Abandoned Cart — No lonely cart, no cry!
Cart abandonment statistics say that over 72% of the carts get abandoned. 72%! That amounts to around $260 billion, which can be recovered through checkout optimizations. Most common reasons for cart abandonments are:
Broadly, these are the reasons why customers abandon carts:
- Pricing issues
Extra costs are added depending upon the location of the delivery, separated product shipment costs (multi-shipping), taxes etc.
- User Experience issues
Poor design is a major cause of cart abandonment, with reasons ranging from complicated checkout journeys to not displaying simple calculations upfront — all these all under the purview of the user experience.
- Trust issues
Customers are a little hesitant in sharing their credit card information with e-commerce sites that do not show seriousness in fulfilling orders, having a easy returns policy (trust in their products), or take too long to deliver.
- Technology issues
Website crashing, CC not accepted, connection timeouts — these are issues for the technology nerds to figure out.
What can you do?
See the above four reasons? Each of these can be mapped to a specific business function (Business, Design, Design, Technology). But, what about that magical product management feature that will change your current landscape and earn you that special place in the eyes of business?
Say hello to CAS* (Cart Abandonment System)
Introducing the overly-complicated, yet easy to understand, abandon cart recovery system! You can set this up on your own ecommerce site with tweaks, but it works.
At the heart of the CAS* is the awesome points awarding system. This essentially associates points to users as they go through the funnel. To grossly simplify it, for every action a user takes, award him/her a point. At the time of the abandonment (Nth step of the checkout), you’ll have a number to refer to — a number which you can use to do either of the following:
- Contact the member with a simple recovery email.
- Contact the member with a simple recovery email, and a discount coupon (coupon value depends upon the points the member has and if he/she has already applied a coupon.
- Contact the member with a simple recovery email, and a shipping waiver or any other enticement, if coupons are not your thing**.
- Call the customer and provide a personalized assistance.
Now, the fun part is when you plug the response of the user (sale or non sale or second abandonment) into the system — the points you award for each step and the subsequent calculation of the additional discount — this will change regularly. Of course, the discount won’t exceed the limits you put on the system, but it will slowly start getting better on its own.
Advantages of CAS
It is specific. It is non-scammable. And more importantly, you can tailor it to understand your customer better! Consider this static system (as a POC), which rewards a user based on their actions after an “add to cart”:
You’ll see that a user with a higher value will be awarded a higher discount/waiver. Note that this only works under two strict conditions:
- The cart should be recovered in one click.
- The coupon amount should not rival existing campaigns and should be automatically applied on the recovered cart. Essentially, the cart should be a click to the place where the user left the cart.
Too complicated? Let’s simplify!
In my next post, we’ll be looking at a practical example of this system along with some data to simulate a financial model (with an excel, so you can plug in numbers that are specific to your situation).
Till then, think about how which factors can be taken into account for building this system. Stay tuned!
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* — I could have come up with something cooler like the S.L.A.T.R.A.C. (Self Learning Algorithm To Reduce Abandoned Carts), which, now that I think about it, is a good name for it. Maybe you can use it for your implementation. :)
** — There is a new school of thought that is trying to do away with coupons and discounts. The belief is that discounts and coupons attract only bargain hunters and not loyal customers, which inadvertently, leads to poor service, which drives away a loyal customer base. More on that later.