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Merchant Secrets for Driving Conversion - Part 1
By James Maguire
November 7, 2005

The Value of Service
Freedman's research indicates that all shoppers can be broadly classified into three distinct categories:

A directed shopper knows what they want, is ready to purchase and needs little extra information; a browser surfs idly, and hence needs to be actively tempted and courted by a merchant; and an information seeker, who often shops a site on multiple occasions, may finish their shopping offline, and is usually found in data-heavy sites like home electronics, computers, appliances, and automotive. Conversion rates among information seekers can be boosted by offering an "education center," or a microsite, dedicated to offering help, research indicates.

Yet, for all of these types of shoppers, one factor remains key in influencing conversion rate: customer service.

Freedman cites research that indicates that in brick and mortar stores, poor service is the leading factor prompting shoppers to leave a store, expecting to never return. In fact, this low satisfaction drives many shoppers toward online shopping.

As an example of strong customer service, Freedman's research cited Road Runner Sports, which lists a toll-free number on every page. When shoppers call they talk with a true specialist, not an untrained sales rep; this improved service at the call center results in ten to fifteen times higher conversion than Web-only shopping.

Another top customer service example is that of West Marine, which focuses on responding to customer e-mails as a top conversion strategy. The site uses a metric it calls "e-mails/total transactions," which tracks on how quickly and effectively this process is handled. Because so many customer e-mails concern product and policy issues, responding to them efficiently definitely boosts sales.

At the very least, sites should offer clear contact information on multiple pages, especially the home page, to create a sense of shopper comfort.

A big part of customer service is being a trusted merchant. "Trust is an intangible that impacts whether or not a customer will visit and buy," Freedman notes.

When it comes to trust, the big question a site must ask itself is: does the site make it clear to shoppers that it offers "100 percent satisfaction guaranteed?" Ideally, a site will display this guarantee across many pages — in particular, on the product pages, shopping cart levels and customer service pages — making it impossible to miss.

Freedman's research indicates that only 65 percent of merchants currently offer this optimal guarantee, "so there's certainly room for improvement," she observes.

Convenience!
Of the top reasons shoppers give for shopping online, the number one factor is "saving time," (78 percent) followed closely by "get easier shipping" (40 percent), according to Nielsen research from 2004. So it should come as no surprise that making shopping convenient will boost conversion rates.

Benefiting the most from the convenience factor are those online merchants with a brick and mortar component - especially those multi-channel retailers who can closely coordinate their online and offline operations.

Forrester Research states that shoppers in 2004 spent a healthy $180 billion in brick and mortar stores that was influenced by online research — a 31 percent increase over the prior year. Given that only 7.7 percent of all retail sales take place online, this means that online research is playing an ever-larger role in brick and mortar shopping. In short, now is a good time to be a multi-channel retailer.

Specifically, the in-store pick-up of an online order is a huge conversion booster. Freedman's survey noted the good results that REI enjoyed with this technique. Offering in-store pickup of Internet purchases drives "conversion through the roof," and shopping cart abandonment is "significantly lower," reported the outdoor gear retailer.

An in-store return policy for online shoppers is also a top sales driver. Research by Harris Interactive reveals that not only do 88 percent of online shoppers say that a convenient in-store return policy has a bearing on their purchase decision, but that one in five shoppers will make an in-store purchase when returning their item bought online. It's a double-win for merchants.

For those online merchants who can't offer in-store returns, Freedman points out that a having a clearly displayed online return form can make a big difference. An even more effective technique for retaining customers, she says, is sending a pre-paid return label along with purchase. "This changes the dynamics of shopping, working especially well in apparel and accessories where size challenges are a constant and retention is essential for long-term viability."

Another effective conversion booster for multi-channel sellers is putting their catalog online. Shoe retailer Aerosoles reported that since it put its catalog online, its site's conversion jumped 15-20 percent, and its average order amount increased 10-15 percent.

An Unfinished Job
No matter what tactics a merchant uses to increase conversion, Freedman notes that there's no complete solution. As her report [www.marketlive.comgo2report] clearly proves, an online seller must constantly work to tweak and improve conversion rates, always looking for ways to gain that partial percentage point improvement. "At the end of the day it's an evolving process, so there's no substitute for looking at the details - it's a continual issue."

*In Part Two: merchants reveal their top ten online merchandising strategies, along with navigation tips, up-selling and cross-selling tactics, and more.

James Maguire is a contributor to ECommerce-Guide.com. His weekly feature appears every Monday.

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