The strategies, as mentioned in the previous post:
- Innovate your way out
- Optimise, to squeeze more from what you have
- Cut costs by improving the customer experience
Let’s take a look at strategy 2.
Strategy 2: Optimise to squeeze more from what you have
This is primarily a marketing strategy. The idea: find out why your customers buy, and what stops them from buying. Then do more of the good stuff, and fix the bad stuff.
Digital marketers make a lot of noise about acquiring new customers. That’s certainly an essential element of a successful business. But keeping your customers happy when they get to you is worthy of at least as much attention. There’s a rule of thumb: acquiring a new customer is 6-10 times more expensive than retaining an existing customer. So a solid strategy when times are hard is to plug the holes in your “leaky bucket,” and stop website visitors from pouring out as fast as you can pour them in.
(The data that actually supports the rule of thumb is hard to come by. And I think the cost of retention is tricky to calculate because customer retention comes from good customer experience, and that comes from every area of your business. But there is some useful data quoted here at Wikipedia).
The key words: conversion and loyalty
Conversion is about making a prospective customer actually complete a transaction and buy something from you. Loyalty is about bringing them come back to shop with you again.
Ways to improve online conversion
Some good, cheap tactics:
- Take a look at the findings on Marketing Experiments, optimise your product lists [PDF], and generally follow e-commerce guidelines
- Look at data such as search logs, web analytics
- Run A/B testing to get data comparing the success of different site designs.
But there’s a problem. None of them ever brings you into direct contact with target customers. And that means that although you when customers drop out, you never know why customers drop out. What was missing from the product descriptions? How did the buying process not match customer needs? What did competitor websites do for them that yours didn’t?
The best way to optimise is to mix stats with usability tests. Stats tell you what is going on on your site, and where trouble spots may lie. Usability tests tell you what the causes of the problems are and what customers really want from you.
So. Killer tactics to really improve conversion:
- Run face to face customer tests to understand usability, customer intention and customer workflow
- Use intercept and track tools on your website to mix free-form response with clickstream recording
Ways to boost loyalty
Loyalty comes from an emotional connection. Here are some things that cause positive emotions about websites:
- Human engagement. Two good solutions: an approachable style and an online community. (Firebox.com is a good example of both).
- Polite interaction. As customers we want suggestions and ideas, but we want to stay in control. We don’t want hard sell, intrusive questions or spam. If we feel free to walk away, we feel safe to come back.
- Getting what you want. Google has built the world’s most powerful brand by giving people the information they want reliably. And Amazon suggest books and CDs you didn’t even know you wanted, but invariably find that you do. Both of these sites have gone the extra mile in making it easy for customers to find things. Because if customers can’t find things quickly, they won’t stick around.
- Customer-first behaviour at all touch points. As a customer, I have to know that you will look after me. If my item is lost during shipping or if I want to return it – give me the facility to sort my problems out quickly and efficiently online. And of course, Amazon is reknown for the high standard of care they offer right through the customer experience. And they’re looking good because if it.
Improving conversion rates, and building customer loyalty are really important strategies for surviving and prospering in a downturn. And often, its easy to make improvements in small steps too.
You’ll love part 3: Cut costs by improving the customer experience.