A study carried out by Aspect Consulting and commissioned by fail-over software developer Rainfinity, found that of the 100 organisations surveyed, a majority were putting too much focus on getting customers onto a site but not putting enough effort into keeping them there.
Only 53% of European ebusinesses attempted to monitor the end-to-end success or failure of online transactions. And 60% of these rely on the customer themselves to alert the firm to a failure.
But this is where the problems start, as a majority of disgruntled users will simply move onto the next vendor – 42% never return to a site where a transaction has been unsuccessful.
Rainfinity claims that this is because over three quarters of ebusinesses do not have a system that allows them to manage a transaction that fails, leaving the customer in the dark and inadvertently prompting them to move to a competitor.
Furthermore, 63% of ebusinesses are unable to measure the cost of online failures in terms of revenue, customer loyalty and brand reputation.
But Colin Rowland, European vice president of Rainfinity, claims that boosting customer retention by 5% can improve profits by 25% plus.
‘While customers are prepared to accept the fact that online transactions may fail, they will keep jumping to competitor sites unless organisations can find a way of communicating with them and solving the problem,’ he said.
An accompanying study by analyst McKinsey & Co concluded that the real cost to a business is not the value of an isolated lost transaction, but the future spending potential of the frustrated online customer that moves to a competitor.
‘This research shows that organisations are looking at their ebusiness strategies from the wrong perspective,’ said Rowland. ‘Too much emphasis is being placed on developing the system itself and not enough on the revenue, loyalty and brand implications of a poor online customer experience.’
The report concluded that over 50% of online transactions in European ebusiness are sales related. And with internet downtime becoming more inevitable, organisations will suffer unless they start waking up to the potential impact of that downtime on their online revenue stream.
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
New BDO managing partner Paul Eagland reflects with Accountancy Age on which historical figure he would like to seek advice from - and what they would advise