Four Words of Ecommerce Wisdom That Will Waste Your Time

Source http://feedproxy.google.com/~r/KISSmetrics/~3/ewzTpU8wmXQ/

A lot of ecommerce advice is useless. I’ve experienced an uphill battle trying to persuade ecommerce retailers to forsake these cherished bits of “wisdom.”

You can take these bits of advice, and toss them to the winds. I predict that once you do, your conversion rates will increase.

1. Provide coupon codes.

Actually, don’t provide coupon codes.

Coupon implementation is expensive, complicated, and time-consuming. Worst of all, the end results is a clunky UI that mucks up the conversion process with unnecessary friction.

Here’s why coupon codes are a problem:

  • When the user sees a coupon code form, they might leave the site in order to find a code.
  • When a user sees a coupon code form, it causes the user to feel like they are not receiving a fair price. This may, in turn, cause them to search for a lower price elsewhere.
  • Coupon codes add a layer of complication to the shopping cart process, which increases the risk of shopping cart abandonment.
  • Coupon codes attract a customer type that is fickle or erratic, and who produce a time drain for customer service. These customers are unlikely to be motivated by product quality, and are unlikely to have high lifetime value. Their primary concern is with pricing.

In a study sponsored by PayPal and comScore, researchers discovered that 27% of customers abandoned their shopping carts because they “wanted to look for a coupon.” The average value of those abandoned shopping carts was $109.

A coupon code form in your checkout is a dangerous thing. It is a signal to the customer to flee the page and scrounge for a code. And once they leave, they’re very unlikely to return.

Often, coupon codes are outdated or broken. Because they are often mismanaged by an in-house team unfamiliar with the process, it’s easy to forget to update things.

Image from everypoker.com.

Unfortunately, coupon codes are also the realm of black-hat spammers and virus-laden websites.

Retailers often attempt to mimic the offline world of coupons, using a redemption model to process coupons. The problem is, there’s not a direct apples to apples correlation between offline couponing and online couponing.

Image from ringcentral-coupons.com

Coupons work. Sometimes. But you’ve got to be extremely careful.

Image from sixt.com.

In one study on coupon codes, Eric Graham of Conversion Doctor discovered that one ecommerce retailer was losing a million dollars a year by leaving a coupon code form on their checkout page. Graham also reported that one of his clients improved sales by 70% simply by removing their coupon form.

You can try coupon codes, but make sure your execution is flawless. Couponing your product requires that you pull off a seamless onsite experience coupled with outstanding offsite promotion. Otherwise, you’ll have a coupon experience that leaves a bad taste in everyone’s mouth.

2. Give your customers lots of options.

Actually, give them only a few.

This is one of the most common landing page mistakes:

This landing page is one of the top three paid results for “buy pen online.” It is displaying 701 product choices.

What’s the problem? Option overload.

Too many choices actually paralyzes the user’s mind. Instead of making one of the many choices, they make no choice at all.

Customers will choose the path of cognitive least resistance. If it is difficult to choose from 701 pens, they will find an easier way to achieve their goal of buying a pen. Usually, that involves leaving the site to purchase from a competitor.

The most famous report on overchoice came in a 2000 study by Sheena S. Iyengar (Columbia University) and Mark R. Lepper (Stanford University). The results of their “jam study” was published in the Journal of Personality and Social Psychology. In the study, they offered customers free samples of jams for tasting. They tested the response of customer’s who were presented with six flavor choices, and the responses of customers who were presented with 24 choices.

30% of the customers who sampled from the small selection purchased jam. But only 3% of the customers who sampled from the larger section purchased jam.

Image from sivers.org.

The hypothesis of the study was that “choice is demotivating.”

It’s not just low-cost products like jam where this holds true. WSJ reported that “Auto makers [have] learned the risks in offering seemingly infinite option combinations.” One of those risks is that the customer expects to find an exact combination of a preferred option. When he can’t find that option, he chooses not to buy a car rather than to purchase one that does not meet his expectations.

It happens in the financial world, too. Customers who are presented with too many choices for their investments actually participate less.

Image from BusinessInsider.com.

Barry Schwartz has become an evangelist against option overload. He has found that too many choices leads to a loss of happiness, and can even produce symptoms of anxiety.

Give your customers more choices is not the path to success. It is, to quote Schwartz, “a recipe for misery” — not to mention, less conversions.

I did not end up choosing any one of those 701 pens.

3. Run a promotion.

Actually, call it a “giveaway.”

Marketers love their promotions — methods of generating leads, increasing conversions, and boosting their sales.

Often, these are exciting. They work. They generate buzz. They increase revenue.

Image from smithbrosagency.com.

The problem with “promotions” however, is the word. “Promotion” is jargony and inward-focused. It suggests that the event is focused on the company — promoting themselves — rather than the customer.

Unbounce tested three different terms when they ran a “promotion.”

  • Control word: “Promotion”
  • Variation 1: “Sweepstake”
  • Variation 2: “Giveaway”

The results, calculated in conversion rates, were surprising:

  • “Sweepstake” performed 40% better than “promotion.”
  • “Giveaway” performed 50% better than “promotion.”

Image from Unbounce.com.

Feel free to go ahead and run your “promotion.” Just don’t call it that.

4. Focus on the product.

Actually, focus on the user.

Ecommerce marketers have a myopic focus on their product, often to the detriment of their customer.

This effort sounds good, looks good, and feels exciting, but it leaves out the most important part of the process. Take this example. All the technical aspects are there, but one thing is missing.

Image from Noesissolutions.com.

Once you’ve selected the product to sell, it’s time to shift your focus away from that product and on to the customer. You will only see limited improvement by optimizing the product pictures, listing the benefits, and sharpening your value proposition.

By contrast, you will see a huge improvement if you focus on your user — building your audience, creating a tribe, expanding on social media, and targeting buyer psychology.

“But,” the argument goes, “people come to buy my product!”

Yes, but what should come first? Let me change the emphasis in that statement: “People come to buy my product!”

What happened when Zappos started selling shoes online? Did they create a new shoe? A better shoe? A more durable shoe?

No. They created a raving, frothing-at-the-mouth mass of fans, because they focused on customer service. There was nothing particularly outstanding about the product. This was your typical shoe store of Nikes, Converses, and Asics.

They focused on the user. And look where they are now.

Conclusion

Unfortunately, you could go wrong by following all the “right” advice.

Watch out for these four bits of worn-out wisdom. They’ll hurt you.

About the Author: is the Chief Evangelist of KISSmetrics and blogs at Quick Sprout.

Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, we will receive an affiliate commission. Regardless, we only recommend products or services we believe will add value to our readers.

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