Panel Q&A: How to Fund Online Customer Experience Initiatives

Without a clear indication of how a better customer experience will increase the bottom line, how do you prove the worth of such projects to your top bean-counters? E-commerce executives at several multichannel merchants and one service provider addressed this topic in a panel discussion at the recent eTail conference in Palm Desert, Calif.

Question: How do you show the value of a user experience project and get it funded?

It doesn’t need to be more difficult to apply an ROI on the user experience; you can monetize it. You can improve the look of your shopping cart and see higher conversion. We’ve done a lot of customer satisfaction monitoring. Ask yourself, what is improving that customer experience going to do for you [monetarily]?
— Jessica Weiland, senior vice president, marketing and customer care, Neiman Marcus Direct

We grew wildly fast during the first few years of our business. We invested in a lot of disparate ways to improve the customer experience on our site. We had to determine our value proposition and how we could communicate that to our customers. Focus on that value proposition and what it means to the bottom line. It’s easy to get distracted when you’re growing fast.
— Jacob Hawkins, senior vice president, online sales, Overstock.com

When you haven’t invested in the customer experience before, there’s always a feeling that you can’t prove the ROI that way. But once you start doing it, you’ll realize there’s an obvious ROI. Remember that you’re being compared not only to other online retailers, but to brick-and mortar stores. There’s no offline analog to “I couldn’t load the shopping cart” or “the page timed out.” You have to invest in things that allow the shopping process to happen smoothly.
— Geoff Galat, vice president, marketing and product Strategy, Tealeaf, an online customer experience tracking service

Question: How do you prioritize customer experience projects?

We prioritize based on expected ROI. It’s important to spec out the projects really well. We weren’t always very good at that. We’d look at projects and say it would take four weeks, then IT would get it and realize that all the pieces that needed to be put in place would make the project take three months. Now we have a better idea of what each project requires. But we also look at gross cost vs. gross profit.
— Hawkins

Question: Does the low cost, high return always get you the best site possible?

Most merchants go after the low-hanging fruit first, but there are problems that you can see coming that you have to tackle now before they impact the business two years from now.
— Weiland

With word of mouth and customer generated content, the cost involved in getting people to talk is very minimal. Web 2.0 is often cheap. My CEO gave me $10,000 for a blog project and I did it for $150. And for the recent holiday, we made $50,000 through the blog. Cheap and easy has worked for us.
— Pinny Gniwisch, executive vice president, marketing, Ice.com

You often have to look at your pain points and fix those things first. Some are easy, and some are hard. The best way to find those is to talk to your phone reps. You may have a project that’s low cost and high return, but you find out when you talk to your reps that it’s not really addressing problems your customers are having. If you use your customers as a bellwether for what to do, you’ll find the return.
— Hawkins