Clearsale Blog Posts
You have certainly heard that online sales are growing, but is this the case for your virtual store? If the answer is no, it's time to look at a few practices that might be hampering your conversion rate.
Although there are many things that can harm sales, today we will be talking only about payment and its options, and the losses resulting from improper turn-downs and fraud.
Cart abandonment is certainly a problem for any virtual merchant. Cart abandonment in virtual stores ranges from 60 to 80%, averaging 68.91%.
Among the many reasons people abandon their carts, an important one is that they become frustrated with complicated finalization processes. Too many steps before a purchase is complete will irritate buyers and lead them to abandon their carts. Consumers are normally in a hurry and quickly give up, forgetting about the transaction over time.
Another problem is when they have only a limited number of payment options. If a legitimate customer places an order and his/her card is rejected and he/she gets no other payment option, this consumer will certainly switch and try a competitor site. This takes just a couple of clicks.
Fraud is also of concern for all virtual stores. Fraud may result in major loss, significant headache and serious risk to the merchant. On the other hand, good purchases improperly turned away for suspected fraud can affect a merchant's reputation among good consumers, disappointed that they were turned away.
If you do not want your business to suffer for any of these reasons, but want to see your sales grow month by month, here are some hints that will help keep your profits up.
Review your payment process
- Make sure your finalization process is user-friendly. Most customers are in a hurry and easily distracted. Don't forget there are many brands fighting for their business. Customer frustration and irritation can emerge at any step in the process, leading them to abandon their carts. For you, this means lost revenue. Showing customers what the steps are will help manage their expectations.
- Minimize waiting time. Traditional B&M stores try to keep customers from waiting in long lines. This same rationale applies to online stores. An option to finalize without creating an account makes the process shorter and allows consumers to buy what they want without feeling obliged to go through additional steps.
Of course, it is important to gather customer data for future campaigns, but even this may be unnecessary. Considering offer incentives for customers who are willing to spend a bit more time and create an account.
- Avoid last minute surprises. You must do everything you can to encourage sales and avoid any unexpected costs that customers would view as last minute add-ons. Promotional codes, free shipping and blowout sales are powerful stimuli for customers to complete their purchase. Reduce the risk of finalization disappointments by allowing customers to insert promotional codes at the start of the transaction.
- Avoid waiting for the last step in the finalization process to show shipping costs. Consumers may be scared away if this is higher than what they had expected. Most of the large online stores allow customers to check shipping costs on the first or second page of the finalization process. Show a preview of the cart and associated costs, such as shipping and taxes, early in the transaction, allows customers to make adjustments based on their budget.
- Avoid fraud without affecting your sales. Fraud is a key reason some online merchants go broke. If you think this can only happen to your competition, think again! Any online store is susceptible to fraud.
The so-called chargebacks, purchases made using credit or debit cards and cancelled by the card administrator have a direct impact on your turnover. Chargebacks may happen due to stolen data and the card owner refuses to recognize the purchase. You did your job, you shipped out the goods and now are stuck with the loss.
If you feel the best way to handle this is to manually assess the risk of every purchase, or implement a more conservative policy that turn downs more orders to avoid this risk, be aware that there are far better options! Fraudsters are professionals, and are increasingly well prepared, using creative systems to access your system. Legitimate customers shouldn't have to suffer with this!
We suggest you retain the services of a company specialized in online security and fraud minimization. Focus your effort on increasing sales, improving marketing, adjusting logistics and other measures to attract customers. Leave fraud prevention to the experts such as ClearSale, so you are free to sell your merchandise without fear of fraud.