E-commerce Stats: Reduce Shopping Cart Abandonment

According to a study from Dieringer Research Group, Inc. (DRG), 114.1 million adults searched for product information online in 2003, and 98.9 million of this group went on to make purchases. In comparison, 106.7 million adults made purchases through the traditional mail-order catalogs, telemarketing, and direct mail channels.

Despite capturing purchases via this new channel, websites saw an increase in shopping cart abandonment over the previous year as a percentage of converted sales in the second and third quarters of 2004. Some sources claim the rate of abandonment is as high as 50-75%. So what can you do to reduce abandonment? Understanding your customers' behavior helps determine where your checkout process could use improvement. Cart abandonment is a natural occurrence in online stores, much different than in physical locations.


Some suggestions for reducing abandonment:

• Make the checkout progression short and easy to follow (large icons for "continue to payment")
• Provide explanation for any unusual information you collect
• Make the checkout process as easy for new customers as returning customers
• Provide a link back to the product, to open in a new window
• Illustrate security measures (secure shopping icons, https://)
• Add pictures inside the basket
• Provide shipping costs early in the process, avoid surprises that deter purchasing
• Make editing the shopping cart easy
• Provide complete contact information and appear approachable
• Track your site activity throughout the purchase or non-purchase of items – from the time a customer leaves a shopping cart to the return. With more detailed information, you can see areas for improvement, helping you turn more shoppers into buyers.

Studies suggest that shopping cart abandonment is more often tied to website design issues rather than technological or other problems. According to a December 2003 survey by NetIQ, the main reasons for abandonment:

1. surprise costs (such as shipping and handling)
2. requests for too much information from the user
3. lack of information about the product

Black Friday: Internet Infiltration

Well, if you're anything like my husband, Black Friday began at 9 am on Thursday, Thanksgiving Day, 2004. Why? Perhaps not the reasons you would expect....

Jeff, my husband, is a deal-getter. He researches, evaluates and compares products online prior to making any purchase, be it a fancy Motorola cell phone or a simple memory card. And this year, we both benefited from his type-A-ness.

As always, I (also a deal getter) wanted to take advantage of some of the Thanksgiving deals in the newspaper on Black Friday (like everyone else in the US). This, however, requires waking up at 5:00 am...ahhh the joys of the holidays. When I asked Jeff if he was ready to wake up early, to my surprise, he said, "I may not have to." This was quite out of character for Jeff, you see, because he is an electronics freak. He has to have the latest and greatest, fastest and thinnest models of whatever. This usually mandates Jeff join me at 5:00 am, not to Kohl's or Sears, but Best Buy and CompUSA.

Jeff explained that two things were happening online that night....1) Two major deal sites (FatWallet and BF2004) were distributing information, as they have come to be known/sued for, on both retail and online discounts and specials, 2) His electronic stores were encouraging shopping at home on Black Friday by offering discounts (if not lower, the same) beginning at 1 am, often with free shipping. His shopping process was streamlined, organized and mayhem free! He would not join me in the ravages of the 2 hour waiting lines and frenzy of competing shoppers.... he was done.

I came to realize that the Internet has revolutionized Black Friday for some people. If your Black Friday isn't at least easier because of the world wide web, it should for sure be more organized because of the information you have available.

Take Borders for instance. One of Borders' sites, http://www.bordersstores.com/, gives customers the opportunity to reserve an item online and pick it up at a store. A computer program takes inventory information from stores and loads it on the Web site. Meanwhile, the consumers can still be met with all the point of purchase products that they would have had they gone to the store on Black Friday.

Perhaps more online stores need to capitalize on this infiltration. We're talking less overhead (in terms of personnel and utilities), less supply chain/inventory issues, and probably less customer dissatisfaction. Clearly, some of the benefits of the "loss leader" will be diminished online, but with new checkout techniques, like the upsell, "you may also like", basket bundling, "may we suggest"-type pitches, it's possible to capture the additional sales from consumers by letting your website work for you.

Granted, I still showed up at Kohl's this morning at 6:00 am for my diamond earrings at $50, but that's because I wanted to see the product. For items that don't require discrimination, I stuck to the web and minimized my exposure to the masses. And honestly, I watched at least 25 people at the jewelry counter walk off in frustration.

A ComputerWorld article indicates, "The share of Internet traffic going to shopping sites already has surpassed last year's high, set on Thanksgiving Day, according to Internet traffic monitoring company Hitwise Pty. Ltd."

According to a National Retail Federation shopper survey, 38 percent of shoppers say they will buy holiday items online. Another survey conducted by the retail federation shows that more shoppers plan to browse and comparison shop online this year compared to last.

Lifecycle of the Online Consumer

This is an interesting customer retention article...


http://www.webpronews.com/ebusiness/ebusinesstactics/wpn-8-20041123MeasuringManagingVisitorCustomerRetentionPart4.html

The SEO Once Over

Search Engine Optimization (SEO) is one component of interactive marketing. SEO is the process of gaining top positioning in the search engines by developing your site with highly relevant content and legibility for both search engines and searchers. Sometimes referred to as “organic listings,” as opposed to paid or sponsored.

Search engine marketing has evolved from the early days of meta tags, keyword population and hidden code. SEO techniques now focus on enhancing the overall value of the site to search engines and searchers based on relevance, navigability and popularity. Search engine developers, led by Google in the late 1990’s, found that searchers recognized quality search results and remained loyal to those sites. Less and less, the trickery exhibited by sly webmasters garner the success that legitimately relevant and easily navigable sites see.

SEO Terms of Relevance and Popularity:

Keywords: The search phrases or target words that your consumers use to find your products and services. These should be 1 – 3 word phrases, but get into the mind of your consumer. In fact, Overture and Google offer keyword phrasing assistance tools. Be specific, for example, "New York Lawyer" is geographically targeted, but if you only practice personal injury law in New York, try "New York auto accident lawyer" or locally target "car accident lawyer".

Optimization of website: Implementing search engine friendly design by eliminating frames and large amounts of flash. The goal should be to optimize your text for searchers. In addition, the website’s page structure, headers, alt tags, anchors and links should be built and titled to consistently aid your keyword relevance.

Backlinks: Increasingly more important as an indicator of the value of your content, these links from one unique URL to another help search algorithms determine your popularity. Link building campaigns have become a new business.

Indexing: Search engines (spiders or robots) crawling through websites and compiling full-text databases

Page Rank: Once you have received a backlink from a website that has been indexed by the Google spider, your receive a ranking (see Google Toolbar) based on the links in and out of your site, and the importance of the sites housing those links. A PR exceeding 5 indicates a well-trafficked site.

Algorithm: The equation the search engines use to evaluate site positioning and rank for the websites they index.

Search Engine Inclusion: Submitting gratis or paying an annual fee or semi-annual fee to search engines to add your site within their database for return in search result. This can take a few weeks and often includes regular updates for the next year.

Your Marketing P's at Work Online

The 7 P's in Terms of Internet Presence: managing your website as a product

Product - how your product/service offering is represented on the site (appropriateness for target market), how the website itself treats the customer as an extension of the product (navigation, online support, online orders)
Price - online pricing strategy, bundling and discounts, online terms and conditions of sale, taxation and Internet Tax Freedom Act
Place - domain names, Search Engine Optimization (organic ranking), space (business categories online), distribution channels: website information (MaryKay) vs. purchases (Avon), local or national or international geographic targeting
Promotion - your online messages, your "signage" and graphics, paid online yellow page and business directories, SEO (organic and paid), sponsorships, affiliate linking, mini product sites, press releases and online credibility in comparative shopping sites, emails, e-newsletters, pop-ups, etc.
Packaging- doorway to your company (home page), how to reflect the style of your company and product in promotion and website (flash, multimedia, information, creative)
Positioning - create the ideal impression in the hearts and minds of your target market (see my discussion on online branding), benchmark competitive offerings and differentiate online presence
People/Process - how the site manages client contact (returns, ease of contact), online inventory management, online order fulfillment, online chats

The Power of Online Branding

The power of active, online buyers is growing by leaps and bounds these days (note my header). The power of the Internet to deliver your company's identity, products, service within seconds is exceptional. The power of brands to command instant sales cannot be overlooked. Although some marketers suggest brand loyalty is declining on the Internet, the power of a brand in its ability to convey a message of confidence, quality and reliability to your target market still exists.

In July 2004, the Interactive Advertising Bureau (IAB) and Nielsen/NetRatings, found that sponsored text advertising promotes branding objectives for companies sharing the top positions in the search environment. Sponsored text ads, like standard image-based ads, had their largest effect on unaided brand awareness.

Some suggestions: First impressions are important, so get to the point, be specific and indicate a benefit. Augment your branding in other media with online. Use your Brand identity in all online media - e-newsletters, email signatures, website press releases, etc. Inspire action within the consumer's lethargic, everything-come-to me behavior.

Recommended Resources

Here are some of my regularly used web marketing resources. You'll find extremely helpful information at all of these:

Click Z Network - solutions for e-marketers; a property of JupiterWeb

WebProWorld - articles and insider reports on search engines, web development and e-commerce - great enewsletter!

WebMasterWorld - current articles on noteworthy web industry events

SearchEngineWatch - articles and updates on search engine operations including submission tips, how each search engine crawls, spam penalties, etc.

Adage.com - latest news about interactive marketing and media industry

AdBumb.com - sign up for their topical and often humorous newsletters

HowStuffWorks - this site is just, plain cool.


Advertising Information for each major Search Engine:

Google: Adwords (PPC), adsense, google advertising professionals
Yahoo: Small business center, ad specs and product submissions
AOL Search: Aol advisor, national and local AOL
MSN Search: Audience site profiler, ad specs, bCentral
Ask Jeeves/Teoma: AJInteractive properties, submissions
Overture: Precision match (PPC), content match, local match
Open Directory: Dmoz submissions
AltaVista: Express inclusion, despite being an Overture property
AllTheWeb: Overture/Yahoo property
Lycos/HotBot: InSite (PPC) and Get Relevant (lead gen)
LookSmart: Listings (PPC)

Additional PPC advertising networks:

ePilot
Enhance Interative
FindWhat
Mamma
FastClick

All-in-one Interactive Media Buying:

ValueClick
24/7 Media
Doubleclick (up for sale as of Nov 3)

Getting Started in Online Media: Personal Experience

When I began my search for internet clients at the law firm, I was a bit green to the world of interactive marketing. Actually, I was green to web marketing which was the term more commonly used in 2000 (e.g. my title). My marketing background prepared me for the initial phase: goal setting, budget derivation and creative planning, but the strategy and implementation escaped me. I was quite nervous in my first week.

Picking up where others left off (off-budget)...
Since the law firm had a half-completed website, the attorney overseeing its development saw to it that advertising be purchased right away (read: prematurely). For six months, the firm was paying nearly $200 CPM for generic banner terms like airplane. Now, we do handle plane crash injuries, but a) it's not our bread-n-butter, b) there are 5x the number of searches for the word plane + crash than airplane + crash, and c) we did not need $25,000 + our budget directed to such a generically referenced keyword. The search engines and networks had the ball when interactive marketing was new and buyers were inexperienced. These types of buying decisions needed to be evaluated and adjusted (where possible). Task #1.

The second discovery I made was easier to fix. My reports indicated that we had been garnering 5,000 visitors per month from said banner advertising. We had a decent amount of content for each topic we advertised, but we had ZERO conversion pages. Without a case form submission page, potential clients would be expected to call us (I believe dial-up was approximately 80% of residential usage). Granted, the phone number is our URL, but remember what dial-up was like?

The third major issue was the download time of our site. The site was expensively developed using FoxPro database (go ahead and laugh), which was extremely gratuitous for our little website. The site took over 25 seconds per page to download on broadband. I had a fit (and so did the partner). This may have been the first thing I worked on with the design company.

The fourth and final concern was that of an accidental arrangement the law firm made with a large, specialized legal portal. The site was well-optimized (organic listings), but the site lacked any informational value, merely listing three or four local law firms. Further, the site's director prohibited competitive banner advertising. This just made no sense for our diversified practice areas. I helped break that contract in my first week.

Quickly jumping in the fray...

With the freedom to select the search engines and media types I wanted, I stumbled across a relatively new site called GoTo, an advertising network (now Overture). The bid for placement listings seemed like a very sensible way to spend money in light of the $100 CPM AOL, Excite and Lycos asked for their banners. A month later, I was signed up with another new face to online advertising, Google. With negligible competition, I quickly took advantage of extremely low CPC's and targeted, easy-to-change messages. Bravo!

Over the next three years, new PPC networks arose, lead generation opportunities developed, reporting capabilities improved and the traditional banner networks drastically cut CPM. During that time, I have designed a well-balanced and successful emarketing strategy for garnering Internet clients.

One of my shining moments happened when a nameless company pulled a certain drug in 2001...I was one of the first advertisers out on the web and I monitored bids and banners day and night. I capitalized on my swift call-to-action, capturing over 200 client intakes in the first three days of the recall.

Unfortunately, this moment also taught me my first valuable corporate lesson: internal customer processing capabilities of the firm must be able to meet demand. I soon launched a full investigation into process-improvement at our national office...

Developing Online Goals and Benchmarks

Like any investment opportunity, in the interactive contest you should have a game plan for how to reach your objectives, all the while keeping an eye on your competition.

Potential Goals:

• drive traffic to your website
• capture new target customers
• build brand recognition
• generate leads
• increase sales of products and services
• reduce cost of client acquisition

Methods to Measure Results:

One common misconception about web advertising is that click-through rates (CTR) are a measure of how well a campaign performed over a period of time. But a company cannot gauge a campaign's true success by simply observing CTR. For example, many users visit websites for information gathering. If your goal is leads or conversions, CTR is an inaccurate metric, especially if 75% of the visitors, see a flash intro and click back. Perhaps the campaign's message could be targeted to keep more customers.

Consider these metrics:

CTR - Click-through rate. The ratio of the number of unique clicks delivered to the number of impressions served. If one out of 100 people who visit a specific website click on the advertiser's listing or banner, then the CTR of that advertisement is 1/100, or 1%

CPC - Cost per Click. Advertiser pays for every unique click that delivers a consumer to the website. Regardless of what that consumer does on the advertiser's site, the click is still paid. Example: Specific keyword campaign on Overture bids for $.25 CPC

CPM- Cost per Thousand. The advertiser pays a rate based on units of 1,000 banner impressions. Example: AOL banner campaign costs $70 CPM impressions

CPA - Cost per Acquisition. CPA is registered when a particular action is taken by the consumer on the advertiser's site, i.e. sales. The payable action is determined by the advertiser and an acquisition ratio can be extracted as well. Example: Google Adwords campaign for Wallets saw a CPA of $22 last week

CPL - Cost per Lead. One lead is a valid unique e-mail address from a consumer who "opts in" to receive an offer from the advertiser. The pay-out rate is determined by the opt-in and demographic collection requirements of the offer. Example: Campaign for e-newsletter subscription sign-up sees $10 CPA.

Page Views - The depth to which a customer views your site content having clicked through an advertisement measured in number of web pages. Log files on your site can track this data and some ad servers can also track customer progress. Example: Brand recognition was enhanced after 2 page views.

Time Spent per Visit - The duration of time a customer spends on your site having clicked through an advertisement, measured in minutes. Log files on your site can track this data and some ad servers can also track customer viewing time. Example: Brand impact was high after 6 minutes spent on the website.

Branding Impact Focus Groups and Surveys. More subjective, qualitative measures of an online campaign's success, branding surveys and focus groups can provide the advertiser with feedback as to the impact of the branding campaign. Brand recognition questions, perception maps and image correlation can indicate whether consumers perceive the company in the light/message the advertiser intends.

E-commerce/Shopping Cart Abandonment rates: According to CIO magazine, the second quarter of 2004 online conversion rates grew 14 percent over 2003. Order sizes also increased 15 percent over the past year, with an average transaction valued at $134.01. However, shopping cart abandonment rose 24 percent over the same period. Says the article, "roughly half of Web shopping carts never make it through to checkout."

Opening Windows to Online Opportunities...

Interactive marketing is crucial to visibility, branding, customer acquisition and most of all, sales. Web marketing is quickly competing for advertising dollars in the traditional electronic marketing budget. Web advertisements give companies the ability to build immediate relationships with prospective and existing clients. With a click of the mouse a user can be transported to your website or e-commerce store.

Unlike some challenges in measuring traditional marketing vehicles, online advertising now makes it easy to calculate these returns. Web analytics have come a long way from early CPM (cost per thousand) impressions and CTR (click-through rates) analysis. Today, advertisers can measure CPC (cost per click), CPA (cost per acquisition), CPL (cost per lead) and even evaluate the branding impact of interactive ads.

Consider these goals I have seen met by my interactive advertising:

• isolate and reach target customers
• diversify marketing message across products
• maximize customer acquisition rates
• improve advertising conversion rates
• increase return on advertising investment
• grow customer retention metrics

If your target market is online...you should be here. Take a look at the demographics from my recommended resources.

Like all marketing investments, you should identify goals and design a strategy for your interactive marketing. And as I will explain over further posts, many busineses of all shapes, sizes and products or services can benefit from online exposure.

Banners and Flash

Samples of Interactive Advertising....Tara Deville

Tara Patricia Deville

Tara in Eze....(pronounced ehhzz)


As the Web Marketing Manager for a national law firm, I oversee all interactive advertising, online branding and electronic client communication responsibilities for the firm. Over the last four years, I have exceeded my own expectations by increasing web traffic despite increased competition, while cutting the cost per acquisition considerably and refining the quality of client leads. I have worked with four optimization companies and discussed strategy with three times that many. I have contacts at most major search engines and have been exposed to multiple web analytics programs, e-commerce packages (Linux, Windows) and web development strategies.

Since graduating from the University of Arizona in 1999 in Marketing and Entrepreneurship, I have worked in services marketing, web development and interactive advertising. Currently, I consult on two web-based start up companies for web marketing, lead generation and e-commerce branding.

I recently graduated with my Masters from Arizona State University’s W.P. Carey MBA Program, Summa Cum Laude.

Decent Web Summary Information to Have: Consumers and Advertisers

Search Engine Chart shows the major search engines and the search engines that power their main, pay per click, web directory and backup search results.

Search Engine Rankings - Instant, online reports of web site rankings in 7 top search engines, including Google, Yahoo! Search, MSN, AOL, Teoma (Ask Jeeves), AltaVista, AllTheWeb, and the top 3 web directories; Yahoo! Directory, Open Directory (Dmoz), and LookSmart - FREE!