How to improve your checkout conversion rate
Ever wondered why your online shoppers are ditching their carts at checkout? If you answered yes, you might be in the middle of a checkout conversion problem.
In other words, visitors come to your website to make a purchase, but leave before completing their purchase. This phenomenon is all too common in e-commerce, with abandoned cart rates having skyrocketed to 70% in 2023.
Fortunately, there are several effective tactics businesses can employ to tackle this problem head-on and reclaim your potential customers. In this blog, we'll delve into the top ways you can boost checkout conversion rates and up your revenue.
But first, why are people dropping out?
There are many reasons why people visit your online store, make their way through a purchase process and then at the last minute totally change their minds. Here's a list of the typical reasons why you’re not getting those wins.
- Complicated checkout process: A lengthy or convoluted checkout process with too many steps or form fields can discourage customers from completing their purchase.
- Account creation walls: Requiring users to register or create an account before checkout can be a barrier, especially for first-time visitors.
- Lack of preferred payment option: If your store doesn't offer the payment method preferred by a customer, they may abandon their cart rather than compromise on payment security or convenience.
- Lack of trust in website security: Concerns about the security of personal and financial information can cause customers to abandon their carts if they don't trust the website's security measures.
- Unable to save the items for later: Some customers might wish to save items for future purchase or comparison, leading them to abandon their carts temporarily.
- Website errors: Technical glitches or slow loading times can frustrate visitors and lead them to abandon their carts.
Top ways to improve your checkout conversions rate
1. Simplify the checkout process
People appreciate a clear and intuitive buying process. However, many businesses fail to deliver on this. To increase conversion rates, aim to make the journey to checkout as simple as possible without unnecessary steps, forms, or pop-ups. To create a simplest checkout process: be mindful of general design and layout, and keep the journey as quick (and painless) as possible.
2. Offer guest checkout
As mentioned above, there should be minimal steps before checkout. A great technique to achieve this is by offering Guest Checkout options. This allows potential shoppers to bypass account creation and purchase items directly, thereby potentially preventing a 35% drop in transactions. Shoppers provide their information for their order, such as their name, shipping address, and payment details, without wasting their precious time creating an account on your website.
3. Optimize for mobile
Most folks these days shop on their mobile phones - 76% of adults (US), to be exact. If you're running an ecommerce store, you'd best make sure that you adjust mobile navigation so that your online store is fully optimized for the mobile experience. Key actions you can take include ensuring a highly responsive design, providing an optimal mobile view, and integrating payment options like Apple Pay, Google Pay, and PayPal, allowing users to complete their purchases with a single touch or click.
4. Display clear shipping fees
If you have global customers shopping from your online store, they probably want to see shipping costs before they click the pay button. Shipping costs can significantly affect prices, and purchasing an item without shipping costs can appear quite different at checkout. To avoid misleading customers, it's best to display clear shipping costs and available payment methods clearly on the checkout page. Doing this helps shoppers make better-informed decisions, ensures transparent pricing, and even boosts trust.
5. Communicate trust
Customers want to feel safe and secure when making purchases online. This includes having a reputable-looking website and displaying various badges for payment security, data protection, and purchase policies. Creating a trustworthy relationship with your customers boosts conversion rates. In fact, statistics show that 35% of potential buyers abandon a site without a security badge. These trust signals reassure customers that their information is safe and their purchase is protected.
6. Offer multiple payment options
Different customers have various preferences when it comes to payment methods. The Baymard Institute found that 6% of cart abandonments occur due to a lack of preferred payment methods. With more options, paying becomes more convenient, increasing the likelihood of completing a purchase. By offering multiple payment options, you make it easier for customers to pay in a way that suits their preferences and needs.
7. Use abandoned cart emails
Implementing an abandoned cart marketing strategy is crucial. A great way to do this is by re-engaging customers through "abandoned cart emails." Setting up emails gently reminds customers about their abandoned carts, highlights the items left behind, and utilizes personalized tactics tailored to reflect their buyer interests. Additionally, offering exclusive discounts or special offers can entice customers to return and seal the deal.
8. Reduce card decline rates
Having your customer click on the "pay" button can still turn out to be a lost conversion. Countless good deals are lost due to card declines - in fact, an average of 10% of checkout purchases get thrown out right at this very last conversion stage. This problem often goes unnoticed by merchants, but it can lead to millions of dollars lost for your business, not to mention the wasted marketing costs. With Bounce, your ecommerce business can identify false card declines and recover over 30% of them in real time, ensuring you capture valuable revenue opportunities and minimize losses effectively.
Ever wondered why your online shoppers are ditching their carts at checkout? If you answered yes, you might be in the middle of a checkout conversion problem.
In other words, visitors come to your website to make a purchase, but leave before completing their purchase. This phenomenon is all too common in e-commerce, with abandoned cart rates having skyrocketed to 70% in 2023.
Fortunately, there are several effective tactics businesses can employ to tackle this problem head-on and reclaim your potential customers. In this blog, we'll delve into the top ways you can boost checkout conversion rates and up your revenue.
But first, why are people dropping out?
There are many reasons why people visit your online store, make their way through a purchase process and then at the last minute totally change their minds. Here's a list of the typical reasons why you’re not getting those wins.
- Complicated checkout process: A lengthy or convoluted checkout process with too many steps or form fields can discourage customers from completing their purchase.
- Account creation walls: Requiring users to register or create an account before checkout can be a barrier, especially for first-time visitors.
- Lack of preferred payment option: If your store doesn't offer the payment method preferred by a customer, they may abandon their cart rather than compromise on payment security or convenience.
- Lack of trust in website security: Concerns about the security of personal and financial information can cause customers to abandon their carts if they don't trust the website's security measures.
- Unable to save the items for later: Some customers might wish to save items for future purchase or comparison, leading them to abandon their carts temporarily.
- Website errors: Technical glitches or slow loading times can frustrate visitors and lead them to abandon their carts.
Top ways to improve your checkout conversions rate
1. Simplify the checkout process
People appreciate a clear and intuitive buying process. However, many businesses fail to deliver on this. To increase conversion rates, aim to make the journey to checkout as simple as possible without unnecessary steps, forms, or pop-ups. To create a simplest checkout process: be mindful of general design and layout, and keep the journey as quick (and painless) as possible.
2. Offer guest checkout
As mentioned above, there should be minimal steps before checkout. A great technique to achieve this is by offering Guest Checkout options. This allows potential shoppers to bypass account creation and purchase items directly, thereby potentially preventing a 35% drop in transactions. Shoppers provide their information for their order, such as their name, shipping address, and payment details, without wasting their precious time creating an account on your website.
3. Optimize for mobile
Most folks these days shop on their mobile phones - 76% of adults (US), to be exact. If you're running an ecommerce store, you'd best make sure that you adjust mobile navigation so that your online store is fully optimized for the mobile experience. Key actions you can take include ensuring a highly responsive design, providing an optimal mobile view, and integrating payment options like Apple Pay, Google Pay, and PayPal, allowing users to complete their purchases with a single touch or click.
4. Display clear shipping fees
If you have global customers shopping from your online store, they probably want to see shipping costs before they click the pay button. Shipping costs can significantly affect prices, and purchasing an item without shipping costs can appear quite different at checkout. To avoid misleading customers, it's best to display clear shipping costs and available payment methods clearly on the checkout page. Doing this helps shoppers make better-informed decisions, ensures transparent pricing, and even boosts trust.
5. Communicate trust
Customers want to feel safe and secure when making purchases online. This includes having a reputable-looking website and displaying various badges for payment security, data protection, and purchase policies. Creating a trustworthy relationship with your customers boosts conversion rates. In fact, statistics show that 35% of potential buyers abandon a site without a security badge. These trust signals reassure customers that their information is safe and their purchase is protected.
6. Offer multiple payment options
Different customers have various preferences when it comes to payment methods. The Baymard Institute found that 6% of cart abandonments occur due to a lack of preferred payment methods. With more options, paying becomes more convenient, increasing the likelihood of completing a purchase. By offering multiple payment options, you make it easier for customers to pay in a way that suits their preferences and needs.
7. Use abandoned cart emails
Implementing an abandoned cart marketing strategy is crucial. A great way to do this is by re-engaging customers through "abandoned cart emails." Setting up emails gently reminds customers about their abandoned carts, highlights the items left behind, and utilizes personalized tactics tailored to reflect their buyer interests. Additionally, offering exclusive discounts or special offers can entice customers to return and seal the deal.
8. Reduce card decline rates
Having your customer click on the "pay" button can still turn out to be a lost conversion. Countless good deals are lost due to card declines - in fact, an average of 10% of checkout purchases get thrown out right at this very last conversion stage. This problem often goes unnoticed by merchants, but it can lead to millions of dollars lost for your business, not to mention the wasted marketing costs. With Bounce, your ecommerce business can identify false card declines and recover over 30% of them in real time, ensuring you capture valuable revenue opportunities and minimize losses effectively.
Optimize checkout for success
Whether it’s confusing web design, or false card declines, improving your checkout process is vital for ecommerce success. With many factors leading to cart abandonment, streamlining the online checkout is crucial for retaining customers, building loyalty, and boosting revenue. By prioritizing checkout optimization, businesses can seamlessly guide customers through the buying journey and resolve common pain points that maximize value from your shoppers.
Optimize checkout for success
Whether it’s confusing web design, or false card declines, improving your checkout process is vital for ecommerce success. With many factors leading to cart abandonment, streamlining the online checkout is crucial for retaining customers, building loyalty, and boosting revenue. By prioritizing checkout optimization, businesses can seamlessly guide customers through the buying journey and resolve common pain points that maximize value from your shoppers.
Heading 1
Heading 2
Heading 3
Heading 4
Heading 5
Heading 6
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
- Item 1
- Item 2
- Item 3
Unordered list
- Item A
- Item B
- Item C
Bold text
Emphasis
Superscript
Subscript
Further reading
.jpg)
A good B2C marketer tries to win over customers. But a great one wins over customers while hitting company goals, aka marketing KPIs (key performance indicators).
Setting targets and strategies that support a company’s long and short-term objectives is the most important part of a B2C marketer's job. In this blog, we'll cover the key KPIs every B2C marketer should know to boost their business.
Understanding the marketing funnel
Marketing KPIs exist within the marketing funnel. To understand any KPI, one needs to be familiar with the marketing funnel as a whole. This is essentially a model that visualizes the path customers take from brand awareness to conversion (purchase).
While there is no single marketing funnel that everyone agrees on, there are some basic stages that remain the same.
- Awareness: Introducing consumers to your brand and keeping it top of mind.
- Consideration: Educating consumers about your brand and its unique value proposition.
- Conversion: Convincing consumers to make a purchase decision.
- Loyalty: Building long-term relationships and turning customers into advocates.
Within the B2C sphere, the marketing funnel can also be referred to as the Purchase Funnel. Essentially this outlines the buyer's journey within a website, from the product page to adding items to the cart, and ultimately checkout.
Conversion rate
This is probably the most important metric or marketing KPI for measuring performance. Conversion rate records the percentage of users who have completed a desired action.
It helps assess if a certain action or campaign was successful or not and indicates what actions need to be taken accordingly.
Marketers or growth specialists can define their own different conversion rates; For example - one could measure the traffic to cart conversion rate (customers that arrived at a site and placed a product in the cart), or the level of traffic to a newsletter signup (the amount of visitors that ended up subscribing to a newsletter).
Traffic to Cart Conversion Rate: This measures the percentage of website visitors who add items to their shopping cart. It helps assess the effectiveness of product visibility, website design, and the ease of adding items to the cart.
Cart to Purchase Conversion Rate: This metric indicates the percentage of visitors who complete a purchase after adding items to their cart. It reflects the persuasiveness of product descriptions, pricing, checkout process, and overall user experience.
Traffic to Newsletter Signup Conversion Rate: This measures the percentage of website visitors who subscribe to the company's newsletter. It gauges the appeal of the content, incentives offered for signing up, and the placement and visibility of newsletter signup prompts.
Conversion rates are calculated by taking the total number of users who 'convert' (for example, by clicking on an advertisement), dividing it by the overall size of the audience and converting that figure into a percentage.
For example, to calculate conversion rate of visitors > free trial, you need to divide the number of free trial signups by the total number of visitors. So , if you have 500 visitors to a free trial campaign landing page, and 45 of those visitors subscribe to a free trial, you have a conversion rate of 45/500, or 9%.
Checkout conversion rate
A subsection of conversion rate, and a major component in e-commerce businesses, this B2C KPI marketing metric refers to how many leads ‘convert’ into actual paying customers. This can also be referred to as macro-conversion, whereas a micro-conversion can refer to general engagement with the business (as mentioned above.)
Return on Investment (ROI)
While there are creative ways to cut costs and stay resourceful, marketing campaigns cost money, especially large ones aimed at attracting a lot of eyeballs. This is why ROI (return on investment) is crucial to your overall marketing costs and budget. ROI is the biggest determinant of cost allocation, with the goal being to get the most revenue possible with the least amount of investment.
Calculate ROI: Divide Net Profit by Cost of Investment, then multiply by 100%.
For example, if you invest $10,000 and generate $15,000 in revenue, with a net profit of $5,000, you would need to divide 5,000 by 10,000 and turn it into percentage - 50%.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the total expense of marketing to get a single customer. It covers the costs of marketing campaigns and other related expenses necessary to attract new customers, needless to say, it's important.
The CAC formula is calculated by dividing the total marketing costs by the number of customers acquired during the period.
For instance, if your monthly marketing expenditure amounts to $5000 and you acquire 1000 new customers, your CAC would be $5.
AOV (Average Order Value)
A crucial metric within the e-commerce industry, the average order value (AOV) measures the average total of every order placed with a merchant over a defined period of time and is a key factor in business decisions for online stores. It is calculated by dividing the total revenue by the total number of orders.
To find the Average Order Value (AOV), you divide the total revenue by the number of orders placed. For example, if you made $4000 from 160 orders this month, your AOV is $25.
Calculation:
$4000 / 160 = $25
Lifetime Value (CLV or LTV)
Customer Lifetime Value (CLV or LTV) is a metric that represents the total revenue a business can expect from a single customer over the entire duration of their relationship. It's a crucial measure for understanding the long-term value that each customer brings to a business. CLV takes into account not only the initial purchase but also the potential for repeat purchases and the overall loyalty of the customer. The customer lifetime value formula is:
Customer Lifetime Value = Customer Value x Average Customer Lifespan.
This gives you the revenue expected from an average customer over their time spent with your business.
Churn Rate and Retention Rate:
This time a pair of crucial B2C marketing KPIS: Churn Rate and Retention Rate are two key performance indicators (KPIs) used to measure customer loyalty and engagement.
Churn Rate:
This metric represents the percentage of customers who discontinue using a product or service within a specific period of time. It reflects the rate at which customers "churn out" from a business.
The formula to calculate churn rate is as follows: Lost Customers ÷ Total Customers at the Start of Time Period x 100.
For instance, if your business had 250 customers at the beginning of the month and lost 10 customers by the end, you would divide 10 by 250. The result is 0.04. Then, multiply 0.04 by 100, which equals a 4% monthly churn rate.
Retention Rate:
This metric indicates the percentage of customers who continue to use a product or service over a certain period of time. It measures the ability of a business to retain its existing customers and prevent them from churning.
The formula for calculating retention rate is: ((Number of Customers at the End of a Period - Number of New Customers Acquired During that Period) ÷ Number of Customers at the Start of the Period)) x 100.
For example, if your business started with 500 customers, acquired 100 new customers, and ended after a certain period of time with 550 customers, the retention rate would be: (550 - 100) ÷ 500) x 100 = (450 ÷ 500) x 100 = 90%.
Tracking traffic source and volume
Web traffic sources are the various ways people arrive at a website.They give us clues about where our visitors come from, the volume of traffic, and how they discovered the content. Monitoring these sources and assessing the amount of traffic helps manage your online presence and decide where to invest resources wisely.
Typically, these sources include:
- Direct Traffic: Folks who type our website URL directly into their browser or use a bookmark.
- Organic Search: Those who stumble upon our site through search engine results after typing in relevant keywords.
- Referral Traffic: Visitors who click on links from other websites, blogs, or social media platforms.
- Social Media Traffic: People who find our site via links shared on social media platforms like Facebook, Twitter, and Instagram.
- Paid Search: Visitors who click on ads displayed in search engine results.
- Paid social: Users who click on ads or promoted content on social media platforms.
- Email Marketing: People who click on links in emails or newsletters sent by us or our affiliates.
- Display Advertising: Visitors who click on banner ads or display ads placed on other websites.
An example taken from hubspot traffic sources report
Click-through Rate (CTR)
Click-through rate refers to the marketing metric that measures how often people click on a link, ad, email, or any piece of content in general. This tells us how successful the piece of content was in capturing a person's attention. The higher the click-through rate, the more successful the ad has been in generating interest.
It's important to keep in mind that these numbers are typically low when referring to ads, as many internet users today have developed ad fatigue (the average American sees somewhere in the region of 4,000 to 10,000 ads every day.) A typical click-through rate may be only about two users per 1,000 views (or impressions), or 0.2%.
Email Open Rate
If your strategy involves email marketing, understanding your Email Open Rate KPI is crucial. This tells you how well your email marketing is working as it indicates the percentage of people who open the emails you send. Many digital marketers love to focus on the size of their email list, but what use is a huge list if no one's clicking? A higher open rate means your subject lines are grabbing attention, while a lower one might mean they need some tweaking.
Which KPIs do I establish?
When establishing which marketing KPIs for you are most important to your ecommerce store or B2C company, it's essential to look at the bigger picture and consider how different KPIs interact with each other. For example, while a high conversion rate may seem great, if the customer acquisition cost is too high, it could significantly impact your overall ROI. In this instance, you would ask yourself why the CAC is higher than usual or why your top line is low while conversion rates seem to remain stable.
By analyzing multiple KPIs together, you can gain a more comprehensive understanding of the performance of your marketing efforts and make better decisions.
The KPIs measured can be adjusted periodically based on your marketing priorities and the current challenges in your sales funnel. For instance, after launching a service or product, you may prioritize driving traffic to it. Once you achieve this, you can then shift your focus to converting the generated traffic. After successfully converting leads, you can redirect your focus to metrics like Lifetime Value (LTV) or the percentage of repeat customers, and so forth.
In conclusion, investing time and resources into understanding and leveraging B2C KPIs is essential for staying ahead in the dynamic realm of marketing and achieving sustainable success in today's B2C landscape.
Checkout fail. It's a familiar pain for marketers.
After investing thousands of dollars in targeting and re-targeting, the excitement of a potential customer placing an order turns into frustration when they fail to convert into a paying customer.
And in many of those cases, it’s due to payment decline.
The hidden cost of checkout churn
Did you know? More than 10% of checkout purchases get thrown out of the funnel right at the conversion stage due to credit card declines. The user enters his credit card number, hits “purchase”, and receives a failed transaction notice.
Those failed transactions can translate into millions of $ lost for your business, not including the lost marketing costs.
Here's another nugget: 30% of failed checkouts can actually be recovered into a closed deal.
With Bounce’s AI-based payment solution, companies can save up to millions of dollars annually, gaining a higher return on their marketing efforts and lifting their top line by 5%!
The cumulative year-over-year impact of recovering lost checkouts is enormous.
It also goes way beyond immediate top-line revenue.
The fuller picture: understanding company growth impact
Let's explore how failed checkouts influence your business's growth and performance:
- Top-line Impact: Lost deals directly dent total revenue, affecting company growth.
- Customer Acquisition Cost (CAC): Each lost deal not only hampers revenue but also resets the clock on acquiring new customers and increasing your average CAC.
- Retargeting Costs: A failed checkout experience is likely to prompt increased spending on retargeting campaigns to re-engage users and target new potential ones.
- LTV and Repeat Customers: A declined transaction at checkout leads to a bad user experience, and by that, you risk losing your customer permanently, impacting both the lifetime value (LTV) and the rate of repeat business.
- Conversion Rates: Checkout failures directly affect checkout conversion rates and the success of the overall marketing funnel, with fewer leads and visitors that turn into customers and repeat customers.
- Purchase Size: Customers facing declined transactions tend to abandon their purchase initiative entirely. Of the few that do retry, they will often revisit their cart and remove purchases, resulting in a lower overall purchase value.
Unlocking lost checkout revenue with Bounce
Bounce helps companies prevent revenue loss and all other negative impacts of declined payments.
Our payment recovery platform uses ML to analyze millions of data points, identifying which checkout declines are valid and which ones should not have been declined. Our solution recovers over 30% of payment declines, in real time.
Bounce seamlessly integrates into your existing checkout process, providing the user with a positive and smooth experience when identified as valid. We’re so sure of our data that the service is risk-free. Your customers enjoy a better checkout experience, and you enjoy a higher return on your marketing efforts.
Here’s how our checkout recovery helps our customers recover tens of thousands of dollars in lost checkout revenue.
Getting your customers to complete their first purchase is hard, and getting them to come back to make another purchase can be even harder. In many cases, your marketing costs on acquiring a new customer are so high, that you will spend more that you are getting back. This is why merchants today are focused on a good customer experience, that will make their customer want to come back to their store and buy again.
It is very frustrating that in some cases, even though you were doing everything right, that acquired customer will not turn into a repeating one. Declined payments are one of these cases, and it has a major impact on your KPIs.
Buyers that experienced an issue with their payment, are much less likely to come back to your store and turn into the loyal customer you are aiming for. Yet, failed payments often seem like something that is out of your control. Well, it’s not.
Bounce’s solution ensures that those good customers will not experience the frustration of a payment issue. Our real time ML solution analyzes millions of data points to identify the good users in real time. The impact is clear - these users are not only completing their first checkout deal, they are also coming back to make further purchases. Our data show that customers that were approved by Bounce, have a ±50% more chance to come back, vs. the ones that experience a payment decline. This has an amazing effect on your LTV and top line.