By some estimates, fewer than 20 percent of online retailers have conversion rates above 5 percent. Most Internet merchants experience sales conversions of only 2-to-3 percent. To compensate for such low conversion rates, many companies make significant advertising investments to boost traffic, but a new software-as-a-service solution focuses on increasing sales from your current visitors.
Runa provides a customizable, dynamic sale price solution that analyzes customer demographics and behavior, offering “browsers” and “window shoppers” deals and discounts to convert, while eager buyers pass through your sales funnel unhindered. Perhaps, the most concrete application for this tool is preventing or reducing cart abandonment.
Runa charges no upfront fees, but does take a portion of rescued sales. Altogether, Runa presents online merchants with the opportunity to significantly increase conversion rates without any upfront investment, which is why I am awarding Runa four out of a possible five stars in this “The PeC Review.”
The PeC Review is my weekly column focused on introducing you to the products and services that I believe could help your ecommerce business grow. This week, let me tell you why I think Runa is a great service.
Video: Meet Runa
Because Price Does Matter
When you ask customers why they bought a particular product from a particular merchant on a particular day, you will get a number of different answers. Things of great importance include a trusted brand, a professional looking website, coupons (usually the top answer), and (much to the chagrin of many sellers) price. Like it or not, Internet retailing has made it easier for consumers to shop around for price, and in many cases having a lower price is all it takes to convert some customers.
But no merchant likes to slash prices and, thus, crush margins. Enter Runa. This service allows merchants to set reasonable prices, so interested buyers pay a fair price and are happy. While less interested buyers—those that might be going from site to site comparing prices—are presented with sale prices, specials, or discounts at key points in the sales funnel. The idea is to get less-likely-to-convert shoppers excited about saving money and, therefore, make a sale. While this might seem like a fairly complicated thing to do, Runa makes it easy for merchants.
Reminds Me of Game Theory
Using an algorithm not unlike what you would find in game theory, Runa seeks to find the best possible outcome for its merchants in an environment where the merchant’s interests and the customer’s desires might be in conflict.
Let me explain. With an eager buyer, the customer/merchant relationship is in harmony. The buyer wants or needs a product and the merchant seeks to provide that product at a fair price in a timely manner.
But many shoppers are antagonists. They seek to minimize or even eliminate the merchant’s profits, using one seller’s prices or shipping options to bludgeon another.
Runa looks at visitor data and behavior, classifying a specific visitor’s level of interest, and dynamically taking action to make a sale that is still a win for the merchant.
You Select The Products and The Campaign
Runa’s dynamic discounting does not apply to every product on your site. Rather, as the merchant you can select which products the Runa solution can offer discounts on, and you decide what sort of discount the solution can offer. Combined with the solution’s real-time analytics data, this flexibility means that you can optimize your discounts to increase both conversions and profits all from the Runa dashboard.
Miva Merchant Integration
Using Miva Merchant’s module framework, Runa has made it extremely easy for ecommerce businesses using the Miva Merchant shopping cart to integrate this solution. It is as easy as installing any Miva Merchant module, and—unlike most modules—there is no cost to the merchant unless Runa makes a sale.
Zen Cart Integration
Runa has also integrated its service with some Zen Cart-based retailers, but unlike the Miva Merchant module, an online merchant will need to work with Runa to get it up and running on Zen Cart’s platform.
No Upfront Cost
Finally, Runa does not change an upfront fee. Rather merchants pay nine percent of a rescued sale to the Runa folks only after the solution has converted a site visitor that would not have otherwise made a purchase.
Runa offers merchants a great new tool to increase conversions. For online retailers using Miva Merchant, it is almost a must-try.
But there are a few things that Runa could have done better. Personally, I think that the 9 percent of rescued sales that they ask for is too high. Many competitive products just don’t have that much margin available. A better model would be something like 2 percent of the sale or 10 percent of the profit, whichever is greater.
Also, while Miva Merchant certainly has many customers, I would like to see an easy-to-implement version of Runa for other ecommerce platforms.