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Turning Web Browsers Into Buyers

Strategies to reduce shopping-cart abandonment and keep prospective customers on your site longer
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Imagine you owned a grocery store in which roughly half the people who loaded up shopping carts suddenly left them full in the aisles and took off without buying a thing. Most merchants would consider that a crisis, but on the Web, it's the norm. The median abandonment rate is 40 percent for consumer-products companies and 58 percent for service companies, according to a recent survey by MarketingSherpa, a research firm based in Warren, Rhode Island. During periods of economic decline, shopping cart abandonment tends to spike, because potential customers jump to other sites to check prices or simply decide not to buy.

Paying attention to shopping cart abandonment can be depressing -- learning that you are being constantly rejected by a huge percentage of customers doesn't feel good -- but it also represents an opportunity. These shoppers, because they are one step away from giving you money, are often the potential customers who are the easiest to convert into real ones. "For any site that does e-commerce, this is the first thing you should look at," says Reid Carr, the CEO of Red Door Interactive, a San Diego Web consultancy. Here are a few ways to turn abandoned shopping carts into sales.

1. Measure

Cost: Free
Degree of difficulty: Low

Reducing the rate of shopping cart abandonment begins with keeping track of it. Start by setting up an analytics program -- Google offers a very good one for free -- to track which pages on your site frequently cause people to leave. What should you zero in on? Avinash Kaushik, a Google Analytics expert, suggests breaking abandonment into two metrics: "cart abandonment" -- the percentage of people who put something in their carts but leave before the checkout process -- and "checkout abandonment" -- the percentage of people who begin checking out but leave before paying.

2. Simplify the checkout process

Cost: Free
Degree of difficulty: Moderate

Once you have established your rates of abandonment, start by focusing on the checkout process, given that it's relatively easy to fix. Luke Wroblewski, the author of Web Form Design, recommends that companies dump any sections that are not essential to the sale -- for instance, requiring customers to create an account or provide a cell-phone number. When asking for personal information, like an e-mail address, explain why you need it and what you are going to do with it.

3. Redesign your site

Cost: Free if you do it yourself; $20,000 or more if you hire a consultant
Degree of difficulty: Moderate

Redesigning your entire website can be pricey, but sometimes even minor changes can yield big improvements. One common recommendation is to display the shopping cart -- and its contents -- on every page as a reminder. That change, along with some other improvements, helped PlanetShoes.com, a $9 million retailer based in Waltham, Massachusetts, shrink its abandonment rate from 66 percent to 50 percent.

Customers may leave a site for a variety of reasons, but one of the biggest reasons for ditching carts is discovering high shipping costs, says Carr. He recommends offering free shipping. If you can't do that, design the product page so that customers can calculate shipping costs before they put items in their carts. But, Carr cautions, don't make any changes without testing them first. When you make a change, try doing an A/B test -- in which customers are randomly sent to either the new page or the old page -- to see what works best.

4. Follow up

Cost: From free to tens of thousands of dollars a year for more advanced services
Degree of difficulty: Moderate

If a customer has already created an account and then abandons a shopping cart, it's possible to follow up with an e-mail. "When you're on a retail sales floor, you try to talk to customers who look like they're going to buy," says Steven Harris, the head of marketing for Cable Shopping Network, a $40 million collectibles company based in Scottsdale, Arizona. "Sending a follow-up e-mail is the same thing." Harris pays $4,000 a month to an Indianapolis marketing company called ExactTarget, which automatically sends follow-ups to shopping cart abandoners. The e-mails ask abandoners if they had technical difficulties and offer a discount if they complete their purchases. Harris says he has been able to generate an additional $250,000 in revenue a year from the e-mails.

These sorts of services are costly, but you can save thousands of dollars if you are up for writing the e-mails yourself. SeeWhy, an analytics provider based in Andover, Massachusetts, recently launched a free service that provides e-mail addresses of customers who abandon their carts. SeeWhy founder Charles Nicholls recommends that follow-up e-mails focus on resolving "technical difficulties" that occurred during the purchase rather than simply giving a sales pitch. He suggests waiting at least 10 minutes before you send the e-mail. "Otherwise, it can be spooky," he says. Be sure to include a prominent Unsubscribe link at the top of the message.

5. Get up close and personal

Cost: At least $10,000 a month
Degree of difficulty: High

One problem with follow-up e-mails is that most customers probably will ignore them -- open rates can be 30 percent or less. Behavioral targeting is harder to ignore. It involves showing advertisements to shopping cart abandoners as they surf the Internet. A dozen companies offer this service, one of the largest being AudienceScience, which boasts a network of more than 10,000 sites. When customers access your website, they automatically download a cookie, a small data file that allows them to be tracked. Once they abandon their carts and visit another website, they see one of your ads.

Behavioral targeting has come under fire from privacy advocates and lawmakers, so companies should use caution when setting up a campaign. AudienceScience CEO Jeff Hirsch says companies should be careful when showing ads that get a little too personal. Although your customers might like to be reminded about good deals on digital cameras, they may take offense if they suddenly see an ad for the baldness pills they had been about to buy a few minutes earlier. "Keep the message generic," Hirsch says. "Otherwise, an ad can become an affront."

IMAGE: Eliane / Corbis
Last updated: Jul 1, 2009




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