June 12, 2000
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Study Shows Low Customer Loyalty To E-Businesses
Dow Jones Newswires
WESTPORT, Conn. -- Customer loyalty to e-businesses is extremely low, according to a survey of 10,000 online consumers conducted by Digital Idea and Greenfield Online Inc.
In a press release Monday, Digital Idea said that on average, only 15% of online consumers were loyal to e-business sites that they had visited at least once in the past three months.
The company arrived at the percentage by dividing customers it defined as loyal by the total customers that responded to its survey about a given Web site.
According to a company spokesman, Digital Idea defined loyal consumers by applying an algorithm to their answers to questions about e-business Web sites. The questions include how unique respondents believe the Web site to be, as well as how likely they are to recommend the site to others, and four other topics. Digital Idea calls the rating system Dialscore.
The average cost of acquiring new e-commerce customers is about $250, according to Digital Idea. For online retailers of books, music and videos, whose customers only spent $56 over the past three months, according to the survey, that means retaining customers is crucial.
A few companies bucked the trend with customer-loyalty ratings of around 30%. Babycenter.com, a site that provides information about pregnancy and baby-related products, had the highest rating, at 35%. Edmunds.com, a site that provides information for car buyers, earned a rating of 31%. Amazon.com (AMZN) led the big name e-business companies with a rating of 28%.
The study found that search sites and portals scored lowest in customer loyalty, with Yahoo! Inc. (YHOO) leading the pack at 23%. IWon.com, at 20%, was a close second, and Ask Jeeves Inc. (ASKJ) was third, with 19%.
The initial Dialscore study collected data on 346 e-businesses across seven categories, including automotive, books/music/videos, finance, healthcare information, PCs/software/hardware, travel and search sites/portals. Digital Idea plans to publish detailed information about 112 of the businesses.
The company plans to publish quarterly both Web-based and CD-ROM reports for marketers.
It plans to cover consumer electronics, pharmaceutical/health products, toys, apparel, flowers, concert/theater/event tickets, cosmetics/personal care, pet products and sporting goods in a second wave of research.
Digital Idea is an e-business consulting firm.
Company Web site: digitalidea.com.
-Jason Overdorf; Dow Jones Newswires; 201-938-5400 |
