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International Journal of Service
Industry Management,
Vol. 13 No. 5, 2002, pp. 432-451.
# MCB UP Limited, 0956-4233
DOI 10.1108/09564230210447922
E-CRM Web service attributes
as determinants of customer
satisfaction with retail
Web sites
Richard Feinberg and Rajesh Kadam
Purdue University, West Lafayette, Indiana, USA
Keywords E-commerce, Internet, Customer satisfaction, Service quality
Abstract Business is moving online, not as a matter of choice, but as a matter of necessity. The
use of the Internet as a channel for commerce and information presents an opportunity for
business to use the Internet as a tool for customer relationship management (CRM)/(e-CRM).
Despite widespread agreement that CRM/e-CRM has direct and/or indirect impact on customer
satisfaction, sales, profit, and loyalty, the significance of e-CRM and the various e-CRM features
in influencing customer satisfaction has not been well researched. This study attempted to
uncover relationships between e-CRM and customer satisfaction by determining the presence of
e-CRM features on retail Web sites for which we have customer satisfaction data, and
determining if the amount of e-CRM is related to customer satisfaction or which, if any, of the
various features of e-CRM are related to customer satisfaction. It was found that retailers differ
in the presence of the 42 different e-CRM features; that there is a positive relationship between
the amount of e-CRM on a Web site and customer satisfaction with the Web site; and that not all
e-CRM attributes are equal – some are related to satisfaction and some are not. There was no
relationship between the level of e-CRM on a retail Web site and sales and profit.
Introduction
Customer relationship management (CRM) is a comprehensive business and
marketing strategy that integrates technology, process, and all business
activities around the customer (Anton, 1996; Anton and Hoeck, 2002).
It is mostly defined in terms of the acquisition and retention of customers and the
resulting profitability (Menconi, 2000; Nykamp, 2001).
Effective CRM is assumed to lead to bottom-line benefits for the organization (Anton and
Hoeck,
2002; Connelly and Yoger, 2001; Cusack, 1998; Rust and Zahorik, 1993; Swift,
2001; Tschohl, 2001).
According to Bain and Company, profits increase by 25-80 percent when customer
retention rates increase by five points.
The Internethas provided a platform to deliver CRM functions on the Web (e-CRM), thus
as business moves to the Web, e-CRM will move to center stage.
Despite widespread agreement that CRM and e-CRM has direct and indirect
impact on customer satisfaction, sales, profit, and loyalty (Anton and Hoeck,
2002; Connelly and Yoger, 2001; Cusack, 1998; Rust and Zahorik, 1993; Sterne,
1996; Swift, 2001; Tschohl, 2001) the significance of e-CRM and the various
e-CRM features in influencing customer satisfaction has not been well
researched.
This study attempted to uncover relationships between e-CRM and
customer satisfaction by determining the presence of e-CRM features on retail
The current is sue and full text archive of this journal is available
At http://www.emeraldinsight.com/0956-4233.htm Customer satisfaction
with retail Web sites
433
Web sites for which we have customer satisfaction data and determining if a
company’s amount of e-CRM is related to customer satisfaction or which, if
any of the various features of e-CRM are related to customer satisfaction.
Determination of those e-CRM factors that are related to customer satisfaction
will allow companies to focus on developing on their Web site only those
aspects of e-CRM that are related to customer satisfaction. This could mean
reduced costs, since elements that are not relevant need not be included
anymore in the e-CRM implementation. This also means (potentially) more
customers, more sales, more profit, and more loyalty, as resources are focused
on those aspects of e-CRM that work.
CRM is a dominant point of discussion in business (in July 2002,
Amazon.com listed 90 current books on CRM). Most/many companies have or
will attempt a CRM implementation . . . at considerable cost (it is estimated that
45 percent of all companies have CRM applications and 37 percent have
applications in implementation and planning stages (Leon, 2001)). According to
a survey conducted by Infoworld, 77 percent of the business respondents
considered CRM critical (Apicella, 2001). The CRM industry is believed to be a
ten billion dollar industry growing at a 27 percent annual rate (iBiz STATs,
2001).
There is little empirical evidence that CRM is related to profit, sales, or
customer satisfaction (for some of the available evidence, see Rust and Zahorik,
1993; Swift, 2001). Vendors abound with sophisticated and expensive
technologies delivering (or promising to deliver) customer relationships
(e.g. Siebel (www.siebel.com); Covergys (www.convergys.com); Genesys
(www.genesyslab.com); and literally hundreds of others). These systems have a
lot of technical attributes/functions that have come to define CRM but,
interestingly, they do not have an emphasis on customer satisfaction
measurement that must be at the core of any CRM implementation.
According to Forrester Research, only about 40 percent of CRM
implementations are successful (see also Feinberg and Trotter (2001) who
predict that there are even higher failure levels). Although it may be
universally believed that e-CRM and CRM applications are crucial, it is, at the
same time, clear that not everyone is successful in implementing CRM or even
if CRM is related to customer satisfaction or sales/profit. These points sharply
etch the need to better understand if CRM is related to customer satisfaction,
sales/profit and, which, if any, aspects of e-CRM (for the specific purposes
in this study of retail Web sites) are important to these variables. By
understanding what part, or parts, of CRM/e-CRM create satisfaction,
management of the e-CRM function becomes more efficient and more effective.
E-CRM in the retail industry
The retail industry appears to be a logical place to examine the relationship
between e-CRM and customer satisfaction (GoÂmez, 2001). Retailers are at the
front end of the supply chain and consequently are the ``interface’’ from which
consumersmake their purchases. This suggests that the retail industry is likely
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to be ahead of other industries in understanding CRM. We know that 100
percent of the top retailers have retail Web sites with at least some e-CRM
features (Feinberg et al., 2002, in press).
Retailing is also at the forefront of e-commerce. According to the US Census
Bureau, e-retail sales in 2000 amounted to $32.6 billion, up 19.3 percent from
2000.While online sales accounted for only 1.2 percent of all retail transactions
in 2001 (Ewalt, 2002), it is clear that e-retailing will continue to grow and
become a more significant portion of retail sales than it currently is. The use of
retail Web sites by consumers for purchase and information gathering
(unpublished research at the Center for Customer Driven Quality indicated that
consumers are actually more likely to use the Internet as an information search
tool and then go to stores to purchase, then make a purchase itself) suggests
that these Web sites will be the essential e-CRM tool (not just an essential tool)
for all retailers (Internet only, multi-channel, store only) in the future.
This study improves on prior research in three ways after the fact that there
is very little empirical work on e-CRM in the first place. First, we study the
relationship between e-CRM features and customer satisfaction, using a sample
of real retail Web sites and actual customer satisfaction data from consumers
who have purchased from those sites. Past research makes assumptions about
what is important to the consumer, asks consumers if that factor is important,
and then when 1 or 3 (or whatever number) of those factors are statistically
significant statements are made about the importance of the factor (e.g.
Szymanski and Hise, 2000; Yoo and Donthu, 2001). Instead of using a small
selected sample of fake or constructed retail Web sites the e-CRM attributes are
coded from a large set of real retailWeb sites. Having this ``real’’ set of retailers
allows us to find a set of them for which sales and profit data exist so that in
addition to looking at the relationship between e-CRM and satisfaction we can
look at e-CRM and profits/sales. Finally, in past studies the dependent
variables were perceived satisfaction with a Web site. In contrast, the
satisfaction data used in this study is obtained from Nielsen/NetRatings
obtained from a national panel of online users of those sites.
In this study, we take customer satisfaction data from a large set of ``real’’
Internet retailers coded for a large set of e-CRM attributes and do the following:
Describe the state of e-CRM in retailing. What factors represent what
retailers are doing on the Web?
Assess the degree to which e-CRM (in total) is related to satisfaction.
Assess the degree to which any one of the sets of e-CRM attributes are
related to satisfaction.
Assess the degree to which e-CRM is related to sales and/or profit.
Identification of a census of e-CRM attributes
The present study uses 25 features first identified by Anton and Postmus
(1999) as defining e-CRM with an additional 17 features defined by Feinberg
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et al. (2002, in press) in their analysis and study of e-CRM in retailing. Table I
shows the complete list of features.
The features are described below:
Site customization. The Internet brings enormous amounts of
information to the desktop.While this is an advantage, it can also be an
enormous disadvantage, since the user may not be able to readily access
the information he needs. Therefore, sites offer customization features
allowing the user to filter the content they see. Thus, if the user, on the
first visit, customizes the site to suit his tastes and preferences, he
will see the customized content on subsequent visits. (Example:
www.yahoo.com; www.my.yahoo.com)
Alternative channels. These are the different ways to contact the
company. For instance: e-mail, fax, toll-free numbers, postal address,
call-back button, voice over IP and bulletin board. Traditionally, only
toll-free numbers and postal addresses could be used by customers to
reach the company. However, over the past few years, e-mail has
emerged as an important tool for company-customer communication.
According to the Mailbox Report from United Messaging, the total
Table I.
List of e-CRM features
E-CRM features
% of companies
with feature E-CRM features
% of
companies
with feature
1. Complaining ability 99 22. 1-800 75
2. Privacy policy 99 23. Track order status 74
3. Product Information online 98 24. External links 66
4. Product highlights 97 25. Member benefits 66
5. Preview product 97 26. Spare parts ordering 66
6. Site map 96 27. On sale area 65
7. E-mail 96 28. Quick order ability 64
8. Purchase conditions 96 29. Site customizing 62
9. Customer service area 96 30. Postal address 54
10. About company 94 31. Order within 3 clicks 49
11. Local search 94 32. Domain fault repair 48
12. Problem solving 90 33. Find stores 35
13. Cross sell/upsell/addon sale 90 34. Gift certificate 33
14. Online purchasing 90 35. Fax 29
15. Check out 90 36. Request catalog 28
16. Info first time users 89 37. AFFINITY program 21
17. Membership 82 38. Chat 12
18. Mailing list 81 39. Bulletin board 10
19. Prod. customization 79 40. Site tour 6
20. Your account info 79 41. VoIP 2
21. FAQ 75 42. Call back button 0
Note: Table shows the number of retailers having feature on Web site
Source: Nos 1 to 26 – Anton and Postmus (1999); Nos 27 to 42 – additional features
identified in Feinberg et al. (2002, in press)
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number of e-mail boxes increased by more than 60 percent from the end
of 1999 to the end of 2000. There were 891.1 million mailboxes
worldwide at the end of 2000 (Jackson, 2001). It offers opportunities for
improving customer service and reducing costs. Unlike telephone
communication, which is synchronous, e-mail communication is
asynchronous. This reduces costs, since customer service queries will
now be handled in countries with lower labor costs, by taking advantage
of the time-difference. Also, e-mail transmission happens on the Internet,
which is essentially a public service and thus the company does not
incur significant transmission costs.
Local search engine. This feature allows the visitor to search on key
words to quickly locate the required content on the Web site. This
feature is helpful for those site visitors who are looking for a specific
piece of information.
Membership. The visitor can request a password.With this password he
can continue surfing on password-protected Web pages within the Web
site. This feature allows the company to collect personal information
from users, when the user registers for the membership. It also allows
them to track the customer’s behavior at the site over time. This
knowledge allows the business to assess which customers are worth
retaining by looking at current and prospective customer profit and
customer defect patterns (Swift, 2001).
Mailing list. To receive more information, the visitor can add his/her
e-mail address to a list to receive automated e-mails. Often, this is called
a newsletter. This feature allows the company to build a database of
e-mail addresses of potential users of the company’s product or service.
Site tour. The visitor can follow a tour through theWeb site. This allows
users to get familiar with the Web site contents.
Site map. This is a hierarchical diagram of the pages on the Web site,
also called a site overview, site index, or site map. This feature is helpful
in understanding the general structure of theWeb site.
Introduction for first-time users. Visitors, who enter the site for the first
time, can surf to an introduction page containing information about
``How to use the site most efficiently’’. This feature could help attract
prospects and facilitate a first-time purchase.
Chat. This feature allows a visitor to chat real-time with others.
Specifically, this could mean chatting other visitors on the site or with
the customer service personnel. This feature, while not used widely yet,
is likely to see a marked increase in use, as Internet penetration increases
and bandwidth constraints decrease globally.
Electronic bulletin board. Script-driven forums allow visitors to share
information with others and can help shape a Web site to better serve
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the customer needs. A visitor can post a message or can respond to a
posted message on a special Web page. This interaction, over time,
creates a community of users around the company’s service or product.
Many companies have successfully used bulletin boards. For example,
Dell has a highly successful bulletin board where the customers post
and respond to queries. In addition, Dell service personnel continuously
keep track of the bulletin board, allowing them to keep abreast of the
problems that customers are encountering with their products.
Online purchasing. Visitors are able to purchase services or products
online. This feature is probably the most critical part of theWeb site.
Product information online. Visitors can read product information on the
Web site. This feature is critical since Web surfers gather product
information on theWeb and subsequently buy the product from a brickandmortar store.
Customization possibilities. Visitors can customize their service or
product online before ordering. For instance, a visitor may want to
assemble online a PC of a configuration that is not listed on theWeb site.
Or a jeans pant buyer can design a pant that fits his or her body shape
exactly.
Purchase conditions. The purchase and contractual conditions can be
viewed online. Purchase conditions contain shipping policies, return
policies, warranty, guarantee and other company commitments.
Preview product. The (customized) product can be viewed before
purchasing. The product can be viewed in a motion picture or a demo.
External links. The visitor can easily and seamlessly link to
complementary products fromother companies.
FAQs. Frequent asked questions and their answers are available for
reading. This feature acts as self-help for customers looking for answers
to their queries. Like other information on the Web site, this could
potentially help in reducing contact center traffic.
Problem solving. Customers can solve problems with products or
services themselves with online self-help routines. This feature is not
very prevalent since customers show resistance to using this feature.
Complaining ability. Complaints and problems can be detailed online.
The Web site has a specific area for customers to log in their complaints
and get action.
Spare parts. It is possible to order spare parts and complementary
products online. In addition to repeat customer service, this feature
ensures repeat traffic to the site.
Affinity program. Affiliations with philanthropic agencies or
organizations.
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Product highlights. The benefits of a particular products/services are
highlighted. This feature allows the company to highlight products or
services that may be relevant in a particular context. The context could
be a particular festival or a season, among others. This feature also
prompts repeat traffic.
Request for catalog. Allows the user to request a catalog.
Quick order ability. This feature basically allows the user to check out
the product within three-clicks. Amazon.com pioneered this feature.
Because of intellectual property issues, other sites use variants of
Amazon’s 3-click process.
Ease of check out. This is a subjective rating of the ability to check out on
an ``ease’’ scale of 1ˆeasy to 4ˆdifficult. This parameter is important,
since significant numbers of purchases are abandoned at the time of
checkout. A Jupiter consumer survey found that 66 percent of
consumers have abandoned a purchase while in the process of ordering
a product online. This compares poorly with the 2-3 percent
abandonment rates for brick-and-mortar retailers. Part of the reason for
the abandonment is site performance and layout: 10 percent abandoned
the process because the site was too slow, while 6 percent abandoned
because the site crashed during the process and 7 percent said that the
order forms were too difficult to complete (Blank and Daniels, 2001).
Ability to track order status. This feature allows the user to find out which
stage of the shipping process his/her order is in. Customers are more
likely to feel satisfied if they know of the status of their order than if they
do not. According to a Forrester Survey, 58 percent of customers use
customer service to find out when they can expect delivery of their order.
Gift certificate purchase.
Store locator. This feature is helpful since customers gather product
information on the Web and subsequently buy the product from a brickandmortar store.
On-sale area. This is a highlighted place on home page highlighting sale
item(s).
Member benefits. Description of benefits of shopping or of being a site
member.
Order. This feature allows the user to place an order within three clicks.
Speed of download page. The Web site was considered fast if the Web
pages downloaded in less than 15 seconds.
Account information. If the user had registered on the site, the feature
allowed him to view his personal information that he has given to the
site. This could include his credit card information, if he has authorized
theWeb site to retain this information for repeat purchases.
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Customer service page. These pages give details on contacting customer
service.
Company history/profile. These Web pages give the company
background. In the case of retail shopping sites, there will be a link to the
corporateWeb site.
Posted privacy policy. Privacy concerns are coming to the fore with
increased Internet penetration. Today, most sites have a privacy policy
and post it on theirWeb site. This not only assures the customer that his
information is protected, but will also protect the company from
lawsuits from perceived privacy violations.
Hypothesis development
These hypotheses were tested in two parts. In the first part, Study 1, the
presence (or absence) of the 42 possible e-CRM service features on the retail
Web sites used as the sample in this study was assessed. The most and least
available (popular) e-CRM features might represent those features that the
industry believes to be important. Based on the findings from Feinberg et al.
(2002, in press), it is predicted that:
H1. Retailers differ in the presence (absence) of the 42 e-CRM features.
Feinberg et al. (2002, in press) assessed the state of e-CRM in retailing by
analyzing the sites of the top 100 mass merchants, specialty stores, and
Internet-only retailers. In this study, the sample of retailers assessed is broader
and wider, consisting of both larger and smaller retailers across a broader
range of types of retailers. It is expected that the availability of e-CRM features
will vary across retailers. As was found in Feinberg et al. (2002, in press), the
most popular features are expected to be e-mail, 1-800 number, privacy policy,
postal address, membership, product information online, preview product,
online purchasing, store locator, purchase conditions, product highlights,
customer service area, download speed and company profile on site.
In the second part, Study 2, e-CRM features were related to customer
satisfaction. The amount of e-CRM (amount being defined as the number of
e-CRM attributes present on a Web site – from 0 to 42 features) should be
related to customer satisfaction. Therefore, we predict that:
H2. The amount of e-CRM (an index score created by adding the number of
e-CRM factors present – score can range from 0-42) is related to
customer satisfaction.
Based on findings from Feinberg et al. (2002, in press), we also predict that:
H3. Only a small set of e-CRM features is related to customer satisfaction.
In Feinberg et al. (2002, in press), only chat feature, spare parts availability, gift
certificate purchase, mailing address, search engine, links and company profile
were related to customer satisfaction.
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H4. If we assume total e-CRM is related to satisfaction and satisfaction is
related to sales and profit then total e-CRM should be related to sales
and profit.
In Study 1, retail sites were content analyzed on the 42 factors that were
identified as defining e-CRM. The sample of retailers for Study 1 was the set of
271 retailers tracked by Nielsen/NetRatings (the data was made available for
this study by Nielsen/NetRatings) (see Table II). These retailers represent a
broad array of retail types and sizes (from Wal-Mart, the largest retailer in the
world, with annual revenues of 217 billion, to Bookpool LLC Wordsworth
Books, with annual Internet sales of $750,000). These Web sites were chosen
because they represent the census of retail Web sites tracked by Nielson/
NetRatings panel data on customer satisfaction. Two independent raters
examined the Web sites of the 271 retailers for the presence and absence of the
42 e-CRM attributes. The two independent raters were trained to recognize the
factors identified as e-CRM factors on retail sites not in the sample until they
achieved >95 percent agreement independently. Disagreements after training
were resolved with a discussion between raters.
The second study was designed to see if any of the e-CRM features identified
in Study 1 determine consumer satisfaction. To accomplish this, customer
satisfaction ratings were obtained from Nielsen/NetRatings. The sample for
Study 2 was the set of 271 retailers tracked by Nielsen/Netratings on a
continuous basis. Nielsen/NetRatings (www.nielsen-netratings.com) is the
largest research firm focusing on Internet audience measurement and analysis.
Internet user behavior (click behavior) is monitored by a real-time meter
installed on individuals’ computers worldwide, both at home and work.
Nielsen/NetRatings is affiliated to Nielsen Media Research, a leading televisionaudience
measurement company, andACNielsen, the global leader in providing
market research and analysis to the consumer products and services industries.
Nielsen/NetRatings collected the Internet usage data and follow-up survey
work from a representative consumer panel of Internet users who purchased
from the different Web sites. The satisfaction number represents mean level of
overall satisfaction with a particular site among respondents who seriously
considered or made a purchase from that site (1ˆ``completely dissatisfied’’,
10ˆ``completely satisfied’’). The Nielsen/NetRatings satisfaction data for the
sample of retailers is available in Table II.
Results
Presence of e-CRM features
As expected, (H1) retailers vary in the presence of the various e-CRM features
(see Table I). The most common e-CRM features (>90 percent of retailers
having them) were: complaining ability, privacy policy, product information
online, product highlights, preview product, site map, e-mail, purchase
conditions, customer service area, about company, local search, problem
solving, cross-sell/up-sell/add-on-sale, online purchasing and check out. The
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Table II.
E-CRM score and
satisfaction with retail
Web sites tracked by
Neilsen/Netratings
Company
Mean satisfaction score,
overall (1-10 scale) E-CRM score
123greetings.com 7.9 21
1-800 Contacts, Inc. 7.54 31
1-800-Flowers 7.93 31
1bookstreet, Inc. 7.91 32
3Com Corporation 7.21 25
ABC distributing, inc. 8.1 34
Abercrombie & Fitch 7.86 20
ADB Systems International, Inc. (bid.com) 7.03 22
Adobe 7.99 27
Air Tran Airways 7.97 29
Alaska Airlines (Alaska Air Group) 7.76 31
Alloy, Inc. 8.63 35
AltaVista Company (CMGI) 8 22
Amazon.com 8.52 38
Amer Group Plc. (Wilson Sporting Goods Co.) 8.01 16
America online 7.33 21
America West Airlines 7.89 31
American Airlines 7.54 29
American Eagle Outfitters 8.49 29
American Express 7.81 34
American Greetings 8.26 24
Amtrak 7.52 29
Ann Taylor Retail, Inc. 7.93 38
Apple 8.35 33
ARTISTdirect, Inc. 8.5 27
Ashford 8.14 32
ATomShockwave Corp. (AtomFilms.com) 8.78 25
Auction.com Inc. (Nimbus) 6.98 25
Audio Book Club (MediaBay) 7.37 30
Avon 7.79 28
BarnesandNoble.com 8.19 35
Beaniemania 7.06 11
Bertelsmann AG (Bookspan) 7.84 30
Best Buy 7.6 33
Best Fares USA, Inc. 7.54 30
Beyond.com Corporation 7.03 15
Bigwords.com 8.33 9
Blockbuster 8.3 31
Blue Mountain (American Greetings.com Inc.) 8.67 24
Bluefly, Inc. 7.65 31
BMG Entertainment 7.79 27
BONZI.COM Software, Inc. 7.11 32
Book-of-the-Month Club, Inc. 7.94 31
Bookpool LLC 7.88 29
Bookspan – Quality Paperback Books 7.76 27
Borders 8.1 39
Bose Corporation 7.59 27
Broderbund LLC 7.77 35
(continued)
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Table II.
Company
Mean satisfaction score,
overall (1-10 scale) E-CRM score
Brookstone Company, Inc. 7.6 36
Burpee Seeds 8.17 22
Buy.com 8.21 33
Cabela’s Inc. 8.15 36
Campmor, Inc. 8.37 38
CD Now 8.43 32
CD Universe 8.04 33
CDW 7.85 31
Chadwicks (Brylane) 8.04 31
Cheap Tickets 7.2 28
Christianbook.com 8.4 33
Circuit City 7.43 29
City Auction 7.03 24
Clairol, Inc. (Bristol Myers Squibb) 8.06 21
Classic Fragrances, Limited 7.66 25
Clinique (Estee Lauder) 8.41 31
CNET 8.06 16
CNN/Sports Illustrated (GolfOnline.com) (CNN
News Group) 7.48 11
Coldwater Creek 8.52 34
CollectingNation.com, Inc. 8.18 26
Columbia House 7.68 31
Comp USA 7.16 33
Compaq 7.47 25
Conde Nast Inc. (Epicurious.com) 8.16 21
Continental Airlines 7.97 28
Cooking.com 8.21 31
Costco Wholesale Corporation 7.65 28
Crate & Barrel (Euromarket, Inc.) 8 37
Crutchfield 7.87 33
CVS Corporation 8.15 34
Cyberian Outpost, Inc. 8.35 26
Damark.com (Provell) 7.31 30
Delia’s Corp. 8.25 31
Dell Computer Corporation 7.75 35
Delta 7.73 29
Disney Online 7.98 23
Doubleday Book Club (Random House) 8.32 26
Doubleday Direct, Inc. (Crossings.com) (Barnes
and Noble) 8.44 29
Drugstore.com, Inc. 8.52 29
Drugstore.com, Inc. (Beauty.com) 7.82 35
Eastbay 7.98 28
eBay Inc. 8.34 33
EBWorld.com, Inc. 7.81 33
ecampus.com 7.55 28
Eckerd Corporation 7.06 34
eCost.com (PC Mall Inc.) 6.92 31
(continued)
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Table II.
Company
Mean satisfaction score,
overall (1-10 scale) E-CRM score
Eddie Bauer (Now part of Speigel) 8.18 35
Egghead.com 7.81 37
Egreetings Network, Inc.
(americangreetings.com) 8.54 29
Electronic Arts 8.25 27
ESPN 7.58 33
Estyle, Inc. 7.92 27
E-Toys 8.2 32
Expedia Travel 8.09 31
FAO Schwarz 6.66 33
Federated (Bloomingdale’s) 7.44 26
Federated Department Stores – Macy’s 7.32 32
Fingerhut (Federated dept. Stores) 8.01 31
Fingerhut (PCFlowers.com) (Federated) 7.28 32
Foot Locker 8.46 32
Fossil, Inc. 8.1 32
FOX Interactive Television, LLC (20th Century
Fox Film Corporation) 8.32 28
FragranceNet.com, Inc. 8.14 29
Frederick’s of Hollywood 7.97 31
FTD.com 7.68 30
Gap (Gap Inc.) 8.19 33
Gap, Inc. – Banana Republic 7.72 33
Gateway 7.68 33
Gateway – NECX Direct 7.79 31
GiftCertificates.com 8.51 33
Global Sports Interactive (Fogdog.com) 7.54 30
Gloss.com, LLC 6.73 29
Godiva (Campbell Soup Company) 8.38 32
GORP 7.88 32
Greyhound Lines, Inc. 7.76 30
Gurney Seed and Nursery Co. (MySeasons.com) 8.2 31
Half.com by eBay 8.26 31
Hallmark 8.31 26
Handspring, Inc. 7.94 29
Hanover Direct, Inc. (Domestications.com) 7.68 32
Hertz 7.73 24
Hewlett-Packard Company 7.59 26
Hifi.com (Cambridge Soundworks, Inc.) 7.94 36
Home and Garden Television 8.1 31
Home Depot 7.63 31
Homestore.com, Inc. 7.5 30
Hot New Products, Inc. (FitnessZone.com) 7.18 32
Hotel Reservations Network, Inc. (Hotel
Discounts.com) (Hotels.com) 7.49 32
HSN Interactive LLC (USA Interactive) 8.12 32
ibeauty.com 7.87 26
IDEAL International, Inc. (DealDeal.com) 8.07 25
(continued)
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Table II.
Company
Mean satisfaction score,
overall (1-10 scale) E-CRM score
IdeaMall, Inc. (MacMall.com) 8.16 33
iGo Corporation 8.33 31
IKEA 7.36 19
Insight Enterprises, Inc. 7.96 26
International Business Machines Corporation 7.26 31
Intuit 7.98 24
iVillage Inc. (HomeArts.com) 8.43 19
J & R Electronics, Inc. 7.91 32
J.Crew 8.04 33
J.Jill 7.94 37
JCPenney 8.02 30
JustBalls, Inc. 9.24 32
K-B Toys 8.18 32
Kmart Corporation 7.77 33
Lancome (L’oreal) 8.12 32
Lands’ End 8.31 31
Lane Bryant (Brylane Inc.) 7.65 19
LEGO Company 8.26 34
Levi Strauss and Co. 7.95 20
LL Bean 8.29 37
Lowe’s 7.67 30
Lowestfare.com 7.47 31
Macromedia, Inc. 7.48 31
Marriott 7.86 27
Martha Stewart Living 8.04 27
Mary Kay Inc. 8.52 27
Mattel, Inc. (Barbie.com) 7.56 7
Maybelline, Inc. 7.62 22
McAfee 7.94 27
Merck & Co., Inc. – Merck-Medco 8.06 34
Micro Warehouse, Inc. 7.67 30
MicronPC, LLC 7.37 21
Microsoft 7.78 34
Moet Hennessy Louis Vuitton – Sephora 8.28 36
More.com 7.32 26
MP3.com 7.64 33
Neiman Marcus 8.31 34
Net Central Inc. – Books-A-Million 8.35 30
NetFlix 8.07 31
Netscape 7.29 28
Newport News 8.36 25
NFL Enterprises 8.1 30
NHL Enterprises, L.P. 7.15 32
NIKE, Inc. 7.83 31
Nordstrom 8.05 37
Northwest Airlines 7.51 22
Office Depot 7.75 31
Office Depot-Computers4sure 7.67 34
(continued)
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445
Table II.
Company
Mean satisfaction score,
overall (1-10 scale) E-CRM score
Office Max 7.47 34
Old Navy (Gap Inc.) 8.35 34
OneHanesPlace 8.09 31
OneTravel.com, Inc. 8.44 27
Overstock.com (Gear.com) 8.11 30
Palm Inc. 7.35 29
Panasonic (Matshushita Electric) 7.23 26
Patagonia, Inc. 7.83 33
PC Connection, Inc. 8.17 32
PC Flowers & Gifts.com Inc. (Gifts.com) 6.23 33
PC Mall, Inc. 7.78 31
Pegasus Systems, Inc. – Travel Web (Pegasus
solutions, Inc.) 8.63 27
Pier 1 Imports 8.27 32
Planetrx.com, Inc. 7.45 5
Powell’s Books 8.42 35
Priceline.com 7.38 29
Proctor & Gamble – Cover Girl 7.77 25
Proflowers 8.6 26
Quixtar (Alticor Inc.) 9.21 30
QVC 8.64 34
Radio Shack 7.62 28
Ralph Lauren – Polo 8.02 31
Random House, Inc. 7.02 24
RedEnvelope, Inc. 7.72 33
Reflect.com (P&G) 7.72 33
REI 7.94 36
Revlon Consumer Products Corporation 7.33 23
Richard Simmons 7.74 29
Rosenbluth Intl. (BizTravel.com) 7.41 19
Sears 7.53 37
Sierra 7.7 16
SkyMall, Inc. 7.45 34
Smarter Kids (Excelligence Learning Corp.) 7.93 31
Soccer 4 All 8.01 20
Sony 7.58 31
Southwest Airlines 8.62 24
Sparks.com 8.6 31
Spartan Stores (VirtualFlowers.com) 7.42 25
Spencer Gifts 8.54 30
Spiegel 8.28 27
SportsLine.com 8.37 29
SportsLine.com, Inc. (MVP.com) 7.98 32
Staples 7.57 33
Symantec 7.98 23
TAEBO 8.76 20
Target Corporation 7.97 32
Textbooks.com 7.8 35
(continued)
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least popular features (<15 percent of the sites) were chat, bulletin board, sitetour,
VoIP and call-back button.
Relationship between e-CRM features and satisfaction
The presence of an e-CRM attribute does not speak of its importance or
usefulness. Study 2 was designed to find those e-CRM attributes that may be
related to customer satisfaction.
H2 was about the relationship between e-CRM and customer satisfaction.
There was a statistically significant positive relationship between the number
Table II.
Company
Mean satisfaction score,
overall (1-10 scale) E-CRM score
The Limited, Inc. – Express 7.69 18
The Literary Guild 8.07 27
The Sharper Image 7.72 33
The Sports Authority 7.56 34
The Vitamin Shoppe 7.79 35
TigerDirect, Inc. (Systemax Inc.) 8.01 33
Tower Records (MTS) 8.03 31
Toys R Us 7.78 39
Travel Online 7.69 27
Travelocity 7.94 30
Travelzoo Inc. 8.06 28
Trilegiant Corporation (NetMarket.com) 6.56 36
Trip.com (travelbuys.com) 7.81 31
Tucows Inc. 7.78 23
Ty Inc. 7.91 29
U.S. Retail Flowers, Inc. (GeraldStevens.com) 7.99 28
uBid 7.7 24
United Airlines 7.76 30
Universal Studios 7.76 23
US Airways 7.66 25
Varsity Group Inc. 7.98 32
Viacom (iwon) 8.27 32
Victoria’s Secret (Intimate Brands Inc.) 7.98 34
Videoflicks.com, Inc. 7.41 27
Vitacost.com 7.85 32
Walgreen Co. 8.05 32
WalMart 7.93 32
Williams Sonoma, Inc. – Pottery Barn 7.96 34
Williams-Sonoma, Inc. 8.21 33
WinZip Computing, Inc. 7.66 19
Wizards of the Coast, Inc. (Hasbro Inc.) 9.17 33
WordsWorth Books 7.31 29
X10 7.62 35
Yahoo! Inc. 7.91 30
Zappos.com 8.33 34
ZD Net 7.99 22
Zones Inc. – Mac Zone 7.77 33
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447
of e-CRM attributes present (an index score created by simply adding up the
number of e-CRM features on a retail site (0-42) and customer satisfaction,
r…n ˆ 271† ˆ 0:14, p < 0:05†. Thus, as e-CRM increases on a site, the greater
the customer satisfaction will be.
The possible relationships between any particular e-CRM attribute and
customer satisfaction was analyzed using Chi-square analyses on a merged
data set of retail e-CRM scores and Nielsen/NetRatings satisfaction scores.
Customer satisfaction ratings was Nielsen/NetRatings panel’s self-reported
satisfaction with shopping on the Web site. The set of 271 retailers were
divided into retailers with or without a particular feature (e.g. had ``e-mail’’
versus ``did not have e-mail’’). Each of these retailers was defined as being high
or low in customer satisfaction or site traffic based on a median split of that
category. Thus, to analyze the effect of e-mail on theWeb site we would have a
2 £ 2 contingency table of retailers who have or do not have e-mail and who are
low and high in customer satisfaction (and site traffic). Chi-squares were
completed on the e-CRM features and the customer satisfaction and customer
traffic scores for each of the e-CRM attributes.
H3, which stated that there are some e-CRM attributes related to customer
satisfaction with the site and some that are not.We had hypothesized (based on
a previous study of retail sites – Feinberg et al. (2002, in press)) that chat
feature, spare parts availability, gift certificate purchase, mailing address,
search engine, links and company profile would be related to customer
satisfaction. However, in this study, the significant relationships were between
having mailing list, À2…1† ˆ 3:96, p ˆ 0:05, quick order ability …À2…1† ˆ 7:48,
p < 0:05†, gift certificate purchase …À2…1† ˆ 5:59, p < 0:05†, and affinity
program …À2…1† ˆ 11:1, df ˆ 1, p < 0:05†, your account information
…À2…1† ˆ 3:76, p < 0:05†, and customer satisfaction. Only the finding that
availability of gift certificate purchase is related to customer satisfaction
matched the finding from the Feinberg et al. (2002, in press) study.
H4 concerned the relationship between e-CRM and profits or revenues.
Pearson correlations indicated that total e-CRM was not related to profit or
revenue (p > 0:05).
Although it is commonly believed that e-CRM leads to customer satisfaction,
which leads to sales and profit, the data here indicate that while e-CRM is
related to satisfaction it is not related to sales and profit.
Discussion and implications
It is generally accepted that e-CRM/CRM is related to customer satisfaction,
profit and sales. This research suggests that e-CRM is related to customer
satisfaction with a retail site but not to sales and profit. The results also
indicate that not all e-CRM is the same.
If e-CRM is related to satisfaction, the relationship is not strong. Thus failure
of CRM implementation may not be because the implementation is a failure but
because there just is not much that can happen. With expectations high, very
low results, while natural, may be disappointing and defined as failure. The
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negative/low relationships between satisfaction and sales and profit, if
accurate, show that the relationship between e-CRM and sales and profit is, at
best, complex. And it really should be. Profitability and sales are more than
simply a direct result of CRM. Expenses, inventory, SG&A and a host of other
variables determine profitability. At the expense of being simplistic . . . revenue
is about the stuff. Like the Clinton campaign where the theme was ``It’s the
economy stupid’’, these results suggest that it is the ``stuff’’ stupid. Consumers
consume stuff not e-CRM. The talk of e-CRM/CRM seems to hide the
importance of the merchandise. If it is not compelling you get no sales/revenue.
If e-CRM is not compelling you still may get sales and revenue.
Not all aspects of e-CRM are equally important in determining customer
satisfaction. This implies that some of the CRM implementation failures
(estimated at >75 percent) may be due to the implementation of features that
executives believe affect customer satisfaction (that is what their experts and
consultants told/promised them) but in reality do not have any effect on it at all.
Thus, when customer satisfaction or sales figures do not reach an acceptable
ROI for the investment in e-CRM/CRM the implementation is considered a
failure. It may be that the implementation is on features that should not have
an impact. The features that were found significantly related to customer
satisfaction in this study are not consistent with those found significant in the
past research. Can it really be that having a mailing list, quick order ability,
gift certificate availability, affinity program, and your account information
determines customer satisfaction with a retail Web site? It is unlikely. So what
does this mean? First, it means that more research needs to be done. It means
that right now CRM vendors who tell retailers (businesses) that their attributes/
features are the thing to do are probably wrong. Each company needs to
research what aspects of e-CRM determine their customers’ satisfaction. It may
also mean that there is – despite the findings of variability of e-CRM attributes
across sites – parity in the important ones . . . just about everyone has e-mail
and complaining functions, so any positive impact of having that attribute is
equal across all sites.
There are a number of interesting aspects of the findings of differential
availability of e-CRM features that exist across retail sights. For example, a
1-800 toll free number is available on only 75 percent of the sites. Telephonic
access is considered the entry point for all businesses as they create exceptional
customer relationships. That 25 percent ofWeb sites do not show 800 access (if
the company has it and does not publish, it is probably even a greater mistake,
since people right now prefer telephone to Web access). On the other hand,
running or outsourcing an 800 number is expensive. If, as this research
suggests, an 800 number has no impact on customer satisfaction with a site
then maybe these companies are smart . . . saving money.
E-mail is available on 96 percent of the retail sites of this study. This reflects
the growing importance of e-mail as the preferred touch-point for customer
complaints received at the modern contact center. The popularity of e-mail is a
good thing. The cost per contact between e-mail and live person (phone or in
Customer
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449
person) is significantly different. It is much cheaper to have your customer
contact e-mail based (much cheaper still if the contact wereWeb based).
It is well established that complaints can have a significantly positive
impact on a business. There is considerable evidence today that dealing
effectively with complaints can have a dramatic impact on consumer
evaluations of retail experiences, as well as enhance the customer’s likelihood
of repurchase and limit the spread of damaging negative word-of-mouth
(Blodgett et al., 1997). Complaints are pieces of market intelligence and give
businesses the ability to improve functions (they find out what they are doing
wrong) and to recapture otherwise lost customers. Complaining ability is
available on 99 percent of the Web sites surveyed. This shows not only that
retailers understand the importance of complaints but they also see the Web as
an important touch-point for soliciting feedback.
There are some e-CRM attributes that clearly are not seen as important,
despite thinking that might reflect that they are. It seems to be generally
believed that community of consumers creates loyalty. The bulletin board is a
customer-to-customer communication feature. If customers can communicate
they can create other/better uses for a company’s products or services and
thereby create additional satisfaction. Bulletin boards also fix problems that
consumers would otherwise have to handle directly with the company. Yet,
despite it being a positive e-CRM feature, it is available on only 10 percent of
the sites, respectively. Voice over IP (VoIP – the ability of consumers to talk
directly with a representative while on the Web site with no additional
telephone line) is available on only 2 percent of the sites in the sample and a
while call-back button is not available on any of the sites at all. VoIP is not
available simply because the broadband technology that makes it possible is
yet to be widespread. However, call-back, which allows you to speak to a
representative after disconnecting with the simple click of a button, may be its
equivalent and it is available now to every retail site. Yet it is not present. Does
this reflect ignorance of the technology or ignorance of its potential importance
in sales and service?
The increased importance and sensitivity of privacy is reflected in that 99
percent of the sites had this posted. The strong privacy concerns among
consumers and also pressure from federal regulators to adhere to norms
protecting the privacy of the site visitors has led Web sites to focus on privacy
issues.
Another feature that has significant potential and seems to be understood by
retailers is product customization. It is available on a relatively large
percentage of the Web sites (79 percent). Customization is associated with
higher sales and margins.
This study shows that some e-CRM features may have a relationship with
customer satisfaction. Statistically significant relationships were found
between mailing list, quick order ability, gift certificate and affinity program
and customer satisfaction. However, at face value, these attributes seem
peripheral in nature and are not central to the functioning of an e-commerce
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site. The relationships found may be simply chance occurrences. The fact that
the significant relationships in this study differed from the previous work
suggests that different samples of retailers may yield differing relationships. If
this is true, the nature of the sample becomes very important in interpreting the
conclusions of research and the ratings of experts.
There are a couple of methodological weaknesses of this study that need to
be recognized as the results are assessed. Customer satisfaction measurements
of Web sites were taken from secondary data. While the Nielsen/NetRatings
data is good for the industry, it may not be good for academic research. We
cannot guarantee the accuracy or representativeness of the data. Essentially we
need to ask if the customer satisfaction scores really represent satisfaction. It
may be that the data are neither valid nor reliable. If this is true, then any
associations that we may make are inaccurate.
Although we believe we have identified 42 aspects of e-CRM, it may be that
we do not understand the defining features of e-CRM, implying that the 42
e-CRM may not really define CRM. We may have missed some attributes that
will turn out to be really important. In addition, e-CRM is not static but a
dynamic state. Thus, the results at any point in time must be considered in
light of the changing nature of the industry, since the results may be very
different if the same study is done a few years later.
This study focuses on the link between e-CRM/CRM and customer
satisfaction because it is believed that customer satisfaction mediates purchase.
However, this may be of limited value since customer satisfaction may not
necessarily lead to purchase.We know that in many cases satisfaction does not
lead to purchase and dissatisfaction does not necessarily lead to defection
(Feinberg et al., 1990). Thus, increased customer satisfaction may not
necessarily improve the bottom line nor customer dissatisfaction necessarily
harm the bottom line.
Finally, as the results of this study are considered, we must reflect on why
the relationship between e-CRM and satisfaction is so low, why only some of
the relatively insignificant features of e-CRM were related to customer
satisfaction and why e-CRM was not related to sales and profit. It may be
because e-CRM may simply not be an important issue in consumer choice. CRM
may differentiate retailers, all things being equal, butmost of the time CRM has
little to marginal impact on purchase and satisfaction. The real test of the
importance of CRM/e-CRM would be in some trade-off study looking at the
marginal/significant impact of e-CRM as product choice becomes less optimal.
We would suggest that it really is all about the product/service. If the ``stuff’’ is
not right no amount of e-CRM/CRM is going to make a difference. If the
product/service is equal across retailers maybe e-CRM/CRM would make a
difference? But would this difference be greater than a difference in price,
location, and convenience? Simplistic discussions and pronouncements of the
importance of e-CRM/CRM may simply cover up how little difference it makes.
Vendors and gurus in this area make no money if all that is important is
the ``stuff’’.
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451
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