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Setting Sites Toward the Future, Now

How E-Tailers Can Get More Customers to $pend Online

It's become a broken record -- e-retailers fumbled the e-commerce ball last year because of their inability to deliver the goods -- that is not having the procedures, technologies and resources (in house or outsourced) to get products in the arms of awaiting and expecting customers. While being able to take and fulfill orders quickly and accurately is important, as e-tailers, we need to recognize that most of our yet-to-be-realized online business is lost even before we get the chance to address fulfillment.

In this article, we take a look at the two issues that determine a web site's success at convincing customers to buy online. We suggest a practical way of organizing customers and then outline some easy steps that can quickly and dramatically increase the number of buying customers and as a result, revenue. Finally, we identify the Internet's two most comprehensive web sites providing further strategies to increase e-tailers' successes.

The Two Issues - Privacy and Check-Out Ease: The Yin and Yang of Successful E-Tailers

For over five years, traditional Fortune 500 companies and new economy successes alike have consistently found that consumers' willingness to shop on a site -- that is, to actually spend money on a site rather than simply visit it -- hinges on the ability of the e-tailer to build trust by demonstrating commitment to protecting customers' personal and private information. This finding, which accounts for as much as 84% of non-buying customers, spans all age groups, product and service lines, geographies and pricing strategies. The bottom line: privacy equals customers' willingness to buy. Recently, web experience research -- the study of how online customers use and interact with web sites -- has turned up a startling finding. Over 40% of shoppers who were willing to shop online are stranded by the design, wording and structure of the web site at the very moment they are prepared to make a purchase. The lost opportunities for short- and long-term revenue is therefore directly related to online customers' ability to navigate through the online purchase process -- also known as 'ease of check-out'.

A Practical Way of Organizing Buying/Non-Buying Customers: Willingness and Ability

Based on the two issues of privacy and ease of check out, we can organize all customers into four natural groups using very practical terms -- willingness to buy and the ability to buy (i.e. navigate through the purchase process). These groupings help to identify ways to increase site conversion rates (i.e. switching visitors to buying customers) which average a disappointing 10-12% across most products and industries.

Willingness to Buy on Your Site	Willing But Not Able	Willing & Able
Willingness to Buy on Your Site	Not Willing & Not Able	Able But Not Willing
	Ability to Buy On Your Site

Easy Steps That Can Quickly and Dramatically Increase the Number of Buying Customers

(1) Willing But Not Able (Customers Who Want to Buy, But Can't): While these customers trust that their private information is respected, they are prevented from buying because of awkward checkout processes. Not only are these customers less likely to purchase once they've been stymied by checkout procedures but, they may only return for product information. As a result, in addition to losing easy revenue, visitor totals can remain high causing the site's revenue potential to be artificially inflated. This in-turn can lead to misdirecting valuable web site resources as well as disappointing key business partners.

Fortunately, improving checkout ease is relatively inexpensive and can yield great return on investment. Based on the most frequent checkout process problems, here are some easy steps to encourage and enable this group of customers to buy online:

- Design a checkout path for new customers. Use cookies to remember return customers and present them with a different checkout path. Avoid creating two checkout paths (e.g. new vs. return users) which typically confuses customers, particularly new customers.

- Allow customers to buy items before requiring them to register.

- If a customer makes a mistake during the check out process, highlight whatever needs to be changed prominently and word the message politely, clearly and simply. Explain why the information that is missing is necessary and reinforce the privacy policy.

- Inform customers of availability and price of items before they actually reach the shopping cart.

(2) Willing and Able (Customers Who Want to Buy, And Can). These customers have confidence that their privacy concerns are currently being addressed. They are also successful at making their way through the checkout process. These are likely to be the most Internet-savvy of your customers. Their expectations for privacy and checkout ease are high and always increasing. Keeping these customers buying (or convincing them to buy more) requires adopting leading-edge privacy standards and checkout technology.

(3) Not Willing And Not Able (Customer Who Won't Buy, And Can't). These very skeptical non-buying customers need to be educated about efforts to maintain their privacy as well as the user-friendliness of checkout processes. Since they are currently uncomfortable with buying on the Internet, more traditional promotion and education is needed to bring these people online. Incentives and 'bells and whistles' will likely have less of an impact than patiently and methodically demonstrating tolerance and respect for their privacy concerns and hesitation to work with some technology. By respectfully addressing privacy and ease of check out concerns, e-tailers can look to this group as an untapped, potentially loyal client base -- in the long-term.

(4) Able But Not Willing (Customers Who Can Buy, But Won't). Without a doubt, this is the biggest portion of non-purchasing customers visiting e-retailers and the largest group of yet-to-be purchasers on the Internet. These non-buying customers place protection of their privacy over every other concern. Since the mid-1990's studies have consistently shown that customers' concern for privacy is far and away the most critical issue hindering purchasing on the Internet*. Since this large group of potential customers is comfortable with technology, e-tailers' efforts to encourage them to buy (or buy more) should not be technology-focused. Rather, e-tailers could adopt the Internet's leading-edge privacy measures and standards in conjunction with demonstrating commitment to addressing privacy concerns (e.g. in marketing efforts) to quickly entice these would-be customers.

The Internet's Most Comprehensive Web Sites for Addressing 'Ease of Checkout' and Privacy

To increase your buying customers by addressing 'ease of check-out' - see www.CreativeGood.com

To increase your buying customers by addressing their 'privacy concerns' - see www.PrivacyDetective.com

* Studies by the Internet's leading researchers (e.g. Forrester, Jupiter, IDC, Harris Interactive) business associations (e.g. Better Business Bureau, Privacy Council), consultants (e.g. Ernst & Young, CommerceNet) and businesses alike (e.g. AT&T) have all found that concerns about privacy is the most important issue for online customers.

Bennett Gold LLP invites your questions, comments and feedback: E-Mail: action@BennettGold.ca Telephone: 416-449-2249. Read Bennett Gold LLP's Privacy Policies and Practices.

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