This post focuses on trust issues relating to an Ecommerce environment, but it can be applied to many different types of website environment.
“Trust is hard to build - and easy to lose” - Jakob Nielson, E-Commerce User Experience
These days, the web offers so much choice that it is vital to gain the user’s trust if you stand any chance of seeing them through the intended user journey. Gaining the user’s trust is a significant factor in the sales cycle and it is important to build these trust factors into and around your web presence to ensure success.
Trust Issues that Affect Ecommerce
Pre-Purchase Uncertainties - These arise online because the customer doesn’t experience a real-world situation when purchasing a product and they can make no real judgement on the people responsible for the Ecommerce website. Ecommerce websites do not present a real picture of the product, and the representative information such as the picture may not do the product justice or vice-versa. There may also be a lack of support on certain websites, or the support that is offered may not be instant, e.g. email. All of these work to erode the online consumer’s trust.
Post-Purchase Uncertainties – These result after customers exchange their money for a product on an Ecommerce website and it sinks in that they usually won’t receive that product until a few days later. The customer’s trust is put into the vendor’s hands; they expect the product will be delivered as agreed when they made their order.
“Frequently, customers must supply personal information (such as names, address and credit card information) in order to be able to accomplish a transaction, unlike the anonymity granted by cash.” (Araujo, 2003)
Once personal data is submitted to the vendor, there is no way the customer can take it back, even if they cancel the transaction. Again the customer is placing a lot of trust in the vendor. Another issue for the customer that may affect their trust with the vendor is the company’s policies on issues concerning customer dissatisfaction and return and exchange. If the customer isn’t happy with their purchase, how do they go about sending it back? Do they get a refund or do they only get another product? Who pays the shipping costs?
Security Uncertainties – This is a key issue for trust. The customer needs to feel that the Ecommerce site is secure if they are going to input their personal data. Web browsers alone will not secure a data exchange from customer to vendor: Secure Socket Layer connections need to be present.
Ecommerce websites need to have measures in place to convince their potential customers that the Internet can be secure and can be a place where they can safely share their personal data. This can be done by letting the customer know which security measures have been implemented on the website by clearly advertising them. Companies with Ecommerce websites in particular have a responsibility to inform their customers of efforts being made to their system to ensure that it runs effectively and error free.
Privacy Uncertainties – Customers will worry about the availability of their credit card details to untrustworthy third parties and as such will be concerned about cookies/sessions that may hold private information. These considerations need to be taken seriously, with the best security measures implemented to maintain the customer’s trust.
Customers may also feel threatened that people will misuse their personal information for activities unrelated to their purchase. These kind of activities may include data gathering and exchanges with third parties for activities such as unnecessary advertising schemes.
The issues mentioned above highlight that the customer must feel a sense of trust before they will want to use an Ecommerce website. If these issues are dealt with and meet the customer’s expectations, they will more likely trust the technology and want to use it again.
Retention of Customers
“Retention of customers has become increasingly important for businesses operating on the Web because their customers are now playing a dual role of end users and consumers.” (Vatanasombut, Stylianou & Igbaria, 2004)
There are numerous benefits for a business to work on retaining a customer:
- Long-term customers are going to spread the word of the good service they receive to other potential customers.
- Businesses are more likely to spend money on resources for long-term customers in order to keep them loyal, which may be due to an experience curve effect. It was found that UK internet shopping was worth £1.2 billion per month during October 2004 and that it represented 6% of all UK retail sales. These findings are expected to surge to a massive 30% of all retailing within a decade, due to transactions becoming increasingly ‘customer focused’ rather than ‘shop focused’. (Interactive Media in Retail Group, 2004)
- Customers who are loyal to a business and have levels of trust with them are more likely to pay a higher price for a product, even if it is available more cheaply on another Ecommerce website. This is because of a confidence in the service will be receive.
“It was found that profit on credit card services purchased by a customer with a 10-year history is on average three times greater than that of a five-year customer” (Vatanasombut, Stylianou & Igbaria, 2004)
- The study of customer buying patterns and personalization is becoming a popular method for retention. Large organisations such as Dell, Amazon and Tesco are examples of this. Dell employ strong methods to study consumer buying patterns, which allows them to provide high levels of customer support and can also be used to forecast future sales. (Martinsons)
- Improvement to customer experience benefits both parties. To increase the customer’s satisfaction, their experience needs to be memorable and it must be engaging. This can be performed with a user experience design approach. These details may result in the customer returning.
The experience a user has online and the functionality of an Ecommerce website will have a great effect on customer retention. Vatanasombut, Stylianou & Igbaria, (2004) explain that there are two main categories that customers fall into; ‘Novice Users’ and ‘Sophisticated Users’. Both types of consumer may terminate their transaction prior to completing it, but they are generally motivated by different reasons.
The typical scenario of a novice customer who terminates their transaction may be down to several issues where the Ecommerce website does not satisfy their trust and confidence. These might include a lack of compatibility with the browser or that they have forgotten the password or login details to their account. Features such as different versions of the website to cater to browser and device compatibility, or the option to send a password reminder/reset to their email address will help address customer needs, increase their trust and help with retention.
The typical scenario of a sophisticated customer who terminates their transaction is likely down to the actual Ecommerce system letting them down. Examples of this may include servers not responding, poor performance, or an incompatibility with the software/hardware software they may have installed. It is the organisation's responsibility to deal with these incompatibilities in order to retain their customers.
Retention of customers is a key factor for a business to survive in the Ecommerce environment. Not only does it increase the growth of the business but it is potentially profitable. Separating the users into the two categories mentioned above will help highlight what should be done in order to keep them coming back. It also shows the important role they play in the survival of the company’s Ecommerce strategy. The barriers that stop the novice users from returning should be lifted and the expectations of sophisticated users should be met to develop confidence, trust and importantly retention.
Conclusion
We need to understand that different forms of trust exist, e.g. pre-purchase uncertainties and post-purchase uncertainties. It is important to understand what trust is, and why people start to develop trust for an organisation before anything can be done in order to gain and maintain it. Trust can be defined as a contrast of cognitive and emotional factors: cognitive factors such as providing the consumer with confidence that a transaction will be successfully and securely completed, and emotional factors such as aesthetic appeal and familiarity (e.g. familiar security protocols in place).
To develop the trust and retention of a customer, their first impressions of the design and User Experience of the website are important. In a follow-up, I'll take a look at how we can archive good first impressions and make them persist throughout the user’s journey.
References
Araujo.I, Araujo.I, (2003). Developing Trust in Internet Commerce. School of Computer Science. Carleton University. (Journal – p3, p4, p5, p6)
Interactive Media in Retail Group (2004). Trust Online – Facilitating Trust in Internet Shops. IMRG. (Journal – p3, p14, p20)
Martinsons.G.M. Explaining Dell's Success from a Strategic Management Perspective, last accessed 15/11/05. (Journal – p2)
Vatanasombut.B, Stylianou.C.A, Igbaria.M (2004). How to Retain Online Customers. Communications of the ACM. (Journal – p67, p66)
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About The Author
Luke Quinnell is a developer at Box UK, working with the Amaxus Web CMS. His main interests are PHP web development, User Experience and Information Architecture. He loves his cars and is a big fan of Formula One.
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- Congratulations to @ecrimewales! They've been shortlisted in two categories for the Nominet Internet Awards 2010: http://bit.ly/asrRIs Posted on 11th Jun by Box UK
Comments
47 comments
Jody Pirrello said... 20th Jan 2010, 19:24
Nice analysis!
I agree with your points and I'd also add user experience to the trust equation as well. You listed it in retention but a poor UX will also contribute to distrust - pages changing their look, switching between the brand's domain and their shopping cart's domain, mixing http and https and getting that awful popup warning, etc.
Regarding personal information and privacy concerns, a way to gain some trust in that arena is to integrate with a well known provider (e.g. using Paypal to process credit cards). The recognizable name gives the site some automatic credibility.
Looking forward to your follow up post!
John Maller said... 26th Jan 2010, 22:27
Very good blog article.
I completely agree with your comment -
"The study of customer buying patterns and personalization is becoming a popular method for retention. Large organisations such as Dell, Amazon and Tesco are examples of this. Dell employ strong methods to study consumer buying patterns, which allows them to provide high levels of customer support and can also be used to forecast future sales."
Emcien has made a science of this with their analytics product that automatically reveals customer buying patterns and trends.
http://www.emcien.com
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