E-commerce is failing - Thin red line article series, Part 2

It's a big wall painted in red and no more “thin” red line. We are at part 2 in a series of articles on the current pain for e-commerce, and how you protect your company by solving these issues.

How e-commerce is failing

In the last article, we talked about conversion rate and that you spend a lot of money on generating traffic to your site. But money spent in vain as you don't focus enough on transforming those visitors into paying customers. You can read the previous article here --> https://www.dhirubhai.net/pulse/fearsome-truth-e-commerce-karl-lillrud

By not taking care of our visitors, and often not even of our customers the concept of e-commerce is failing and loyalty is declining.

We will go through the critical pain points backed up by global statistics and help you outrun your competitors.

Since I wrote part 1 I realized that this article series alone will not educate my readers enough so I started a separate article series that are aiming at what e-commerce is today and how it will work in the near future.

Let's start with retention. Customer retention is more important than most companies are ready to admit but it's hard to say something else when we look at the numbers.

Second time customers are 53% more likely to place a third order, and by the time they’ve placed their tenth order, they’re 83% more likely to buy again.

But did you know that research shows us that consumers normally don't buy on their first visit to a new store online?

The first visit is just like a classic window shopping browse through, but in the consumer's eyes, it's still too early to trust the store with the credit card details.

The second visit is to have a closer look at those products that the consumer found of interest after taking some time to think about it.

If the consumer now actually do find his or her way back to that store they are happy to see that it's still there which is basically the goal of the second visit. As the consumer now visited the store twice he or she now start to trust the store subconsciously.

On the third visit, obviously the store is still there and the consumer has had enough time to think things through.

The problem here is that consumers tend to get distracted. There are a million other things that they have seen since their first visit and the personal to-do list of things just keeps on growing.

Your challenge as you work with the e-commerce store is to get that visitor back to the store and to make them feel excited about it.

There are different methods of doing that, some better than others and some more customer friendly.

You need to think about your company's brand and the way you want your customers to think of you in the long run.

What is your customer retention rate?

You got your marketing team doing their job which generates traffic to your store.

They are great at what they do and deliver a massive amount of traffic to the store and thats the end of their assignment, they are hired to generate traffic and its up to the person responsible for the e-commerce site to work to take over after that.

So the person responsible for the E-commerce site in the organization uses his or her budget to make sure that they can take on the load that they expect from the traffic generating work done by the marketing team. Let's assume that the site is well built and well maintained so the extra load is not a problem.

Who is responsible for the visitors when they actually enter the store, who make sure that the visitors become paying customers?

I hope you got your conversion team with a similar budget as the marketing team, and you should have read the previous article I wrote about online conversion and how important that is.

We now step into the next area of danger, your customer retention focus.

Customer retention is all about how you get your current customers to stay as customers and become returning customers over time without never forgetting about your store.

The goal of a customer retention programs is to make sure that you retain as many customers as possible. This is often done by creating customer loyalty and brand loyalty initiatives.

But that's so old school don't you think, customers nowadays want service and they want to be treated as they are special and unique.

The classic newsletters are rarely read and might actually damage your brand in multiple ways.

1. The newsletters might distract and even irritate your customers if they are too irrelevant to them.
2. As customers want to unsubscribe it might be too difficult to unsubscribe causing more frustration and wasted time for the consumer.
3. The customer reports the email as spam causing your domain to be flagged in the global spam blacklists, causing your next newsletter to be marked as spam not only by that customer who marked it as spam but actually for all customers that are connected to the same spam blacklist.

Just think about it for a second, if you one day send out 100 000 emails to your customers, there are most probably a large number of them using Gmail.com and Outlook.com. Which are then connected to the same spam blacklists.

And every time you send your out your newsletter there are a few that mark it as spam.

I'm sure you're smarter than that and distribute your emails from some other domain than your store's domain, but wait, why is that, because you don't want it to be flagged as spamming.

Then you already know about the above and that is the problem. You already know that this is something that is damaging your brand and still it's being done to a large extent from almost every store online.

You must understand that its the great consumer experience that is building our long-term business and research shows that companies that prioritize the customer experience generate 60% higher profits than their competitors.

By being committed to building a good customer experience research shows us a 25% higher increase in customer retention and revenue than what can be seen from sales or marketing initiatives.

Proving the point that working with your customers on an experience level rather than a marketing level will increase your retention and get you more satisfied customers.

At Lizer Group we take long-term conversion seriously as that is the core of our business.

We don't want you to waste money on marketing, we want to make sure that your marketing investment results in a growing customer base.

By knowing that a large number of your visitors are not ready to buy on their first visit we have built a model that keeps the visitor engaged over time using our machine learning and automation layer to build a personalized long-term conversion dialog.

And by targeting your current customers to build up an automated retention program that is personalized to the consumer's interests and products of choice. Research shows that 86% of customers are ready to pay more for a better customer experience.

But a customer experience is not something that is related to a one time visit and the first order, customer experience is something that you build over time.

We know that time is something that you don't have that much of and that's why we always strive to bring you our smart methods and algorithms in an automation package to make sure that you spend your time where it's most needed.

Excellent customer service seems more and more rare while customers are willing to pay a premium for it. So, your focus should be to deliver on that desire, and research has already proven that customers will be happy to pay higher prices over time.

Consumers normally don't decide to buy items directly online.

Consumers do research online before making a purchase these days, and the research does not only apply to price comparison sites to find the lowest price but rather to investigate the store itself. What experience other consumers who purchased from the store express. If words are negative, a previous purchase decision will be changed and the consumer will look elsewhere to buy the product.

Operate a store that is aware of, and understands the value of good customer experience and has an amazing customer support that takes care of your most valuable possession, the customer but also the consumer, the people that visit your store but has yet not decided to buy from you for their first time.

Developing an effective retention strategy for your e-commerce is one of the most valuable things you can do to increase your revenue over time.

Don't waste that marketing budget to get one time customers to your store.

Especially as its 7 times more expensive to acquire a new customer than retain an existing one.

Now, this does not mean that you should stop working on acquiring new customers, but rather that you need to spend time on developing a customer retention strategy that will save you both time and money in the long run.

Talk to Lizer Group about how you can automate the retention strategy and what elements you should include building long-term value.

I hope this article gave you the insight to help you get started on that strategy, and that you found the answers you were looking for.

If you found interest in this article I believe that you also will be interested in reading the other article series that I'm writing about the future of e-commerce, you can find it here --> https://www.dhirubhai.net/pulse/future-e-commerce-part-1-consumer-relationship-karl-lillrud

I'm so flattered that you have read this far and as I'm sure you can see I have put a lot of effort into making this as valuable and as educational as possible for you.

Since I started writing these articles I have been overwhelmed with positive comments when I meet with readers in person, but perhaps I won't meet you for a long time, so I like to ask you for two things:

1. I love feedback, just hit the like button or write your feedback either in a personal message or in the comment field. It could simply be that you agree with me, or you can point out things that you like me to elaborate on or perhaps what you hope to read about in the next article.

These articles are meant to help and educate you but if you think I'm shooting too high or too low I need to know so that I can finetune the aim for the next article a little so that it fits you perfectly.

2. I want your help to spread the word, I have been working in this business for many years already but I rarely see these type of articles, and to me, that's an alarm bell going off. The things I talk about are to a large extent things that almost everyone in the e-commerce business should know about but most people don't. So help me help your friends, help me spread this article so that we start solving these major problems and if you're interested in talking about it more I am here, just give me a call +46733133600 or send me an email [email protected]

If you like me to come and speak at an event, a seminar, a school, or in your office just reach out to me.

About the author:

Karl Lillrud is a serial entrepreneur with 21 years of experience from this segment.

Founder of one of the first interior design e-commerce sites in the Nordic countries where he back in early 2000 learned about the many challenges that e-commerce struggle with even today.

That's why Karl with Lizer Group decided to help companies overcome these hurdles and focus on what matters most, keeping customers happy and helping the companies improve their market position. Being a public speaker and entrepreneurial mentor Karl love to share his experience and knowledge with the one goal to help others reach their success easier and faster.

Karl Lillrud

CEO of Lizer Group

[email protected]

www.lizergroup.com

+46733133600

Source:

https://www.lizergroup.com

Modelling and testing consumer trust dimensions in e-commerce

https://www.sciencedirect.com/science/article/pii/S074756321730064X

https://link.springer.com/chapter/10.1007/978-3-319-50008-9_190

https://www.invespcro.com/blog/great-customer-experience/

https://www.amazon.com/Leading-Edge-Chaos-Critical-Elements/dp/0735203121

https://blog.getresponse.com/why-email-is-the-1-customer-retention-tool.html