Conversion Conference Blog

By Charles Nicholls

Founder, SeeWhy

Last year, 154 million people in the U.S. made online purchases amounting to $155.2 billion in sales, or approximately $1000 each, according to recent Forrester research. But these are just the ones that made it through the process: ever since the very first online purchase in 1979, significantly more people have abandoned shopping carts than completed their purchases.

The shopping cart abandonment rate is currently 71 percent. That means that more than 7 out of every 10 customers that start a shopping cart process fail to complete it. And during 2009, 88 percent of all U.S. online customers abandoned at least one shopping cart, or 136 million people in total.

The reasons why website visitors abandon shopping carts haven’t changed much either. Another Forrester study shows that the cost of shipping is still the number one cause, and it has been for years. In fact, the top five causes of shopping cart abandonment are:

1. Shipping and handling costs were too high 44%
2. I was not ready to purchase the product 41%
3. I wanted to compare prices on other sites 27%
4. Product price was higher than I was willing to pay 25%
5. Just wanted to save products in my cart for later consideration 24%

(Note respondents were able to give multiple answers)

What’s interesting is that all of the top five reasons for abandoned shopping carts have nothing to do with the checkout process itself. These are bigger behavioral issues, related to the visitor not being ready or related to price.

Many ecommerce teams instinctively think that tuning the checkout process is the top priority when they consider increasing their website conversion rate (and reducing the shopping cart abandonment rate). In March, SeeWhy polled a group of 663 ecommerce executives and online marketers and asked them what was required to have a high converting website.

The top answer given was, not surprisingly, ‘Free Shipping’ (although many ecommerce teams know that this may be very difficult to deliver), followed by ‘Guest Checkout,’ ‘Simple, Intuitive Process,’ and finally ‘Short Checkout.’ This reflects our pre-occupation with tuning shopping cart processes. In past years, the checkout process was one of the top reasons that visitors abandoned, but as the Forrester data shows, this is now much less of a problem.

SeeWhy also conducted some research into website conversion best practices. One of the primary lessons learned was that tuning the website really isn’t all that important. In fact, only one out of the top ten sites offered a guest checkout, and most had not optimized their checkout process.

So, what the Forrester research points to is what many ecommerce teams already know: tuning the website to make the checkout process smoother is only part of the answer. In fact, many have learned that once you’ve tuned, they are still seeing high abandonment rates — perhaps reduced somewhat, but still frustratingly high.

The other area to look at is what you can do to recover abandoned shopping carts. Following up on abandoned shopping carts enables you to tackle the bigger behavioral issues: what can you do to increase the conversion rate for those customers when they are not yet ready to buy or those with an issue on price?

This is where remarketing is absolutely essential. Website visitors that have just abandoned a shopping cart are your very best prospects. After all, they almost purchased…but didn’t quite.

Something stopped them.

Experience tells us that it’s better not to try and second guess the reasons why website visitors abandon shopping carts — there are just too many potential and unique circumstances outside of your control.

What continues to amaze me is that so few websites currently remarket to their site visitors (16 percent of the Etail 500), despite this being so well proven as a technique in driving sales. Amazon is one of the biggest proponents of remarketing, yet it is done so subtly that many don’t realize that they are being remarketed to.

About the Author

Charles Nicholls is a 20-year veteran of the software industry in the US and Europe, is internationally recognized as one of the preeminent thinkers in web analytics. He has worked with many of the world’s top companies on their web and customer analytics programs, including Amazon.com, Ebay, Lands End, MasterCard and a many smaller companies.  Hear his speak about ecommerce site optimization at Conversion Conference East in Washington DC, October 4-5. Save $250 when you registe with promo code CCE642.

By Brooks Bell
President, Brooks Bell Interactive

Testing has become a buzzword in online marketing in the last 2 or 3 years. Marketers have discovered that testing makes it possible to increase conversion rates by as much as 500% without increasing marketing spend! It’s an exciting trend, especially in the context of tightening budgets and declining click-through rates.

So, what is testing, and how is it done?

In theory, testing is simple: present your customers with at least two competing marketing experiences in your live campaigns, and then measure response (This is called a Control/Champion and a Challenger). Once you’ve determined a winner, you test again! By iterating your creative, you can incrementally improve on your original results by incredible amounts.

Despite the buzz around testing, it’s not for everyone. There are 5 T’s in Testing to help you determine if you can reap the benefits. The five T’s are Traffic, Technology, Time, Trust and Team.

Traffic

Traffic is the first T in Testing. According to statistics, your campaigns must be seen by hundreds or even thousands of customers to accurate detect which message is winning. This is called statistical significance. It’s the likelihood that you would have the same results 95% of the time if you repeat the test.

Not having enough traffic is the most common barrier to testing. Anyone can test, but if it takes several months to achieve statistical significance, then it may not be worth your time or investment.

Technology

There are several testing platforms including Adobe Test&Target, Google Website Optimizer, SiteSpect. They are powerful technologies, but should be incorporated once you’ve mastered the basics. These technology capabilities are minimum:

1. You need to be able to split your traffic into each of your test groups. This means randomly exposing each customer to a test experience.
2. You need to be able to track the behavior of your customers in each test separately using your web analytics tags.

Time

Giving your testing program enough time is crucial. Testing takes at least twice as long as a standard campaign. There is more creative development, more planning and more analysis. Testing should not be treated like a single campaign or individual project. It’s actually a broader shift in thinking about marketing.  In fact, the key drivers in your marketing results, such as your offer emails, subject lines, newsletters should all be tested constantly and even indefinitely.

Trust

When it comes to testing, you need to trust your data. This means that you need to have strong web analytics. It has to be so trustworthy that you are willing to take action based on the results, even if it goes against your intuition.

Team

Lastly, testing requires the cross-functional skills of a team. First, a marketing strategist needs to decide what to test. Then, a designer and a copywriter need to create the campaign itself. Then, a web developer needs to build the page, tag it, and launch it. You’ll need the support of IT to split traffic to each of the test cells, and QA everything to make sure it doesn’t break anything else on the site. Lastly, you’ll need some help from a web analyst to pull reports and interpret the results. It can be a big effort, but it’s worth it!

Testing is a proven strategy that is still an untapped way to make marketing more measurable, accountable and effective. With lots of time, traffic, a strong team, trustworthy data, and good technology; you’ll have the right recipe for a winning testing formula.

About the Author

Brooks Bell will be presenting “The Power of Split Testing” at Conversion Conference East on October 4, 2010 in Washington DC. Her agency, Brooks Bell Interactive, designs creative solutions, online conversion strategy, and A/B test plans for clients including Chase Bank, Nickelodeon, ServiceMaster and AARP. http://www.brooksbell.com

Conversion Conference is the only industry event devoted exclusively to improving online conversion, and it’s coming to the Washington DC area October 4-5. Join over thirty top thought-leaders and network with peers at the parallel eMetrics show.