Fool.com: Creating Good Customer Experiences (Fool on the Hill) November 1, 1999

FOOL ON THE HILL
An Investment Opinion

Creating Good Customer Experiences

By Yi-Hsin Chang (TMF Puck)
November 1, 1999

I just learned about an interesting New York-based Internet company called Creative Good. Its CEO, Phil Terry, recently spoke to NYU-Stern Business School's Technology and New Media Group (TANG), of which I'm an officer.

What is Creative Good? It's a privately held Internet strategy consulting firm focused on the customer experience. It aims to bring its clients "higher revenue, more customer retention, better branding, and enhanced productivity" by improving the customer experience. It's not enough to spend millions of dollars driving traffic to a website; Internet companies must also invest in the experience customers have once they get to the site.

The key words here are "customer experience." Phil Terry explained that the Web is simply too hard for people to use. According to market research, 40% of online job applicants can't figure out how to actually apply for jobs online; 62% of online shoppers have given up at least once while looking for products.

Creative Good argues that online companies are losing money because most websites are not designed with the customer in mind. The company estimates that $6 billion in potential revenues will be lost this holiday season as a result of the "customer experience gap" -- the difference between what customers want and what they get. Many shoppers will become frustrated by the process of shopping online and will turn to traditional channels for their purchases.

According to Creative Good, what online shoppers care most about are security, navigation, selection, and price. Selection and price are nothing new in terms of shopping, but security and navigation are factors driven by the customer experience. Navigation can essentially be boiled down to ease of use. Consumers want to do their online shopping quickly and easily.

In terms of security, the difference between paying for purchases online and paying a bill at a restaurant is that consumers don't feel comfortable on the Web, which is all too often foreign, intimidating, and confusing. Think about it: Why would you feel more comfortable handing your credit card to a complete stranger at a store or giving your card number to someone over the phone versus shopping online? It's because you feel in control and comfortable in those offline environments. So far, many websites remain far less certain.

In short, Creative Good is all about making the Web easier to use and making money for its clients. Phil Terry talked about transforming the industry, changing its mindset from "technolust" -- love of technology for technology's sake -- to actually serving the customer. He pointed out that Web designers often are kept out of the loop when it comes to what customers really want. By communicating key concepts to designers, Terry has found them eager to better serve customers.

An interesting Web page to visit is the Creative Good/ZDNet Best Practices homepage, which features top 10 lists for the best and worst e-commerce implementation efforts. Among the top 10 best sites are reel.com, Amazon.com, UPS.com, Outpost, and FAOSchwarz. Among the 10 worst are Levi's, Women.com, Blockbuster.com, Macy's, and Starbucks.

The people at Creative Good have zoomed in on a key concept for succeeding on the Web. It seems like common sense to put the customer first, but all too many websites simply aren't doing that. It's essential that we recognize this problem and evaluate companies accordingly.

As investors and customers, it's important to examine the user-friendliness of various sites. Ultimately, the websites that don't create a good customer experience will continue to lose money and, in some cases, will deservedly go out of business.