e-Commerce Insights

Plus ca change, plus c’est la meme chose.  Just because everything is different, doesn’t mean that anything has changed.  Way back in the middle of the 20th century, business owners and advertising/marketing specialists learned through experience that the response rate to advertising campaigns, known today in the internet age as the conversion rate, is about 3%.  When you distribute a marketing flier in a chosen geography to announce a new business, for example, either by door to door leafleting or through a mailing, you can expect that 3% or so of the recipients will show up and buy at some point.

In the internet age, Facebook, Instagram, Twitter and YouTube will announce the grand opening.  The business owner will spend several thousand dollars to launch a website that’s e-commerce ready, with a user-friendly and secure payment system and reliable shipping.  Social media accounts are created, text and photos begin the digital marketing campaign.  According to Statista, U.S. retail B2C e-commerce sales in 2017 were approximately $409,208,000 and 2018 retail B2C e-commerce sales have been projected to reach or exceed $461,582,000.

That’s all to the good, but recent research indicates that the internet age has only barely advanced the original direct marketing response rate.  E-commerce sales conversion rates are about 4%, meaning that 96% of your website visitors do not buy.  Your website may be able to attract customers from all over the world, but no matter.  Whether your customers are down the street or in Amsterdam, aided by technology or looking at a flier that was left in the entrance of their apartment building, only a handful will respond to your advertising outreach.

The offline (i.e., in person) sales conversion rate is much more favorable, estimated at 30%. Why such a big gap between online and offline purchasing? Consumer behavior researchers note that trust is integral to making a purchase online or offline, but I’ve not seen research on why trust develops at a much greater rate in offline shopping. I suppose it can be attributed to seeing is believing?

There is another factor as well, one that seems to be overlooked when the discrepancy between online and offline sales conversion rates are compared and that is, the in-store sales help.  The good ones can lead a customer down the garden path with a nice smile, a warm greeting, knowledge of the merchandise and the ability to answer questions and reassure.  Good sales help are integral to generating revenue for the store.

Derrick Neufeld, Associate Professor of Information Systems at Western University’s Ivey Business School in Ontario, Canada and Mahdi Roghanizad, Assistant Professor at Huron University College also at Western University in Ontario, Canada, designed an experiment to study motivating factors in 245 research subjects and learn what might influence online purchases, from facts about secure online payments to the website’s font sizes and colors.  The research subjects were asked to visit the website of a bookstore in Australia that had been in business for 17 years and with whom none of them had previously known or patronized and to then make some buying decisions.

Neufeld and Roghanizad found, surprisingly, that objective information about privacy and secure payment systems have less influence on purchasing than do subjective factors in website design that signal trust.  Online purchases from an unknown entity, in particular, involve risk and potential customers rely more on subjective clues that communicate trust, such as “professionalism” and aesthetics, to make themselves feel comfortable enough to put their money down.

So how might you use this information to support online purchases from your company website? It sounds as if you’d be advised to work with a very talented web designer who understands both the aesthetic and technical aspects of the craft.  The e-commerce focused website must have attractive page layouts and fonts, expert product photography (and maybe a video, too), colors that psychologists have determined will appeal to customers who are known to buy your B2C product and a good overall flow to the website pages.  I recommend that even if it’s a second-tier priority, include a line that verifies the security and privacy of customer financial information.

Think of your e-commerce store in the way that proprietors of bricks and mortar locations do and create an experience that communicates the best that your brand has to offer.  Make your website an attractive, welcoming environment that offers quality merchandise, intuitive navigation and excellent customer service.  Make shopping a satisfying experience, as it is meant to be.

Thanks for reading,

Kim

Photograph: Custom tailoring at Lagu Hong Kong Tailor in Hong Kong, China (2012)

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The Buying Process Is In Effect

In 2012,  the global research and advisory firm Forrester Research reported that clients are as totally in the driver’s seat as we all knew anecdotally and that product and service providers have much less influence over purchasing behaviors than we enjoyed a decade or two ago.  We have left the era of the sales process and entered the realm of the buying process.  It is time to readjust your approach to marketing and sales in response to the new reality,  because what was will never be again.  Our clients are making decisions largely without our input.  Many sales professionals and consulting specialists aim to present ourselves as  “trusted advisers”  who guide the sales process and influence customer choices,  ideally for the good.  Say goodbye to all that.

According to the Forrester report,  clients now discuss product and service needs and options with their own team of trusted advisers,  which may include unknown third-party  “experts”  they find on websites like Yelp and Angie’s List.  How far along in the buying process that clients proceed without us varies by industry,  but the report indicates that 65% -90%  of the research process is often completed without assistance from sales professionals or consulting service providers.  By the time the client is ready to make a purchase,  much up-front research has usually been done and only vendor price quotes are needed.

Clients like the control of being in the driver’s seat.  A mistrust of sales practices perceived as unsavory,  combined with access to technologies that allow clients to rather easily research product and service needs once they’ve been identified,  are the driving forces behind the client independence.  Many are leery of being manipulated into paying for upgrades and add-ons that do nothing for their objectives.

In the flip from sales process to buying process,  your marketing strategy will become more prominent and your approach to sales will change.  Your marketing must first create visibility and awareness,  so that prospective clients will find your firm’s offerings and second,  create and sustain demand through exquisitely targeted messages and narratives dispensed through channels that clients trust and follow.  Content marketing will continue to grow in influence as it is distributed through your website and all social media outlets that clients trust.

Develop your content marketing to explore and discuss motivating factors that compel prospective clients to research your products and services,  solutions that you provide and benefits that clients receive,  frequently asked questions and how to buy from you.  As has long been said in academic circles,  publish or perish.  When not generating content,  do what you can to get in front of an audience and teach a workshop,  moderate a panel,  or give a presentation and further your brand as a source of expertise.  Remember also that traditional media outlets may still be important to your clients,  so the art of the press release should not be forgotten.

Whither the role of sales?  Rather than being reduced to mere order takers,  consulting service providers and sales professionals will apply their well-honed communications expertise to identifying networking opportunities and building relationships.  Content is king and having lots of good things that demonstrate your expertise come up in a search is a wonderful thing,  but in my town,  no one hires anyone that they don’t know.  If a prospect does not already know you,  then an introduction made by someone whom the prospective client trusts is the next best thing.  No amount of artfully written content will convince anyone to hire an unknown.

Networking will be the queen,  as you meet potential clients and referral sources and take the time to build relationships,  taking an interest in others’ concerns and offering to give before you receive.  The B2B buying process is a tall order for a Freelance consultant,  but we are determined to succeed and we will rise to the challenge.

Thanks for reading,

Kim