Poor website performance costing millions
While the transactional website is increasingly finding its way into the marketer's arsenal for growing reach and revenues by making it easier and more cost-effective to deliver products and services to customers, a survey of European retailers and financial services companies has found these sites are costing their initiators millions.
The research, commissioned by Compuware, the Nasdaq-listed software and services company, reveals that almost one quarter of respondents - 23% - estimate their annual losses resulting from their poorly performing transactional website at around R21 million . Another third put their losses at some R5 250 000 per year while 21% say they were losing around R15 750 000.
"While there are no figures for South African companies which conduct business over the Internet, there is no reason to believe that the situation here is any better. Indeed, it is probably worse given the generally poorer performance of local sites as a result of bandwidth issues," says Richard Hepplestone, application performance management consultant at Compuware South Africa.
Transactional sites have become an essential element of any organisations business, much like shop fronts, and it is therefore important that they manage the experience that each user has of the site.
Consumers, however, have confirmed that they find the mismanagement of websites highly frustrating, with 72% stating that if a website performs badly, they are unlikely to make a transaction. In addition 68% say that if website performance does not match their expectations, they will use an alternative site to make the purchase. Only 43% of customers questioned said that if they logged onto a site and it performed poorly, they would re-visit it.
'Walking out' is a lot easier
"It's like having your customer walk out of your store and head for a competitor because of poor service. Only, 'walking out' of a website is a lot easier and more convenient. So while delivering a good customer experience is essential in bricks and mortar establishments, it is considerably more important with transactional websites," he continues.
While the research reveals that the 200 retail and financial organisations surveyed believe that they had the necessary procedures in place to safeguard user experience, the reality is that they don't.
Half the respondents claim to monitor and manage the performance of their transactional website - yet just 6% have specific information about the actual end user experience for each individual logging on. In fact, 61% of companies have no idea if, and when, a client drops off a page or how many times they might click the refresh button in a particular section.
"Of the 200 IT directors surveyed, 51% of organisations only monitor the load on the web server to ensure that peaks in demand do not bring the site down. This approach does not enable organisations to measure and evaluate real end-user experience. Companies may consider themselves to be on top of managing the end user experience of their transactional web sites, but as the research highlights, this belief is misplaced. The measurements that they are currently using are ineffective and unrepresentative," Hepplestone explains.
"Not surprisingly, retail organisations are struggling, with many having to close flagship stores, while financial institutions are fighting to differentiate themselves in a highly competitive market. For companies operating in both of these sectors this is not an ideal situation. They want to be making money from their e-commerce investment and using it to further competitive advantage.
Big knowledge gap
"The consumer responses clearly demonstrate that there is a big knowledge gap between what businesses think they know and what they actually know. The Internet is a free market and the bottom line is that if your site is performing badly, there will be a company with a similar product who has a site meeting the performance expectations of users.
"If a customer complained, presently just 6% of European retailers and financial organisations would be able to take proactive steps to resolve individual user performance issues. Organisations need to become more customer-centric in their approach to service delivery management. If companies want to start making money from their transactional websites, instead of losing it, they need to be able to pinpoint problems, be in a position to solve them quickly and proactively manage their online service."