Attention online merchants: Your customers’ patience for technical foul-ups getting in the way of their purchases is wearing dangerously thin.
The reason: As e-commerce site experiences continue to improve, customer expectations improve right along with them.
The good news is that online shopping-cart-abandonment rates have decreased dramatically in 2007, to 52% on average from 60% in 2006, according to MarketingSherpa’s latest E-commerce Benchmark Guide.
One reason for this pleasant drop in abandonment rates is that marketers have increasingly taken control of closing the deal, MarketingSherpa finds. “In the past, carts were more a function of the tech team than of marketing,” said the report. “Marketing and merchandising got the shopper all the way to the cart and then tech took over. However, over the past two years, we’ve seen a surge in marketers tweaking cart design.”
The bad news is that online shopping still has some glitches, and customers are less and less inclined to put up with it. Nine out of 10 consumers have experienced problems completing transactions online, according to a recent survey conducted by Harris Interactive on behalf of Tealeaf Technology.
Forty-two percent of those who experienced problems when conducting transactions have switched to a competitor or abandoned the transaction entirely, according to the survey. And 52% of those who received bad customer service from a merchant after experiencing problems with their sites have stopped doing business with the company altogether.
The stakes are rising, too: Forrester Research estimates 2007 online retail sales at $157.4 billion and projects the number to grow to $271.6 billion, or 9% of retail sales, by 2011.
“We’re in a perfect storm, as users’ dependency on e-commerce grows and their patience for bad online experiences wears thin,” says Rebecca Ward, CEO of Tealeaf.
The simple answer to the so-called perfect storm is, of course, making it as easy as possible for customers to finish their transactions online. Don’t distract them and don’t get in their way, say the experts.
Fair enough. But what are some of the concrete steps a merchant can take to lower abandoned-shopping-cart rates and close more sales?
For one thing, don’t force shoppers to log in to buy something, says Larry Kavanagh, CEO of e-commerce design firm DMinSite. Make sure people can shop using “guest checkout.”
“The IT folks will look at this idea and say: ‘What a waste. The only thing you’re not asking a customer for is a password,’” says Kavanagh. This is true indeed. A checkout process requiring people to log in does require only one more piece of information than allowing them to checkout as guests.
But for whatever reason, when a guest-checkout function is added to an e-commerce site, conversion-to-sale rates go up — dramatically.
“The magic of guest checkout is the psychological aspect,” says Kavanagh. “Even though they still have to enter their name, address and all their other information, psychologically, it still makes a big difference to them to think that they’re not having to register.” It’s not unusual to see a 20% to 30% increase in conversion-to-sale rates simply by adding a guest-checkout feature, he says.
Graeme Grant, chief operating officer for e-commerce technology provider Allurent, adds: “Absolutely, you’ve got to add ‘check out as a guest.’ We find that is the most important way people want to check out.”
For example, when Ulla Popken recently added guest checkout to its Website, the women’s apparel merchant experienced an online sales increase of nearly 25% in less than a week, according to Kavanagh.
Clear the path
Another step multichannel merchants can take to increase conversion rates at checkout is to eliminate distractions, says Kavanagh.
“Removing any link that allows someone to go somewhere other than the next step in checkout is going to increase your checkout percentage,” he says. You might think you’re helping them if you provide an FAQ link or a link to go back to the category, “but all you’re doing is distracting folks,” he says. “You want them to be narrowly focused on just what it is you’re trying to accomplish, which is the checkout.”
According to Grant, in the drive to accomplish fairly common goals — such as collect registrations, sell gift cards, offer multiple ship-to options — the core goal of the checkout process often gets buried.
When you try to cover all those different options, “the user’s core [objective], which is: ‘I don’t want to register; I want to give you my credit card and I want to go,’ gets very hard because there are so many elements junking up that core path,” says Grant.
But what about cross-selling and upselling during checkout? Is that a mistake?
“First, get your checkout as clean and as high converting as you possibly can” by removing any and all distractions, says Kavanagh. He adds that several analytics packages make it possible to see where online transactions are breaking down so you can take steps to shore up the process.
“Today’s best practices are actually pretty simple,” he says. Through the free Google Analytics or any of the other more expensive analytics packages, “you can look at what people call a shopping cart funnel. You can keep track of what people do from the time they hit ‘proceed to checkout’ until they actually complete an order.”
Beyond analytics packages, there is another source of information on why online transactions break down that not nearly enough merchants take advantage of: the customers themselves.
“If you’re looking at your analytics and you’re baffled about why you’re losing people, you’ve got the name, address, city, state, zip, and phone number on a bunch of folks who abandoned,” says Kavanagh. “Call ’em up and ask them what’s going on.”
He warns, however, that before calling someone who abandoned a shopping cart, the merchant should check order-history records and make sure the customer didn’t simply make the purchase through another channel.
“I’ve seen many times on business-to-business sites where customers have hit that final page of checkout, and then they actually print it out, transfer it to a P.O. and fax it in,” says Kavanagh.
Once a multichannel merchant has got an analytics package in place and is sure the checkout process is as clean as possible, try adding maybe a cross-sell and see what happens. “You will probably lose some people because of it,” Kavanagh says. “The questions is: Do you gain enough in the increased average order size to make up for what you’re losing?”
|Embrace abandoned-cart e-mails|
Another fairly straightforward area where online merchants can take steps to close more sales but aren’t, is abandoned-shopping cart e-mails. And no, they won’t freak people out if they’re done right, says Kavanagh. He recommends a three-part series. The first should be an e-mail that goes out within a day that looks to be from a Web administrator.
The e-mail should note that the customer abandoned the cart and ask if there was some sort of technical problem, offer a technical-assistance phone number if there was, and a link to the cart to complete the purchases if there wasn’t.
“The No. 1 reason people abandon carts before they checkout is they get distracted by something,” says Kavanagh. “E-commerce shopping mostly occurs between 9 a.m. and 5 p.m. on weekdays. You know how it is; you’re shopping and then suddenly an I.M. [instant message] appears or your boss comes up behind you, and you get distracted before you make the purchase. This is why abandoned-shopping-cart e-mails are so fundamental.”
The second abandoned-shopping-cart e-mail could be a simple reminder saying: “Did you forget something?” with the contents of the abandoned cart displayed. The third abandoned-shopping-cart e-mail Kavanagh recommends is a play on the old “this might be the last catalog you get from us” cover.
“The abandoned-cart e-mail twist on this strategy, however, should say something like: ‘From time to time we delete shopping carts; if this is something you want, please come back and buy it within the next couple of days or call this number and finish,’” says Kavanagh. “Of course, you don’t really delete carts,” he adds.
One reason more companies don’t send abandoned-cart e-mails is the difficulty in figuring out who should send them. For example, if the merchant determines the e-mail service provider should send them, then there is the challenge of delivering cart data to the vendor.
Kavanagh says that whoever sends order confirmation e-mails — likely the e-commerce platform provider — should also send the abandoned-cart messages. “Whatever utility you’re using to send confirmation e-mails, just filter into that your abandoned-cart data and let that create your series,” he says.
According to Allurent’s Grant, another reason people abandon carts is sticker shock, which can be avoided simply by letting them know the price before they get there.
“It’s not as common as it used to be, but it is just terrible that people can’t really see the full price until they get to the cart,” he says. “Often, the only reason they went to the cart in the first place was to find out the price. Now, some people will say you would have lost that customer anyway, but I don’t agree. I think there’s value in setting expectations. It always helps you convert more.”
He adds that customers should be able to see the contents of the cart right up until they hit “submit order,” and be given the opportunity to change those contents.
“If you aren’t able to edit your cart at the point of submission, which is the first time you’ve found out how much it’s going to cost, that’s a problem,” he says.
Usability testing is also imperative, says Grant. How often? “Every time you make a change,” he says. “It’s not that hard to go down to a Starbucks, offer a $5 gift card and get 20 people. It doesn’t have to be major. And it doesn’t have to be demographically or statistically significant to get a sense of whether it’s going to work.”
He adds that it is also imperative to use some sort of analytics package to see where the checkout process breaks down.
“Marketers spend so much to get people to their sites,” Grant says. “Once you have them, you just can’t screw that up.”