There are two types of customers in the world of e-commerce: first time buyers and returning customers. When talking about digital product sales, the vast majority of transactions involve either first time buyers or returning customers who last purchased over a year ago. In either case, is it a good idea to require a customer to “create an account” during the time of buying?
Take a look at the following example from Nuance Communication’s checkout process for PDF Converter Professional:
Requiring a password in the shopping cart
The customer wants to buy the product and completes all the personal information, then reaches this point where he must pause to ask, “What password is this?” followed by, “Why should I have to?” At least the last sentence of the explanation identifies why the customer is asked to do this. But, by this time, how many customers have left the order process confused, resulting in lost sales? Don’t forget that passwords are a very personal thing and asking for a password does not result in the same comfort level as asking for name, address or email address.
Similarly, we all know that there are plenty of customers who don’t read the instructions on the screen, which also results in potential customers abandoning the cart because they start trying to remember their password or look through their older emails. At best, this results in potential customers taking longer to complete their purchase and at worst cart abandonment occurs.
Now let’s think about a couple of common reasons that you might want to require customers to create an account for every transaction.
In the example above, the benefit is that the customer can look up their order at a later time. From the instructions in the cart, it’s not clear what data appears from “look(ing) up your completed orders.” Let’s assume that a receipt, download link and order history are available behind the magic wall. Aren’t there other pieces of information that can be used rather than creating another password? How about the order reference number, which is uniquely available to the customer, or last four digits of the credit card number used or a zip/postal code?
In online communities where virtual products are sold, the user has already logged in with their global account and the e-commerce system does not need to ask the user to create a new password. If you are using a different e-commerce system than your main credential engine, ensure that your e-commerce system supports single sign-on to facilitate tying the transaction information to the master customer account.
Keystone: Avoid creating customer confusion and declining conversion rates by following a few simple rules:
- Avoid requiring a customer to “create” an account by providing a password before purchasing. Depending on what you are trying to accomplish with the user account, there are alternatives.
- If you already have an extensive customer account section, be sure that your e-commerce system is tied tightly via single sign-on technology.
What do you think about requiring your potential customers to create an account during the order process? Have you seen any other login examples that you think work well?
Filed under Account Creation, cart abandonment, conversion optimization, Conversion Rates, login passwords, Nuance, Required Login, shopping cart
Conversion rates for shopping carts are a frequent topic of conversation within the e-commerce industry. Digital products are no different and conversion rates are an important part of measuring the success of any e-commerce site. However, focusing too much on conversion rates, especially compared to industry peers, can distract from the real issues involved with closing sales.
If you have a conversion rate of 20 percent, are you doing well? What about 5 percent? In some cases, 20 percent is good. In other cases, 5 percent is really good. It all depends on what your definition of conversion rate is – and how qualified the traffic is to begin with.
Traffic Volume compared to Position in Life Cycle
As e-commerce industry veterans, we typically define conversion rate as “the number of customers who complete a purchase divided by the total number of customers who enter the checkout process.” In that case, if there were 5,000 customers in the checkout and 500 sales, that is a 10 percent conversion rate.
However, If we instead calculate the conversion rate as the number of customers who visit the website divided into the total number of sales, you can expect your conversion rate to be dramatically different (i.e. lower). If you have those same 500 sales, but had 500,000 website visits, that would be a 0.1 percent conversion rate. Quite a difference, yet nothing has changed with respect to the revenue generated.
Also, conversion rates fluctuate more often than you might think. In the following graphic, the conversion rate for one software company is compared week to week. Blue bars represent the current week, green bars represent the previous week. As you can see, the conversion rate can vary by more than 20 percent from day to day.
Conversion Rate Comparison - Week to week (click to enlarge)
Another important point to make regarding conversion rates is that the quality of the traffic entering the beginning of the funnel makes a difference in conversion rate comparisons. Traffic from a PPC campaign targeting a specific keyword with a targeted landing page will see a higher conversion rate than random traffic reaching the home page of a website because users were targeted and led to an appropriate page. Similarly for shopping cart conversion rates, if customers have the opportunity to make decisions at the beginning of the process, it trims down broad traffic into real buyers – and has a huge impact on conversion rates!
Determined customers that reach the cart are more likely to purchase as opposed to someone who sees a “Buy Now” button and clicks it to see what is next. Random “Buy Now” button clicks result in many people leaving the cart process without purchasing although they likely would have never turned into customers in any scenario. Filtering out these random “Buy Now” clicks by inserting additional steps, may help you achieve an increased conversion rate, but at the risk of overall revenue.
Now, with all of this in mind, how relevant is a comparison between your conversion rate and another company’s rate? Don’t let conversion rate comparisons get you down or give you a false sense of security.
Keystone: It is important to establish YOUR OWN customer conversion rate baseline, start by defining the start and end points for your conversion rate calculations, then attempt to improve, rather than focusing on the actual number against the industry, which is in our opinion, is rather meaningless.
Filed under cart conversion, Conversion Rate, ecommerce shopping carts, Multi-Variate Testing
