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March 30, 2015updated 04 Apr 2017 4:03pm

Minimise online abandonment: know your customer

For online merchants, high abandonment rates are a nightmare. So much effort has gone into the design and usability of the website and into back-end technology, only for customers to have a last minute change of heart and click away. Emma Allen, head of Merchant Solutions at SIX Payment Services, comments

By Verdict Staff

For online merchants, high abandonment rates are a nightmare. So much effort has gone into the design and usability of the website and into back-end technology, only for customers to have a last minute change of heart and click away. Emma Allen, head of Merchant Solutions at SIX Payment Services, comments

The golden rule to minimise abandonment is to know your customer. There are some straightforward steps that all merchants can take to minimise abandonment.

First of all, ensure that delivery charges are reasonable and avoid levying unexpected extra charges on payments, such as taxes or hidden ‘processing fees’. This is considered bad practice and a major cause of abandonment. It is much better to be upfront about all fees at an early stage. Recent European legislation will stop some surcharges, and merchants should certainly avoid ‘springing’ them on customers, late in a process.

Simplicity is key, both in terms of the number of pages and questions, and the amount of information that customers are expected to provide. With a growing percentage of e-commerce taking place on mobile devices including smartphones, tablets and hybrids, it is impractical to expect people to enter non-essential text into online forms. It’s about making a positive and streamlined experience on these devices.

The ideal is a minimal number of boxes to tick or buttons to click, so that the process is suitable for small screen devices and is intuitive, quick and straightforward. Some say you should be able to get through a payment process using one hand, while on a bus.
Experts advise merchants to avoid making customers register for a site. Whilst this may seem tempting in terms of potential future
marketing opportunities, this requirement annoys customers and slows down the purchasing process. So even though it provides
helpful, potentially lucrative information for a merchant, it is a significant obstacle to good payment practice.

Equally, website designers need to concentrate on quick-loading and functioning pages. Slow load times are another major cause of payment abandonment. A helpful rule here is to design sites for the least advanced technology that customers are likely to use.

Too often, designers themselves are using the latest, highest powered devices, which load pages instantly. But only a minority of their customers have such mega machines. The processing power needed to run such systems can lead to frustrating delays and abandonment.

Speed is also a key factor in keeping a customer’s interest in the purchase. Given too long to reflect or be distracted, they may abandon the purchase simply out of boredom. People say to themselves: "Yes, I want this, let’s transact." The quicker you can perform the transaction, the less time you give consumers to drop out. The goal here is ‘one touch’ payment.

Beyond understanding customers, understanding different European countries is also crucial to merchants’ efforts to reduce abandonment. Especially in international e-commerce, merchants need to understand their target audience’s expectations in various countries, so they can meet them, in order to retain them. The important thing is to offer the preferred payment method: you have to offer what’s expected.

Different geographies have developed differently in terms of their preferred payment methods. Credit and debit card payments are the most common means of payment in the UK, France, Spain and Italy.

However in Germany, for example, customers are used to receiving an invoice via bank transfer. This habit, huge return rates included, is down to the large catalogue merchants that became so popular in the ’70s and ’80s.

Increasingly popular and more merchantfriendly, from a fee and a risk point-of-view, is SEPA direct debit i.e. charging the bank
account through an interface with the customer’s e-banking. On average, German online merchants offer a choice of five and a half different payment methods, and a study has shown that the greater the variety, the lower the abandonment rates.

In Eastern Europe we see another phenomenon: while the credit card population soars and usage increases in urban areas, there is still a considerable share of legacy practices including cash payment on delivery. As far as the underlying technology goes, card providers routinely use ‘tokenised’ information, where a random number is used to replace a customer’s actual card number. This has the security advantage of being useless to a would-be hacker.

Used with thumbprint identification, which can now be used to authenticate the card holder, it has the potential to speed up payments, cutting down the number of stages needed to perform a secure transaction. These kind of ‘one-touch’ payment systems are becoming ever more widespread, as their popularity and ease of use is broadly recognised. The introduction of universally accepted ‘ewallet’ platforms will help address abandonment and improve loyalty.

Other ways in which technology can assist include identifying abnormal purchase behaviour which could be fraudulent, such as multiple email or delivery addresses relating to the same card. This will prompt more scrutiny of payments.

By the same token, ‘normal’ payment behaviour can lead to speeded up processes, which helps reduce abandonment. The better merchants and banks understand and know their customers, the faster they can process payments, to everyone’s satisfaction.

People shop more in places where they feel comfortable. It’s partly about product range and pricing, but also about ease of payment. Certainly, many customers prefer to shop on large, well-known and reputed e-commerce sites which reassure them on security concerns. And pricing is absolutely a key reason for many, perhaps the majority, of abandonments.

According to a survey of the most frequent reasons for dropping out of online purchases, identified customers comparison shopping as a major reason.

Another potentially overlooked issue is that of coupon codes and promotional offers: if a customer sees these options on a site, they commonly abandon the process and go off in search of the code, only returning if they have found it. Similarly, consumers expect to be able to use vouchers and loyalty schemes in all channels.

Together with the need to offer a suitable choice of payment methods, these are the kind of details that merchants need to pick up on, as they get to know their customers and make all that e-commerce effort and investment worthwhile.

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