoppers

62% indicated a favorable likelihood of using Live Chat if it were made available to them.

A fundamental shift in consumer expectations

This research points to rising consumer expectations with regards to online customer service. Where it was once considered a “nice to have,” today’s online consumers expect it, and actually seek it out.

“The online channel is growing in significance,” said Robert LoCascio, CEO of LivePerson, Inc. “That means retailers must provide a higher level of customer service and responsiveness to visitors. And those that do will earn the loyalty of their visitors.”

The active shopping behaviors revealed in our study compel us to rethink the way we interpret online interactions.

According to our research, online shoppers average eight site interactions before making a purchase (four visits to the site they’ll ultimately purchase from, and four to alternative sites).

This creates an opportunity for online retailers to develop appropriate engagement strategies based on where the visitor is in the buying process. The key is to engage first time visitors differently from those who’ve reviewed a particular product or service on multiple occasions. This is particularly important when marketing high value or complex products such as computers, and financial instruments, home equity loans and the like.

Online shoppers use shopping carts for a variety of reasons…very often having little to do with the online retailer’s expectations

Our findings suggest that in many cases, items are placed in a shopping cart with no real intention to purchase. Shoppers may place it there as part of a price comparison exercise, to establish a final price, or to have it in a convenient place for future referral.

This behavior is counter to the online retailer paradigm that assumes a product in a shopping cart equals an intended purchase.

“What this tells of us about online consumer behavior is that, regardless of how online retailers intend consumers to use shopping carts, it’s ultimately the consumer who writes the rulebook, not the other way around,” said Mr. LoCascio.

 

Look for more in-depth analysis in coming issues of LiveLounge on LiveConnect.

 

The research was conducted by Northstar Research Partners. The company conducted 659 online interviews across the US from December, 2005 to January, 2006. The results, based on this sample of 659 surveys, are accurate within a tolerance of +/-3.8%, 19 times out of 20. The survey follows on the heels of an intensive qualitative research study employing ethnographic interviews across the country.