A colleague forwarded me Andy Beale’s excellent Marketing Pilgrim newsletter (a newsletter/website dedicated to online marketing, SEO and strategy) and it had a standout figure.
48% of online shoppers bail at the checkout.
48% might seem a high number – after all, very few customers in the real world bail from their purchase once their goods are on the counter – though it is easily explained:
1. The eCommerce shopping process is obviously very different to the real-world shopping process and we are far more committed to entering our pin by the time we have made it to the counter at our local Bunnings. It is just too easy to build a shopping cart, click checkout and then leave altogether without another thought.
2. eCommerce websites are often used as catalogues for pricing and cost analysis purposes; users either have no intention of buying, will buy at a later date, possibly from another shop or will buy offline. Every designer at my firm has visited Apple’s website, configured a Mac Pro with eight Xeon chips and 16GB of RAM merely to gasp at the price; Apple continue scratching their heads.
3. Poor website usability: freight pricing complexity, bad form design, requiring a customer to register a password/account before they can buy, too many steps (I just wanted to buy a monitor and I’m at checkout page four of six!), poor instructions and warnings:
*Enter Area Code
*How did you hear about us?
*SURRY HILLS (VIC)
SURRY HILLS (NSW)
SURRY HILLS, SYDNEY (NSW)
Users cannot complete the transaction or just plain give-up.
4. Lack of trust in the security of the checkout.
No doubt there are others – the shop doesn’t take AMEX? – though the above mentioned are the greatest contributors to customer drop-out.
How to improve
The principal point of this blog is to help online businesses improve their checkout and checkout process. There is a lot of rationale and discussion, mainly to assist in understanding users and why they are churning.
Improvement of the checkout process and customer conversion should be an strategic effort of any business; customer churn is the bane of any retail business and no business forgoes a potential customer if it can be avoided; it comes down to nothing more than sales and revenue. Similarly, if the acquisition cost of a customer can be dropped –through higher conversion rates of customers – this directly affects the bottom line.
It is even more important if there is investment in traffic generation; SEO, SEM or online advertising. Indeed, efforts to improve customer conversion should come higher than efforts to drive traffic; get the shop right and then find the customers, not the other way around. Otherwise, it is merely wasting money. There is a frightening rush of corporate money into SEO and SEM at the moment and I fear far too many businesses are investing in traffic without focusing on their websites first.
While this blog is meant to focus on improving the checkout and checkout process specifically, before moving on, let me clarify three points and make a two more:
1. I am making the necessary distinction between the catalogue and the checkout. In making my points, I am basing it all on users that have clicked checkout and not those that have only added a few items to the cart, stop. Many users can work out the price of a purchase without needing to advance to the checkout, though many users cannot – for sake of this article, I am not focusing on advanced eCommerce users but the broader base of users that go through the motions to the point of checkout, mainly to cost their purchases, and those that dropout because of the checkout itself.
2. The estimate of 48% reflects a cross-section of online shops, and the numbers will vary from shop to shop. Someone that gets to the checkout stage of buying an iPod or Xbox Game is presumably armed with pricing/availability knowledge, understands exactly what they are buying, knows it fits in an overnight bag and is probably committed to buying. These are knowledgeable eCommerce buyers, looking for the lowest price and unlikely to buy in the product in question at a mainstreet store.
On the other hand for example, clothing websites and websites selling stock images would experience higher drop-out rates at the checkout because users are ultimately frightened off at the underlying fear of receiving their frock two sizes too small, or are presented with a price outside of their expectation or budget (I am specifically referring to stock image websites in this regard, though many others fall into this category). Some products are better suited to eCommerce than others; time will change this to some extent, though I am writing this in 2007.
The point is that the 45% number will vary from website to website and industry to industry, and should not necessarily be a benchmark.
3. Confidence in eCommerce security is significantly increased on only a few years ago. Today, customers that are at the checkout point are probably not the crowd that hold reservations about the integrity or safety of buying online, and I don’t think it is a factor for businesses to become too concerned about.
4. Tighten any SEO, SEM or online advertising/affiliate marketing strategy – there is just no point in paying to attract users that aren’t customers anyway or delivering them a different message to the one of they saw on the website before yours. This is a much bigger discussion, though it is a very important point and needs mentioning.
5. A friend of mine owns a streetware shop in Coogee, Sydney. He told me a while ago that one in ten customers actually makes it to the checkout; they are mostly just browsing and cooling time in his shop.
For sake of argument, assume this number holds true online as well; for every person that actually clicks Add to Cart, nine never make it past browsing the catalogue. Could this be improved with better POS, discounts and incentives plastered around the shop?
Improve the transactional nature (and creative) of the online catalogue, improve messages, focus on the design and ease of the catalogue, and make campaigns timely, exciting and compelling. Make every effort to compel the user to buy and stop browsing. If the customer was never going to buy, they were never going to buy (possibly for reasons outlined earlier), though they were not a customer in any event.
It is instead that percentage of customers that might have purchased, though just could not find the reason to even begin the process.
Know your moving as many customers as possible to the till.
Having established all this, before making any creative or functional improvements to the checkout itself:
1. Get the best, most relevant reporting possible. Assumptions are only that, while statistics are statistics. Who clicks where, what search terms lead to the highest conversion rate, is there a shopping cart size at which users noticeably drift off?
2. Establish easily understood goals of the shop; goals make it very helpful to focus and then analyse efforts. It also helps to accurately understand the acquisition cost of a user.
As a starting point, Google Analytics is free software, works seamlessly with their AdWords (SEM) technology and easily integrates with most websites; it features a goal feature – say from the landing page to the checkout – and allows for very easy tracking of website goals.
Once done, focus on the checkout itself, and consider every reason for why a user might be leaving at this point:
1. Consider the overall usability of the checkout. Ensure that every possible question the user might have at this point is answered. Let users have one more peek at the product without sending them out of the checkout process. Never underwhelm, overwhelm or fail to meet an expectation.
By the time we get to the checkout, most of us just want to move on, and this is not the point at which to test patience or cause confusion.
2. Make freight pricing easy, and as far as possible, standardised. Online delivery (images, licenses etc) is no different.
3. Reduce the checkout steps as far as possible, and make all forms a real pleasure to complete. Excellent form design is a real art and a worthwhile investment. Have a friend try and buy one of your products and take their feedback.
Take only as many customer details as are necessary to reasonably complete the transaction and maybe gather some marketing research information. There is a direct correlation between the amount of information a website takes from customers, and the drop-off rate of customers from the checkout.
Do not include a Clear button. Customers will accidently hit it and give up in exacerbation. I know it sounds 2001, though I hit Clear a few weeks back on the newly-designed Pizza Hut website and had to catch my breath!
4. If possible, avoid users having to create an account to purchase; we just want to buy the flowers, not open an account. If an account is necessary, integrate the account establishment as part of the purchase.
5. Make warnings and instructions crystal clear. Customers need to know immediately what fields remain incomplete and why.
6. Make your security clear.
eCommerce strategy is a very broad topic – getting customers, getting them to buy, pay more, buy more and come back again – and nothing is more important than the fundamentals. It may only be single-digit improvement in customer conversion, though if eCommerce is a numbers game, and the conversion rate of customers through the checkout can be improved, it must be a key priority.