Comment – Opportunity losses: maximising customer conversion
Most people, when thinking of e-commerce, believe that the major contributor to loss (whether it is of revenue, customers or reputation) is fraud.
By Michael Norton
This is not surprising given the regular fraud horror stories we are fed by the media. But by focusing on fraud alone, an online business is leaving itself wide open to opportunity losses.
Opportunity losses are particularly prevalent in recessionary times as we all strive to build a customer base in challenging conditions. In essence these losses stem from failed customer conversion – not optimising the customer journey from the first click to the completed purchase.
And it also comes down to limited payment options. In the current economic climate especially, consumers are demanding more varied and flexible ways to pay for their goods. Cash is becoming more prevalent on the high street, so as online retailers we need to listen to the consumer and provide them with the same, if not more, choice online.
As an online business too we have made it a priority to find ways to maximise and retrieve sales from all potential customers. We have identified a number of ways, some technical and some common sense, to increase online customer conversion.
The first and newest area for us is transaction optimisation. The causes of authorisation declines are numerous and complex – each card issuer has its own authorisation systems: policies; processes; and risk parameters. By undergoing rigorous analysis of transactions over a period of time, we have identified patterns in declined transactions. By using our findings and implementing intelligent routing of transactions we are able to achieve the best possible approval rate.
‘Whitelisting’ is another simple way to improve customer conversion. In the same way as you must blacklist a fraudster or problem customer, the opposite is true of your good customers! Remember them, so that next time the shopping experience is an easy and positive one for them. The easier and faster you make their online buying experience the more likely it is that they will return.
It is often the case that an abandoned shopping cart does not necessarily mean a lost sale. With the right solution you can contact customers who have abandoned a transaction in the middle of payment and convince them to complete the transaction. One way of doing this is with a product called emailPay whereby you can email a customer who has abandoned the cart with a personalised message and a direct link for them to resume the payment process.
It is a strongly held belief of mine that the simplest way to maximise transaction volumes and minimise customer losses and churn is to make life easy. To this end it is critical to offer the broadest suite of payment methods.
If your payment process is restrictive in any way then you run the risk of losing sales. Making it easy for all consumers to pay using their method of choice is the secret to exemplary customer care and a prerequisite for enduring business success.
By offering a range of alternative payment methods, you increase your customer base and ultimately improve the customer experience. And you gain an advantage over your competitors.
It goes without saying than an effective fraud solution is essential for any online business to minimise risk and loss. But by looking at more than just fraud and evaluating the complete online purchase process, from beginning to end, you can significantly minimise your opportunity losses.
Optimising the customer journey, offering a range of payment options and added flexibility around the collection of payments (not just at checkout), will go a long way to further reduce losses and ultimately increase customer conversion.
Michael Norton, managing director of PayPoint.net
