How to Generate Revenue from Abandoned Carts

With 60-70 percent of ecommerce customers abandoning their carts at the last stage, there is clearly a big opportunity for businesses to tap into a potentially huge revenue stream.

Let's start by looking at some of the reasons why people might abandon their cart from Salecycle:

1. High additional costs: This is a common issue for customers buying online, particularly with shipping.
2. Poor customer service: A lack of clarity can put customers off, such as a strict returns policy or little information on the products.
3. A complicated check out: The checkout process can be long winded and involve putting in too many details. A lengthy and complicated process is a definite turn off for potential customers
4. Lack of payment options: A limited list of payment options (i.e., card payments only can put customers off completing any payment process)
5. Just window shopping: There is an increasing trend toward window shopping and just doing general research on a product they may not be ready to buy now but maybe in the future.

Obviously there are other factors at play, but these are the key reasons why customers might abandon their carts. Fortunately, there are strategies where you can either reduce your abandoned cart rate or win those customers back.

Be upfront about fees

One thing all customers want is transparency. Nobody likes to be surprised with hidden fees at the last minute, so it is a good idea to always be upfront about any additional costs such as shipping and taxes. There are several ways of doing this, such as having the rates next to the price of each product, on the homepage or a in a box on the catalog. Walmart.com (see image) includes its shipping fee schedule on each product page.

Another thing companies should consider is whether to offer free shipping. For some small businesses, this could be too costly to offer universally across all purchases so perhaps look at setting a minimal order to qualify for free shipping, at a value that makes sense for your business, for example $20, $50 or $100 and so on. This also presents an opportunity for upsell, so you cover the cost of shipping or more by the customer making additional purchases. A calculator may want to be included on each page that calculates how much more a person will need to spend to qualify for free shipping.

An alternative tactic is to offer free shipping with registration or subscription to your website. It is a great way of fostering a loyal customer base.

The bottom line is though, be upfront. Don't wait until the end of the process to show additional costs. A combination of surveys suggest 25 percent of cart abandonment happens for this reason.

Customer service matters

When a customer feels comfortable with the brand or site they are buying from, they are more likely to go through with the purchase. This can be achieved by offering a clear guarantee on the product and no fuss returns policy. It always helps if the brand is trusted and well known, so even if you are a small business it is important to focus on building a healthy reputation among your customers.

As obvious as it is, making your customers feel confident in buying from you is one of the key elements of setting up your business for success.

A smooth checkout process = profit

This is an area that can be overlooked, which is the checkout process. Too many are overly complicated, with forced sign up and long forms for personal details. So, it is worth looking at the current process and asking yourselves whether you really need this information to complete the process.

Another factor is a number of customers leave the checkout process because the website crashed or at least disrupted during the process. They can be due to wider Internet issues, but if it happens to your site a bit too often, look at the reasons why and alleviate the frustrations of your buyers.

Along with this, many sites now remember a customer's details after they first buy something so the buyer would only need to complete whatever is needed for security - whether it's the CVC code on a card or the password for PayPal.

Increasingly, we are also seeing ecommerce businesses offer different ways of paying for online purchases, which are far easier and convenient for customers to use such as PayPal, Venmo and Google Wallet are just a few examples of this. Those methods may not have taken off quite yet but it is good to be ahead of the game - and take out another reason for an abandoned cart.

Remind the customer, bring them back

We've looked at ways of preventing abandoned carts but sometimes there is no avoiding it. Customers are becoming savvy when it comes to buying online and they know it can pay to do a bit of research on the best place to buy a product. They can also simply get distracted during the process and forget to complete their purchase. At the end of the day, if someone has progressed to the final stage of the checkout, they are a hot lead.

Therefore, it would make sense to send an automated email within 24 hours of a customer abandoning their cart. The important thing here is to keep the tone friendly and open. If the product was expensive for its type, offer alternative products or a special discount.

Abandoned cart emails generate around 15 percent recovery rate, though some more efficient campaigns can recover up to 35 percent of lost revenue and each abandoned cart email generates $8 in revenue.

Make it easy for your customers

At the end of the day, customers are just looking for convenience as well as cost. Sometimes customers are willing to pay a bit more for a product from a business or brand they trust. To win that trust, businesses should proactively provide customers with an easy, transparent way to purchase the products they want. And if they abandon the cart for whatever reason, chase them.

None of the solutions above are particularly expensive and if they can be implemented efficiently, the rewards will come to your business.

About the Author
Karl Kangur is the founder and CEO of MRR Media, offering growth solutions for SaaS businesses. Aside from his main business, he has sold many other of his own ventures as well as advising successful companies around the world.