Put an end to shopping cart abandonment. Check out an easy way to get a second chance to make the sale.
While buying some software online from Hagel Technologies Ltd., I recently came across a marketing strategy that was smart, efficient, and applicable to almost any e-commerce operation. It was an automated counter-offer that gave the company a second chance at making the sale.
This technique addresses a major aspect of shopping cart abandonment. People go to a website, begin to place an order, and then abandon the shopping cart. How frequently? Anywhere from 60 percent to 80 percent of the time.
This often happens because the seller has hidden some important information--the cost of a product or shipping expense--and displayed it only once the buyer reaches the shopping cart. The theory goes, that by moving someone into an order form, you increase the chance that the prospect will complete a purchase rather than simply collecting information without being asked to buy. But it doesn't always work that way in practice.
In my case, I had used a trial version of some software, was getting so-called nagware messages to buy, and started to think about paying for a copy. Clicking on the purchase button, I was taken to the company's site. However, the prices seemed significantly higher than I thought was reasonable for what the package did.
So I decided to head off, except the e-commerce portion of the company's site didn't let me do that immediately. Instead, it asked whether I wanted to buy the software at my price, provided that it was one the company was willing to work with. I put in a low price, which the site rejected. But it came back with what the company was willing to accept. That amount, between the original price and what I offered, seemed fair and I bought.
Clearly, Hagel knew the price that it wanted for the software might seem too high for a significant portion of customers. At the same time, management clearly did not want to lower the price if someone was willing to pay more. So someone wrote some code for this back-and-forth.
The company had a floor price in mind. Any offer at or above the floor price would be accepted. Any offer below the floor price would be rejected, but the consumer would then be offered the floor price. Not all will bite, but Hagel reduces the number of sales it might lose and boosts its revenue by having a range of prices rather than a single low one.
Although you might immediately think, as did I, that this would only work for software, ebooks, and other intangible products without an incremental cost of goods, that isn't the case. A company with a manufactured product would simply set the floor price at a level that covers the cost of the product and a minimum acceptable margin.
Best of all, you don't need to buy an additional software package to make this happen. Your tech team can insert the basic coding into your site. Then you just need to experiment to find pricing that works.