42% of online consumers abandon or switch after experiencing online transaction issues; another 52% experienced bad customer service at a contact center, following an online issue, and subsequently stopped doing business with the company entirely.

The results of a newly released consumer survey commissioned by Tealeaf and conducted by Harris Interactive reveals waves of consumer frustration with issues they are encountering when using ecommerce websites. For the third consecutive year, about nine out of 10 consumers conducting transactions online (87%) have experienced problems. This year's survey highlights online consumer intolerance, as 42% of those who have experienced problems when conducting online transactions have switched to a competitor or abandoned the transaction entirely, and another 52% who have experienced bad customer service from a company's contact center, following an online issue, have completely stopped doing business with the company.

eCommerce continues to grow — Forrester Research estimates 2007 online retail sales at $157.4 billion and expects this number to grow to $271.6 billion (or 9% of retail sales overall) by 2011 ("US Retail eCommerce Forecast", Forrester Research, Inc., 2006-2011, May 2007). But, this growth camouflages underlying issues. "We're in a 'perfect storm' as users' dependency on ecommerce grows and their patience for bad online experiences wears thin," said Rebecca Ward, CEO, Tealeaf. "More than a decade into ecommerce, we're increasingly savvy online consumers, and we're no longer willing to put up with experiences that do not live up to our expectations. Companies doing business online must pay attention to their customers' experiences and help them to succeed, or risk losing them entirely. The only way to understand issues, improve conversion rates and better serve customers is to have visibility into everything that happens on your online channel."

As problems persist, consumer backlash is permeating the online channel. A lowered cost of switching online merchants — alternate providers are just one click away — has radically changed shopping behavior. Often, companies are subjected to drastic consequences when they fail to deliver, illustrated by the 42% of online consumers who abandoned or switched to a competitor after transaction issues.

Failed transactions also have a significant impact on those consumers who do not immediately switch, but still try to buy from a company after experiencing them. 53% of online users with issues would contact customer service. Of those, almost half (49%) did not have their issue resolved. In fact, 68% of consumers did not feel that the service agent was knowledgeable about the website; and 70% did not believe the agent understood their particular issue.

Bad customer service received from contact centers led to a second wave of abandonment, resulting in major business impacts — about half of those who experienced bad customer service from a company's contact center decided to stop doing business with the company entirely (52%) and a full 76% either stopped doing business entirely, decreased the amount of business they do with the company, or lodged a complaint with the Better Business Bureau.

"The risk of abandonment is escalating not only after initial online transaction problems, but also for those who try to remain loyal, because contact centers are fundamentally ill-equipped because they lack the visibility to adequately address the concerns of website customers," said Ward.

Survey Methodology
Harris Interactive® fielded the online survey on behalf of Tealeaf Technology, Inc. between August 13 and August 21, 2007 among nationwide cross-sections of 2,420 adults aged 18+ in the United States who are online. The data were weighted to be representative of the total online U.S. adult population on the basis of region, age within gender, education, household income, and race/ethnicity. The data were weighted to be representative of the population of online adults in each country. In theory, with probability samples of this size, one can say with 95 percent certainty that the results for the sample has a sampling error of plus or minus 2 percentage points. Sampling error for data based on sub-samples may be higher and would vary. This online sample is not a probability sample and therefore no theoretical sampling error can be calculated.