Life in the e-commerce fast lane is tough.
E-commerce bounce rates average 33.9% and go as high as 68%. Cart abandonment rates of more than 66% add to the problems that any e-commerce business faces. The growing showrooming trend further threatens the very existence of online businesses.
But here’s the good news: Shopping cart abandonment can still be viewed as an opportunity to be harnessed. And with behavioral targeting and dynamic pricing, you can recover many of those lost sales.
What is the problem?
Basically, customers have become savvier when it comes to online transactions. As belts have tightened over the previous decade, online buyers have developed a skill in finding the best deals.
In a brick-and-mortar setting, retailers would be able to assess each potential customer browsing the store. Sales staff will offer different incentives to different customers in order to make products more attractive.
In the same way, you need a way to automate your e-commerce platform so potential customers are shown offers that are appropriate for them.
This is possible through the use of big-data-driven applications that use high-level analysis of customer behavior to show each visitor the most appropriate incentive. It also gives you the potential to close more sales.
Fortunately, with a software-as-a-service (SaaS) approach, these platforms are more accessible than ever. And the improvement in your bottom line will likely be more than enough to pay for the costs of the services.
Let’s take a closer look at how they work, and then review specific solutions you can use to improve your overall conversions.
What Is Behavioral Targeting?
The ads you now see online seem more relevant to you than they were a few years ago. This is because of a mix of contextual and behavioral targeting.
You are being shown ads on the basis of your location (gleaned from your IP address) and previous online behavior, for example. The factors taken into account include cookies on your computer, ads you have clicked on and sites you have visited recently.
Behavioral targeting allows advertisers to increase the accuracy of campaigns, making them more cost effective for retailers.
But it’s beneficial to consumers too. Because of targeting, there are fewer totally irrelevant ads and more that are useful and relevant.
What Is Dynamic Pricing?
The ability to price your products flexibly can provide a huge advantage. It means you can adjust your prices automatically according to holiday dates, demand and competitor pricing.
Attractive pricing means you can capture the interest of your potential customer, reducing their tendency to look elsewhere.
Your prices are a large factor in how many customers buy your services. Dynamic pricing can adjust prices downwards when sales are slack or if your competitor is offering discounts. It can also adjust your prices upwards when competitors are out of stock or customer resistance to higher prices is low.
Sweeten the Deal – Make the Sale
In a high street store, your sales team will have a lot of discretion over when they add sweeteners to the deal. You need ways to do that in your e-commerce store too. Here are some SaaS applications that will help:
Fanplayr allows you to segment your site visitors and create offers suitable for each segment. This application works by continuously analyzing visitor behavior, including the time they spend on each page and the items they show interest in.
Fanplayr then allocates each user to a segment you’ve defined and shows that user an offer you’ve set up for that group of customers.
Making user-specific offers like this helps you maintain your brand quality image, and also to increase conversion rates by offering discounts to specific segments of your users. Slightly smaller profit margins are more than made up for with an increased conversion rate.
According to case studies published by the company, Users can boost their conversion rates by at least 14% by implementing a segmentation strategy, such as generating segment-specific coupons and targeting through A/B testing features.
Volusion offers an end-to-end e-commerce solution, which includes hosting, an online store builder, and even built-in search engine optimization mechanisms.
The entry-level plan provides a basic e-commerce platform, including a product list and shopping cart.
The premium plans provide added functionality, such as a customer relationship management (CRM) module, loyalty plans and deals of the day. These premium features are key to creating offer that improve conversions.
Apart from optimizing for conversions, Volusion also has a built-in manager for pay-per-click campaigns, helping e-commerce sellers promote their goods across other websites. According to Volusion, the service works well with brick-and-mortar companies that have set-up online stores.
Wiser enables automatic price changes within criteria that you set. You set your own pricing criteria, so you could always match any lower price in your niche, or maintain a 5% difference.
There are several pricing rules, and you can choose which ones you want to apply. The platform can track and change thousands of prices multiple times a day if need be.
So far, the company’s case studies cite success stories among online retailers through several ways.
For example, a retailer of health products was able to track competitor pricing across 40,000 products, and the ability to adjust its own prices empowered it to negotiate lower prices with suppliers when needed.
An auto parts retailer was able to find more insight into its direct competitors and automatically adjust prices across 10,000 SKUs according to competitor prices, as well as sales and supply data.
Zendesk is a CRM platform with focus on customer support, and it provides a way for both small and big enterprises to process, execute and monitor resolution of customer service concerns.
Once you have made that sale and shipped a product, it’s important to ensure that customers are happy all throughout. To do that, you need to maintain a profile, keep records, and use data to find actionable insights and easily reach out to your existing user base.
The platform integrates well with communication solutions, and provides a personalized and proactive interface, with its touted self-service helpdesk.
For tickets that require human intervention, the platform also provides a capable analytics dashboard that enables you to track performance across your support team or even benchmark the organization against others within the same industry.
All of these solutions provide low barriers to entry, meaning small businesses can get in on the game without worrying about huge capital expenditures and complicated integration with existing e-commerce solutions.
Such services come at some price, although the benefits — increased conversions, improved revenues and happier customers — make it a no-brainer.
Behavioral targeting and dynamic pricing are proven to increase sales and profits. And while they’ve been in use by big ecommerce companies for a while, they may now be a necessity for smaller companies as well.
We are at the point where customers demand the best service available, and they want it personalized and easy to access from any device.
Knowing what your customer wants and optimizing the sale is key to ensuring your business stays ahead of the competition.
How do you propose to overcome the difficulties that e-commerce faces as a sector? What would your dream SaaS service offer? Please share your thoughts using the comment box below.
Read other Crazy Egg articles by Nadav Dakner.
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