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October 07, 2008

A glimmer of hope for feedback, yet DSRs are still a shaky Jenga tower

Things are tough in eBayland right now
For the last two weeks, I've been talking to literally hundreds of large eBay sellers to check in, see how their sales are doing, discuss strategy and share ideas+best practices around big change like FP30.  This is an annual process we go through at ChannelAdvisor to make sure everyone is ready for the holiday selling season. 

The overall mood isn't very positive as you can imagine and the one thing that keeps coming back up (as it should) is that eBay has built many of the recent programs (FVF discounts, best match, etc.) on the wobbly DSR system that leaves sellers scratching their heads and unable to make improvements.  For the record, I think the DSR intent is good - clean up the marketplace, reward great sellers, get rid of bad sellers.  I am 100% on-board with that program.  What's painful is that the current DSR system is missing the mark in many ways and causing large great merchants to either jump through too many hoops or leave all together.  In fact, the calls are frequently met with what can best be called apathy.  "Well it doesn't matter, my DSRs will keep me from doing X, Y and Z"

Dear customer, your overall grade is a 'C'
One seller used an analogy that really hit home for me - todays DSRs are like going to school and all you get is a report card with a single 'C' on it. You really want to make A's, but you can't see the individual test grades or even the subjects you are doing poorly in, just that your overall grade is a C.  The end result after dealing with this system for 9+ months without any improvement/visibility from eBay is that you resolve yourself to the C, give up because you can't possibly guess how to get to a B, much less an A and ultimately diversify to more transparent channels where you can control your own destiny, or even if you are partnered with a marketplace, you are given transparency and can improve any processes needed to have a better consumer experience.  It seems obvious, but transparency (e.g. knowing which customer/product had a problem) is good for everyone in a healthy marketplace.

Here's a perfect real-world example.  I was talking to one customer (top 100 eBay seller by GMV) and instead of questions about FP30 or how to grow their business this holiday, they wanted to brainstorm some ideas of how to deal with having a 'lowered' search standing.  To their credit, eBay implemented a snazzy dashboard that provides the 'your grade is a C' level of transparency but it stops there.

This seller noticed their search standing is 'lowered' because of a sudden dip in sales, checked the dashboard and saw why and then had to call their TSAM to get more information. It turned out that there's a rule (I vaguely remember this one, but can't find on the site - I think it was called buyer satisfaction level or something?) that is part of the umbrella Seller Non Performance policy (SNP in ebay-speak) that in addition to maintaining the 4.3 on all DSRs, if you get too many 1 DSR scores your search standing will be lowered.  This doesn't show up in the dashboard and you have to be told it's going on when your search standing is lowered. 

This seller has 4.6+ on all DSRs, yet eBay refuses to give the seller any more information than 'you are receiving 1's'.  The seller would love to know answers to basic questions like: "Which of my products have this issue?", "Is this geographically specific - e.g. non-domestic?", "Is there a correlation between low feedback buyers and 1's - can I block them?", "Why are customers leaving me 1's, leaving me positive overall-feedback,not contacting me, yet clearly are not happy?", etc.  The seller has given up and has accelerated their move from eBay because eBay's message is pretty loud and clear here: "You are making 1's and we want you off the site."

Another seller has free shipping and can't crack 4.7, another seller can't break 4.5 because half their business is non-domestic, I could go on and on with stories like this.  I would say out of the top 1000 eBay customers, probably a solid 80-90% suffer from a major DSR-related issue.

First, the good news

There is a glimmer of hope.  Lorrie Norrington announced at eBay live that eBay would bring back a system to replace the mutual feedback withdrawal  (MFW in eBay-speak) by the holiday sellling  season.

MFW was a decent system for customer-service focused sellers because it allowed sellers to say to buyers that left a negative : "Hey you had a bad experience, I want to make that right.", then execute on that and be rewarded with the effective expunging of the negative should the buyer choose to do so.  In May 08, eBay's Trust and Safety dept canceled MFW because it was allegedly being abused by bad sellers to extort feedback from buyers, etc.

eBay has been quiet as we waited and today via a developer blog post announced that it will launch what is now called Feedback Revision (FR anyone?).

  • AU will be the first market to launch on October 13 (Let those noisy Aussies work out the bugs - :0 ).  The AU site has the best information on the new process and has a good help file here.  Tamebay has a good summary here.
  • US will launch on October 20.  Of course none of this good stuff will be available via the API so high vollume sellers will have to MANUALLY manage this process (weeeee!) if they can get their myebay to load, etc.
  • No word on the UK or rest of EU that I can find.

It remains to be seen how well this new process will work, but the important thing here is eBay listened to one area of concern and has reacted relatively quickly which is a positive.

Scot's Top 5 DSR reforms needed ASAP

Since eBay is in the mode of improving things, I wanted to share with everyone the top 5 (yes there are more, but let's get them to focus on the top 5 first!) major DSR issues that need fixing ASAP. 

  1. Transparency is better for everyone - Give sellers some ability to slice and dice their DSR ratings by product, by geo, etc.  Many sellers sell 10k+ products into 5+ geographies. Give them the tools to delight buyers vs. make it impossible to delight customers.  This is a no brainer - kick bad sellers off, keep good sellers and give them the tools+data they need to deliver a world-class customer service experience.  eBay is only hurting itself here and DSRs are actually hurting the buyer experience.
    • FYI - eBay's TnS dept refuses to provide this transparency arguing that sellers would use it to retaliate against buyers vs. improve the buyer experience.  This is easy - provide the data and if any seller retaliates, kick them off eBay and keep the sellers that use the data the 'right' way.  The current policy basically says to me: "We have evil retaliatory sellers we are going to keep on the site, but take some of the tools they use for evil away." This mindset makes absolutely no sense to me.
    • Back to my report card analogy - Imagine this: "the School is  afraid that sharing grades with students will cause teacher retaliation. Students will suddenly want to know why they made a D on a test, why their essay was off the mark, etc."   Seems silly right, well ecommerce and retailing in general is a learning experience - what products do buyers like, what do they hate, what policies, etc. 
  2. Where else can the adverb 'Very' put you out of business? - the wording around 4 stars is painfully bad (Accurate/Satisfied/Quickly/Reasonable) vs. the 5's which are currently (Very accurate, Very satisfied, Very quickly, Very reasonable).  I understand the bell curve, but telling Buyers a 4 is reasonable/5 VERY reasonable and then holding sellers to a 4.3 is feels unfair and is the single largest source of seller angst around DSRs with sellers of any size.
  3. Fix International DSRs - While eBay claims that international DSRs account for only a .02 difference in DSRS, I've seen sellers with 20-30% non-domestic sales and those transactions impact them by .2-.5 (yes a whole half a star!) in both S+H cost and time.  The problem is international buyers love a great deal, but when they see their customs bill they get cheesed off and ding the seller. The kinds of sellers we want in the market aren't going to violate customs rules (which eBay is effectively encouraging with DSRs), so you have the unintended consequence of punishing the exact honest-A+++ sellers you want to keep.
    • Easy fixes abound on this one - either give immunity around non-domestic transactions on these two DSRs or give some kind of inflater or even better, educate buyers that the item they are buying will be subject to customs, do they understand this?  Even better - implement software for including customs calcs in the whole transaction so we avoid the train wreck all together- wouldn't that be awesome?  Again - transparency is the way to go in all ecommerce transactions.  Is it a great buyer experience to order a $200 diamond ring and then to have to learn your customs are $75?
  4. Get rid of the shipping time DSR and measure this with software - eBay knows when the buyer clicks the 'pay now' button and when an item ships, so make this a software measurement and set a bar and hold sellers to it, vs. a survey.  Of course as a buyer, I always want things to a) ship faster and b) ship cheaper - duh!?  This is like a survey from the IRS - were your taxes too high Mr. Tax payer?  This is probably too radical for eBay to consider, but they really should.  It's time for some radical behavior.  To quote Tina Fey: "Let's get all Mavericky in here!"
  5. Nuke UPIs - I'm convinced that the UPI process is just so broken that it needs to go away totally. If eBay won't take that step, at least stop buyers from the ability to leave negatives or worse postives+1 DSRs. (Also probably too Mavericky)


Call to action
For you sellers out there with a TSAM or access to eBay management, we need to work together for the longevity of the eBay ecosystem on these 5 fixes or I fear that eBay will continue to lump more and more programs on top of a wobbly DSR foundation and if you've ever played Jenga, you know how that plays out.  Right now these DSR flaws make the eBay Jenga tower feel like it has one little crooked block and is 20 stories high and the wind is blowing at 20mph.

SeekingAlpha Disclosure: I am long eBay and Google



 

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