Customers browsing online retail stores often experience a number of challenges in their shopping experience. Once you have insight into these challenges and have identified all the points at which customers abandon, you will then need to prioritize the areas in which to make changes.
Focus on the Low-hanging Fruit
The best place to focus your energy is on the low-hanging fruit. If 80 percent of your customers leave your e-commerce site before ever landing on a product page, but 80 percent of those remaining complete a purchase, then focus on better understanding the behavior of the first group of customers who don't ever reach a product page.
Why aren't they getting there and how can you change it? Let's revisit the offline grocery store analogy: If 80 percent of shoppers abandoned their empty carts at the deli counter and left the store but 80 percent of shoppers who placed a deli item in their cart made a purchase, you should seek to understand why the first group of shoppers chose to leave the deli without placing an order. Are the items clearly merchandised? Are they organized well? Is there enough room in front of the deli counter?
Knowing where to focus is difficult. After all, empty shopping carts in the grocery store are easy to spot. Knowing where customers frequently abandon online in a commerce environment is a little more challenging. There are likely hundreds, if not thousands of abandonment points currently existing in your online channel. So, how do you find the low-hanging fruit that will bare the greatest revenue lift?
Personas - The "Secret Sauce"
There are many tools to help identify abandonment points in order to produce solutions that will provide substantial return on investment, but perhaps the most effective tool to keep your efforts focused is the behavioral persona. These personas might be one of the hottest movements since e-commerce itself and are expected to be a significant trend this year. In fact, personas may well be considered the "secret sauce" for successful online commerce.
Personas are simply behavioral and biographical representations mapped to your traditional customer segments. They are a face to the data. When developing personas, you are bringing customer segments to life by naming them, applying a photo representation to them, and even - and this is critical - describing their behavioral patterns.
Why are personas important? One reason is that they help members of your team to internalize who in the online store they are serving. For example, after you have completed a persona exercise and determined "Sally" as a persona who represents a valuable customer segment, you can make the appropriate business decisions to serve Sally's needs. If Sally is busy running a home and starting her own small business and struggles with your online store because she doesn't have time to look for products, then it becomes easier to decide that improving your product navigation and search engine will drive more business from Sally.
A second reason that personas are important is because they differ from traditional market and customer segmentation. Personas move beyond simple demographics and add the complex layer of behavior. An online retailer can easily have two people in the exact same demographic segmentation who behave very differently. Therefore, customer behavior must be considered when trying to improve e-commerce results.
A sample persona will include a photographic representation and standard demographic information: a single name, age, marital status, number of children, residence, income and occupation. The persona will also provide a short biographical window into this person's life, such as hobbies, commute and behaviors online. While the persona should appear to be a mini-bio of a customer, it's important to understand that the persona represents an entire segment of customers. These attributes must be real, not fiction, and, because your customers have different spending habits, it is essential that you tie the persona to actual financials. This is an important step that will help prioritize the problems where you spend resources to improve site performance.
After the process is completed, most companies can expect to have three to five personas. Once you have developed your personas, it's time to move on to the next focus tool: the Pareto analysis.
The Pareto analysis plays off the Pareto Principle, which theorizes that a small percentage of issues cause the majority of problems. It's simply the famous 80/20 rule that, when applied to targeting problems inside your online channel, allows you to focus on the few issues that cause the most problems. The way in which you apply this rule is critical, however.
Your customers take one of thousands of paths through your online store. A path is defined as the order of pages a customer clicks on as they move through the channel. Here is a specific example:
Home Page > Product Category Page > Product Merchandising Page > Shopping Cart
During a Pareto analysis, you want to identify a small and manageable number of paths that a large percentage of your customers take. If successful, you will identify the top 7 to 10 paths that 50 percent of your customers take. Once those top paths are identified, you will know that by making substantial improvements to the experience will affect half of your customers.
Listen to What Your Customers Have to Say
A third tool of focus is the surveyed voice of the customer. In "Closing the Deal Online," I referenced the critical activity of collecting anecdotal or qualitative insight into the challenges faced by customers from your various segments. It is at this point that you must quantify the voice of your customer to understand if theories uncovered in the focus groups and one-on-one customer interviews carry throughout your entire customer base.
The qualitative insight might also be used to feed survey questions and the survey be distributed to a statistically relevant sample size of all your customer segments. This tool quickly pinpoints the pain areas and often leads to identifying the lowest-hanging fruit of opportunity that will produce the largest return. The exercise will also provide stunning insight into your customers' experiences and intended behaviors in the self-service channel. To ensure accuracy, you should marry this data to the behavioral personas.
Ultimately, by applying the results of these three focus tools (behavioral personas, Pareto analysis and the quantified voice of the customer) to the inventory of abandonment points in your e-commerce sales funnel, you will be armed with a clear target of attack to minimize abandonment and increase overall conversion.
Of all of the abandonment points, only a small subset will occur in the paths highlighted in the Pareto analysis. Of those abandonment points, the voice of the customer quantified by the survey results and mapped to the personas should provide clear insight into which abandonment points can be fixed to meet specific needs of specific customers.