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"Christian Sarkar is a master at using online media to generate a strong return on marketing spend. He provides a rare combination of design for usability skills and clear understanding of the economic levers driving marketing performance. His unique approach to Double Loop Marketing builds upon the virtual community concepts I outlined in Net Gain. Christian brings proven experience in helping vendors cost-effectively find and convert prospects to customers . . . and then building in the feedback loops to rapidly improve performance over time."
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Interview ---

Creating The Loyal Customer:
Interview with Jakob Nielsen

by Christian Sarkar

Worst practices unveiled! An interview with web-usability guru Jakob Nielsen on building customer loyalty online.

Successful websites keep track of you without getting in your face. They collect their information and don't poke about in your private business. But ultimately, they get the goods on your likes and dislikes and, as a result, they come to know you better as a customer.

According to Jakob Nielsen, that's how the really good websites keep their customers faithful. He should know: in the world of the Web, Nielsen is the "usability guru." He's on the inside track when it comes to knowing what makes websites user-friendly - and what sends potential customers running for the nearest cyber-exit.

Christian Sarkar spoke with Nielsen about what it takes to build customer relationships and customer loyalty online.

Back in 1996, you predicted that the key to website survival was going to be the establishment of relationships between websites and their users. Does that statement still hold true?

In many ways, I've been almost vindicated. Websites still exist that don't know anything about their users: you just go there and read articles. But successful websites aren't like that.

A successful website keeps track of you: the second time you go there and order, you don't have to type in all your information again. You may receive e-mail, but only if you've asked for it. Those types of things. So I really believe that my prediction has mainly come true: that the Web is really a narrowcast medium, as opposed to a broad-band or broadcast medium. It's a way of connecting to people directly.

You make a clear distinction between customization and personalization. You say people don't have time to spend filling out registration profiles, and that the way to gather customer information is through successive interactions.

I still believe that. A lot of usability studies have found basically one overriding factor about Web users: they are very impatient. They just want to get going, get something done, click and get out.

Is that the "paradox of the active user?"

It really is. Many times, if they would just spend a little more time setting up profiles, they would be better off in the long run. But people just don't think about the long term, and it's time for us to recognize that.

Also, the longer the registration forms you give people, the bigger the drop-off rate. So if you give people a very short form, and then collect extra information as you go along - at appropriate times, say: "Oh, here's one more question," that's actually okay at this stage of the relationship, and it's a much more productive approach.

Are you saying that content should be free?

I'm saying it should be possible to get into it free. Then you can start adding charges for various services, but very incrementally. In other words, I don't recommend an all-or-nothing subscription fee - kind of an all-you-can-eat approach. But the downside then is that people don't get to sample the buffet. So if you want to give people some free appetizers, for example, they can then order services one at a time. "Do you want dessert? If you do, you pay extra for that value added."

It's like the difference between the New York Times and the Wall Street Journal?

That's a great analogy. Again, it goes back to my basic principal, which is, "If you put a big hurdle in front of people, they're not going to jump over it." You should have a very easy registration for people to get into the site.

Do you have any thoughts on what kind of content should never be personalized, versus what should? When is it never a good idea to personalize?

If a form asks what kind of business you're in, and you can say, "manufacturing," that's so broad that it isn't intrusive. But if it asks something like, "Has your father ever had a heart attack?" that's the kind of thing that's really personal, and people don't want to answer. You have to build up your trust over a very long time before people will part with any of that highly personal information.

There's a second kind of thing that I don't think should be used -'s book recommendations, for example. They do many things right, but the books a person cares about can vary quite dramatically. One day they're online to buy books for their friend or uncle or somebody who has very different interests, and because of that, Amazon can't accurately predict what that person likes. From the data you can collect, you can't necessarily tell what this person's interests are.

What about giving users choices based on the very design and layout of the site? If they like something, they click on it. If they don't, they don't.

You always have to design a great default. There's no excuse for not having a good design. Don't say, "The users will adjust," because many of them won't. If the default looks bad, or if it's awkward to use, customers will just leave. So the default always has to be as good as you can possibly make it. That will take care of the people who don't want to customize. Secondly, you can make sure they aren't hit with huge forms in the beginning. Allow people to come back, if they choose, to the "tweaking" features, the customization. But it should never be an either/or proposition.

I also strongly recommend that they say they're not going to release any personal data about users. You have to state it explicitly, or people are going to think that every single thing they click on is going to be revealed to some outside party.

Can you give me some examples of sites that do use personalized strategies? I don't like the book recommendation feature very much, but I do like the one-click ordering. That basically means that every single page has been personalized to know who I am and where to ship the book, if I want it, and to know which credit card to bill. So it's pretty simple. At the same time, it's hugely useful and, of course, it also leads to more sales.

On a site like Motley Fool, the financial service, you can build up your portfolio so you can keep track. You can see not only what the stock market's doing, but what your investments are doing. I think that's a very nice twist that I'm sure a lot of people find very valuable.

About customer relationships: there's some controversy over whether customers should opt in or opt out. What do you think?

I think you should have them opt in, because if you have the box checked by default, and people forget to uncheck it, they're just going to be annoyed when they get a piece of e-mail they don't want. It's about permission marketing. Permission means that they actually gave permission; it doesn't mean that you tricked them into giving permission. Otherwise, it's not really permission -- it just means that they didn't know what they were doing.

You want to send people e-mail they want to get. As e-mail keeps flowing, and people get more and more, it becomes critical to narrow it down. This means that instead of having a single check box, you might actually want to have a few -- maybe two or three different check boxes for different types of newsletters people might want to get. If you have an all-or-nothing choice, you will find a lot of people going for nothing.

And then you've created customer disloyalty.

Exactly. You've created a need for customer service. Now you'll have to manually take them off the list, because people don't understand instructions about how to unsubscribe. This is another law of nature: you can put it into the mail as many times as you want, but few people will actually follow those directions. Users in the real world basically don't read instructions. If they get a piece of e-mail they don't want, they just hit reply and say, "I don't want this. Take me off the mailing list."

Tracking customer knowledge on your website is one thing. What about customer knowledge across the brick-and-mortar stores, in the old-fashioned call center? Is this integration happening?

There should be much more integration. It should be possible for people to look up stuff on the Web. If they placed an order over the phone, they should be given some kind of tracking code so they can then go to the website and look at the order's status, without having to call again. Basically, you should allow people to use whichever of the two media they prefer for any given situation. That means that the two have to be integrated. As far as I know, however, they're almost always separate, and don't talk to each other. There's no integration of the database side, either, because they have some kind of legacy system for the call center and some new system for the website.

As far as customers are concerned, it's like two different companies. A particular horror story that my sister experienced was with United Airlines. This was half a year ago now, so they may have improved. She had booked a ticket at the website, [and] she had to change it. So she tried to go to the website, but at that time, the site didn't offer the option to make changes, only to book tickets. So she called up United Airlines customer service and said, "I have this ticket booked. Could you please change it?" You can always do that if you have booked over the phone. But the customer service rep said, "This was booked through our website. We don't know how to handle that." So she was transferred from one person to the next and spent almost an hour dealing with the simple task of changing her travel time from Wednesday to Thursday.

Let's talk about distributors and suppliers, and the kinds of relationships from those sides. If these are your official partners, they will be willing to create profiles and fill out process forms. What do you see happening in that area?

In many ways, that's almost the most important area, and those relationships are just as important as customer relationships. Customers often don't have much motivation to talk to you, because there are hundreds of other companies they want to talk to as well. Your actual partners have already decided they're going to deal with you, so they're much more motivated.

They also know they're going to come back frequently, because they have this ongoing relationship. All of those are reasons why they are, in fact, going to be more motivated to go through a more elaborate integration with your website. Even so, they shouldn't be required to spend forever on the process. But if you're comparing them to your customers, you can give your partners more features and longer forms, because they know it's going to be worth their while.

Copyright Christian Sarkar 2004-2005. All Rights Reserved.