Are You Wasting Your Online Sales Potential

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Are You Wasting Your Online Sales Potential

  1. 1. Are You Wasting Your Online Sales Potential? November |2008
  2. 2. Are You Wasting Your Online Sales Potential? e-Commerce businesses and online sales channels of traditional retailers are on the rise, with a growth rate almost 6 times higher than overall retail industry, according to NFR and Forrester reports. Despite such fast growth rate and considerable investments, there still exist vast untapped opportunities in online stores across the world, according to a recent study by Market Live: • Over 90% of visits do not result in shopping carts. • About 60% of shopping carts are abandoned. • About 80% of customers do not have repeat orders. Companies should focus on end-to-end management of customer lifecycle to leverage these untapped opportunities and boost bottom-line results. Actions taken at every stage of customer lifecycle would increase cart values, decrease abandonment rates and have direct effect on profitability. Successful management of this lifecycle requires effective use of customer analytics, identifying customers at different stages, their profiles and taking custom actions for each. Online stores have an upper hand in terms of customer and visit data when compared to traditional channels, with the ability to observe shopping behavior details such as what visitors search for how much time visitors spend looking at which products, etc. Companies should leverage such data and find ways to further enrich it (e.g. through loyalty programs, golden questions, personalized shopper assistance for detailed lifestyle data). Every stage in this lifecycle requires exclusive attention and online store managers should assess their performance and take certain actions targeting customers in each stage. Forte Consultancy Group defines eight stages and guidelines to follow in each stage based on best practices as follows:
  3. 3. A. Create Visits Definition: Attract visitors to online store from all target market segments Guidelines: 1. Use search engine optimization techniques based on web traffic insights 2. Utilize variety of online and off-line acquisition channels 3. Customize acquisition approach by target market segment 4. Create reasons beyond purchase for visiting site Sample KPIs: Number of Visits per Month, Unique Visitor Count per Month, Advertising Cost per Visitor, % of Visitors Bookmarked Site, Page Rank of Homepage B. Subscribe Visitors Definition: Motivate subscription of visitors as soon as possible Guidelines: 1. Call to action for subscription on landing page clearly 2. Make subscription a fast and convenient process 3. Provide immediate and extra value add for subscription 4. Offer and promote competitive value propositions Sample KPIs: Subscriber / Visitor Ratio, Total Unique Subscriber Count, Number of Subscriptions per Month, % of Subscribers with Full Data, Duration From Visit to Subscription C. Create Interest in Items Definition: Have customers view various products offered Guidelines: 1. Have effective and alternative categorization of items 2. Pro-actively recommend items based on customer and product profiles 3. Provide ability to search with alternative parameters and means 4. Provide creative and instructive item information and presentations Sample KPIs: Number of Items Viewed per Visit, Number of Items Viewed per Subscriber, % of Subscribers Viewing Items, Number of Categories Viewed per Subscriber, % of Items Not Viewed for Long Time D. Create Purchase Intent Definition: Motivate customers to add products they are interested in to cart Guidelines: 1. Follow-up and promote purchase of products viewed by customers 2. Identify and act on customers who are using site for viewing products only 3. Follow-up interest in out-of-stock products after replenishment 4. Translate interest into wish lists for future purchase
  4. 4. Sample KPIs: % of Views Resulting in Item Add, Number of Items per Cart, Value per Added Item, % of Items Viewed but not Added Frequently, % of Subscribers Viewing Items Only E. Create Check-out Intent Definition: Prevent removal of products added to cart Guidelines: 1. Provide convenient, one click check-out 2. Make single item purchase as fast as possible 3. Make relevant recommendations before check-out 4. Make added items accessible even if site is abandoned Sample KPIs: % of Item Adds Abandoned, % of Item Adds Removed, % of Cart Value Proceeded to Checkout, Average Item Time in Cart, Average Time to Checkout F. Avoid Abandonment Definition: Ensure completion of check-out Guidelines: 1. Provide convenience and speed in check-out process 2. Remind and follow up abandoned carts 3. Motivate abandoned cart purchase providing additional benefits 4. Make abandoned carts available in next visits Sample KPIs: % of Check-outs Abandoned, % of Potential Value Abandoned, % of Abandoned Carts Purchased Later, % of Abandonment to Competitor Site, % of Subscribers with Abandoned Carts G. Ensure Payment Definition: Avoid sales opportunity loss due to payment difficulties Guidelines: 1. Provide alternative means for payment 2. Ensure and promote payment security 3. Keep customers informed about payment process and status 4. Follow-up and recover failed payments Sample KPIs: % of Payments Bounced, % of Potential Value Bounced, % of Bounced Payments Abandoned, Payment Attempts per Purchase, Number of Fraudulent Cases Identified H. Create Repeat Visits Definition: Identify dormant customers and motivate revisit
  5. 5. Guidelines: 1.Regularly provide new content and offerings 2. Pro-actively take actions for dormant visitors 3. Provide additional benefits for repeat purchases 4. Make recommendations for cross and up-sales after sales Sample KPIs: % of Subscribers with 2 Purchases, % of Subscribers with >2 Purchases, % of Subscribers with >1 Visit, % of High Value Loyalists, % of Subscribers with Returned Goods Within an increasingly competitive marketplace, companies managing each of these eight stages will surely benefit from the rapidly growing online community and E-Commerce market.
  6. 6. About Forte Consultancy Group Forte Consultancy Group delivers fact-based solutions, balancing short and long term impact as well as benefits for stakeholders. Forte Consultancy Group provides a variety of service offerings for numerous sectors, approached in three general phases - intelligence, design, and implementation. For more information, please contact info@forteconsultancy.com Forte Consultancy Group | Istanbul Office www.forteconsultancy.com

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