Practical Ecommerce

Reducing Cart Abandonment

The most important part of any ecommerce site is the checkout: the collection of money from your customers. You have spent time and money getting customers to your site, you have managed to convince them to purchase, and all you have to do is take their details and their money. So many sites lose customers at this point. It is called cart abandonment. Every cart abandoned is a lost sale and every lost sale is a problem.

There can be many reasons for a customer to walk away, and some will be impossible to resolve. There are several things you can look at to minimize abandonment. First, it is vital that you have an accurate measurement of cart abandonment. It is essential that whatever change you make, the abandonment rate is measured to ensure that it improves your customer retention rate. There is no point making a change that you think will help if it does not. It is also a good idea to make the changes one at a time. If you do multiple changes you have no idea what effect each has, nor if one has a bad effect masked by one with a better effect.

The changes that I have done over the years that improve conversion are:

  • Let the customer know the delivery costs before they get to the cart. Make it clear and obvious what the post will cost. When I shop on the Internet, I hate not knowing the postage cost and having to wait until I have entered all my details and got almost to the end of the checkout.
  • Consider free post. We all know that there is no such thing as free post. The postage cost is paid for in a higher item price, but sometimes this improves conversions. It depends on your market, what you sell, and to whom. But free post can dramatically improve customer conversion.
  • Offer a no quibble return guarantee. If for any reason the customer changes his mind, he can send the item back for a full refund. In the E.U. it is statutory to do this, but it helps to boast about it as if you were doing this on your own, rather than forced by law.
  • Make it easy for the customer to checkout. Have simple, straightforward forms, on as few steps as possible, that the customer can easily fill in. Nothing irritates me more than a checkout that forces me first to create an account, then forces me to log into that account, then forces me to go back to the checkout to start again now that I am logged in.
  • Secure certificate (SSL). However you accept payment, it is worth having a SSL certificate so your customers can enter their personal details in a secure environment. Some customers look for this and will leave without it. As a personal preference I use a Go Daddy Extended certificate. That way I get the green bar. I believe that having a green bar is more important than using one of the major (and very expensive) certificate providers. My customers are not necessarily experts on who issues a SSL certificate, but can recognize a green bar.
  • Using PayPal. This one surprised me. I have always had a merchant account and have always collected payment with the merchant account. I started offering PayPal as an alternative a couple of years ago and was surprised when conversions increased and a significant percentage of orders used this payment method.

Since I moved to Magento, my conversions increased. The standard Magento checkout is quite good for customer retention. There are extensions for Magento that changes the checkout to a one step screen. I have never used it. I have seen tests done that show that it dramatically reduces customer conversion. I have also seen tests done showing an improvement in conversion. The lesson here is test the change as what works for some sites may not work for you.

The biggest single improvement I had was introducing PayPal as an alternative payment method. I had always looked down on PayPal, assuming that PayPal was for the hobby seller websites and not for serious sites. I was wrong. PayPal is a serious alternative. For new sites it allows a pay-as-you-go solution, which although costs more for each transaction, can work out cheaper overall as there is no minimum processing fee, no monthly fees and no other charges. For established sites it provides an alternative that your customer may prefer to use. For customers nervous about putting their card details on a new site, it provides a known solution.

Over the years, the customer’s expectations have changed. When I first started in ecommerce it was a “fact” that customers did not like to be taken off site for credit card entry and payment. It was considered “essential” that you accepted cards on your own site and all the third party processing happened behind the scenes. Sites that used the payment forms on the gateways were considered less secure and more likely to have cart abandonment. Now with Verified by Visa where you are always taken to a third party, together with PCI compliance, customers are getting more used to being taken off site. Indeed some may even prefer it as they believe that the third party payment gateway is more secure and trustworthy than the site. Indeed this feature is promoted by PayPal and Amazon Payment Services.

It is worth testing these options on your site. You may be surprised at the results. Taking card payments on the gateway site’s form on their servers will dramatically reduce your PCI requirements and should reduce the PCI compliance costs. It may also reduce cart abandonment. You never know until you test it.

Cart abandonment is a fact of life with ecommerce. You will never eliminate it, but with careful testing you should be able to reduce it.

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