February 20, 2008: According to a new study, e-commerce satisfaction in the online travel industry falls for a second straight year. The three major online travel sites all suffered drops in satisfaction, as they continue to have difficulty differentiating their services.
Customer satisfaction with the e-commerce sector hits an all-time high, according to the American Customer Satisfaction Index (ACSI), released today by the University of Michigan with e-commerce partner ForeSee Results. E-commerce in aggregate rises to a score of 81.6 on the ACSI’s 100-point scale, a significant 2% jump from 2006. The e-commerce sector now outperforms all other service industries measured by ACSI.
“The improvement in e-commerce is impressive, given the downward trend in the national ACSI,” said Claes Fornell, head of the ACSI at the University of Michigan and author of The Satisfied Customer. The Index includes more than 200 companies in more than 40 industries and slipped 0.4% to 74.9 in its second consecutive decline. “E-commerce is the only sector to improve this quarter, and in fact reaches an all-time high in customer satisfaction while other some industries start to struggle.”
“Against a backdrop of weakening consumer spending and talk about recession, e-commerce will continue to be a bright spot for multichannel companies,” said Larry Freed, an online customer satisfaction expert and president and CEO of ForeSee Results. “Companies have to excel in their online channel: survival in this economy depends on customer satisfaction, because switching costs are low and an alternative is just a mouse click away.”
The ACSI E-Commerce Report, which is a part of the ACSI’s fourth quarter report, measures customer satisfaction with online retail, online brokerage and online travel companies.
Online Travel: Satisfaction Continues to Deteriorate
The online travel industry falls for a second straight year, dropping 1.3 percent to 75. The three major online travel sites all suffered drops in satisfaction. Expedia remains the highest-scoring company, but its score plummets 3.8 percent to 75. Travelocity and Orbitz both drop to 73, as the three companies continue to have difficulty differentiating their services.
Priceline employs a different model for its service and improves 1.4 percent to 73. But even the improvements in the “all others” category (+3.9% to 79) could not prevent the aggregate score from falling. The “all others” category includes airlines, hotels, and other travel search engines like Kayak.com. Travel suppliers like airlines and hotels are putting pressure on the three major travel sites. Airlines are now offering hotel and car rental options in addition to lowest-price guarantees and loyalty and rewards programs, and hotels encourage customers to book directly on their sites.
“For the last 10 years, the technology that online travel aggregators use has essentially remained unchanged, but competition continues to innovate,” said Freed. “Standing still is not an option. As the smaller players change the game, satisfaction with the big players will decline if they just tread water.”