TRANSFORMING THE PAYMENT EXPERIENCE INTO A SALES TOOL

Transcription

1 WHITE PAPER TRANSFORMING THE PAYMENT EXPERIENCE INTO A SALES TOOL 7 MARKETING BEST PRACTICES THAT HELP INCREASE INCREMENTAL CONVERSION RATES EXECUTIVE SUMMARY Recent research suggests that few online merchants pay much attention to their customers experience with the payment process. This can be a costly oversight, since the customer s payment experience plays a critical role in converting sales if the payment experience isn t positive the consumer is more likely to abandon a purchase. Conversely, if the merchant provides an exceptional payment experience, the customer is more likely to complete the transaction and even become a repeat customer. This whitepaper is for merchants who are interested in using proven marketing principles and tactics to maximize the conversion opportunities that exist as part of the online checkout process. CONTENTS 1 INTORDUCTION & BACKGROUND 4 DRIVING SUCCESS THROUGH OPTIMIZATION 7 ABOUT DIGITAL RIVER WORLD PAYMENTS 2 EVALUATING THE SHOPPING EXPERIENCE 5 ADDITIONAL TESTING-RELATED TACTICS 3 SEVEN CHECKOUT PAGE BEST PRACTICES 6 CONCLUSION

2 1 INTRODUCTION & BACKGROUND The four Ps of marketing (product, price, promotion and placement) traditionally represent the most crucial elements for successfully bringing a new offering to market. But when it comes to e-commerce, and especially when bringing a product to a global marketplace, an effective marketing mix must include a fifth P: payments. Why payments? A merchant may have done everything right and covered each of the traditional four Ps. However, true success is only measured by the completed purchase. Most merchants still pay more attention to other aspects of conversion optimization than they pay to their payments program (the things that happen after the customer clicks buy ). This failure to consider the fifth P of marketing is a missed opportunity that can affect short- and long-term business success. A recent Javelin Strategy & Research study 1 evaluated online retail companies e-payment websites and assigned scores for consumer-facing criteria, including payment information, payment options, payment security and customer support. Many top online merchants earned surprisingly low ratings in these important payment areas. This oversight is particularly interesting in light of how easy it is to implement the most effective best practices and tactics. 2 2 EVALUATING THE SHOPPING EXPERIENCE The golden rule of sales is to make it easy for customers to buy. This includes removing all areas of potential friction and consumer concern from the buying process. The easiest way to do this is to evaluate a program from the customer s perspective put yourself in your customers shoes and imagine their experiences, from the home page all the way to confirming a purchase. Here are some questions to consider: Are payment terms available before I arrive at checkout? Can I pay with my preferred and trusted payment option? Is this a secure site will my personal data be handled in a safe way? If I buy now, would it be easy to return the goods? What makes me trust or not trust this merchant? Can I access all the information I want and get through the entire payment process regardless of the device I m using? Does the merchant recognize me as a returning customer and ease the process for another purchase? 1 Javelin Strategy & Research, 2011 Online Retail Payments Scorecard: New Options to Maximize Online Shopping Revenue, October To download the full report please visit: com/form/javelin-2011-online-payments-scorecard 2 The guidelines in this white paper are based on the Javelin Strategy & Research study and Digital River World Payments extensive experience optimizing payment strategies for some of the world s largest e-commerce brands. 2

3 3 SEVEN CHECKOUT PAGE BEST PRACTICES Anything that potentially slows a customer s momentum could stall a purchase altogether. The following best practices help ensure that buyers move smoothly and quickly through the purchase to the final sale. Best Practice #1: Display Payments Information throughout the Customer Journey Customers should see payment-related information, such as payment options and policies, on all pages of the e-store: home page, product pages and shopping cart. Some shoppers will leave and go right to a competitor if they don t see their preferred payment options or a free-return policy.equally, don t leave the burden on your consumers to search your site for payment terms and conditions. Make sure this information is clear and easily accessible. Are payment terms available before I arrive at checkout? Best Practice #1: Payment option offering is available in the website footer throughout the entire customer journey. Image source: 3

4 3 Best Practice #2: Offer Relevant Payment Options The key word here is relevant. A payment that is a standard in some markets may be unfamiliar in others. For example, alternative payment options such as e-wallets and internet bank payments are already firmly established in many European and Asian markets; however, they are still gaining popularity in many other countries. Can I pay with my preferred and trusted payment option? Make sure you really know what the relevant payment options for your target markets are. Also, be sure you understand how local or alternative payment flows, including re-directs, affect the customer s payment journey on your site. Working with a payment partner with local experience will help you understand local market preferences, how relevant they are to your business model and target audience, and how to implement them into your existing payment program. Best Practice #3: Provide Clear Information on Payment Security Questions Trust and security are key factors in determining a consumer s level of comfort when buying and paying online. According to Javelin 3, 34% of consumers claim they do not shop online because they are concerned about debit and credit card fraud. Payment security information should be easily accessible throughout the customer journey. It can be displayed on a page or included in a payment FAQ. Either way, it should include the following: security seals, depending on the local adoption of such standards information on payment partners and PCI compliance, how personal data will be handled/stored and by whom, and consumer rights in the local country. Is this a secure site will my personal data be handled in a safe way? As important as it is to make security information available to the customer, it is equally important to avoid a cluttered or confusing checkout page. Keeping it simple makes it easier for the consumer to buy. 3 Javelin Strategy & Research, 2011 Online Retail Payments Scorecard: New Options to Maximize Online Shopping Revenue 4

5 3 Best Practice #4: Display a Return Policy In the retail segment, the return policy often plays a key role in the consumer s buying decision. Letting a consumer order now, get a chance to touch and feel the product at home, and then decide whether to keep it or return it at no cost is a very effective way of getting orders in place. Make sure you display your return policy benefits clearly on the payment page and preferably throughout the customer s buying journey. If I buy now, would it be easy to return the goods? Image source: Best Practice #5: Localize Your Payment Page Localizing your online store makes consumers feel safe and secure and, therefore, more likely to buy. One way to do this is to partner with a payments brand that is locally known and trusted. In China, for example, Alipay is the most popular e-wallet for online payments with more than 500 million users. If local consumers see the Alipay logo on your site, they are more likely to complete their purchases. What makes me trust or not trust this merchant? Other localization tactics include: translating site and payment pages into a local language, adding the ability to pay in a local currency, offering locally relevant payment options, and supporting local standard formats for mandatory address fields. 5

6 3 Best Practice #6: Adapt Your Site to Different Devices. Do you know how your customers prefer to connect with you? Regardless of what device they use computer, mobile or tablet make sure the payment experience is optimized to drive sales in that channel. You need to strike a balance so that your site supports a particular device format and the customer still recognizes your site design and buying process logic enough to feel secure buying. Can I access all the information I want and get through the entire payment process regardless of the device I m using? A few simple tactics can be used to ensure a payment page provides an optimized payment experience for mobile or tablet users. These work as a basic pre-launch checklist for any mobile site. It takes as few clicks as possible to buy. Customers see large buttons. Payment tokens and user profiles facilitate stored account or single click checkout. The screen size adjusts to the device. Brand and buying processing logic is maintained but kept minimalistic Best Practice #7: Use Tokenization Techniques to Recognize Returning Customers Tokenization safely stores sensitive customer payment information for future purchases. Once your customer is logged in on your site the software prepopulates payment page fields. This makes the customer journey to the pay button faster and smoother by minimizing checkout time and by removing more obstacles between the customer and an immediate sale. Make sure your payment partner s tokenization solution keeps you and your system in compliance with payment industry regulations such as PCI. Does the merchant recognize me as a returning customer and ease the process for another purchase? 6

7 4 DRIVING SUCCESS THROUGH OPTIMIZATION All these best practices succeed or fail based on your knowledge of how your customers make purchase decisions and prefer to shop. Payment option logos, the order of payment options, buy button color, payment security seals all of these can affect consumer behavior during that crucial last step of the e-commerce funnel. Your customers behaviors can tell you which elements matter. And the only way you can unlock that behavior data is by testing changes and measuring the results. Mining Customer Behavior Data Many e-merchants choose to outsource their payment pages to payment providers who can take on the high security responsibilities required in today s online payments world. However, merchants should always maintain control of their customer behavior data. Payment partners should give merchants access to the checkout performance data they need to explore, analyze and refine their sites. By tracking metrics such as successful payment orders, average order value, decline rates and chargebacks, merchants get the data they need to effectively manage their payments programs on a global basis. Customer behavior data also helps merchants discover the effectiveness of various sales and optimization tactics. Will sales volume lift when adding a local payment option in a certain market? Did decline rates change after introducing a local payment option? What are conversion rates by geography or locale? What are conversion rates per access device or sales channel? 7

8 4 Checkout Testing Tactics Merchants should test the performance of different payment options and checkout page layouts the same way marketers test product page layouts and acquisition banners. Common sense and best practices are a great way to get started. But merchants should use a metric-based approach if they want to really understand customers behaviors and preferences. This is the best way to maximize every last drop of revenue potential from an online store, checkout or payment program. Popular testing tools include: A/B Testing: Two versions of a localized payment page are created (A and B). Site traffic is randomly directed to each version and data is gathered to help you measure which version gave you the best results (highest click-through rate, largest average order value, etc.). A/B testing works well for broad and sweeping changes and provides high-level insights into payment page performance. Multivariate Testing: This involves simultaneously testing the effect of multiple variables. For example, will putting a security seal next to the call to action while clearly displaying payment option logos generate a higher conversion rate than a control page with the security seal in the page header and no payment option logos? Multivariate testing can provide more granular insights into how different elements affect customer behavior at the checkout. Ongoing Optimization Testing is only valuable if you take immediate action and make changes based on the results. It is important to see payments not as a static element but as an ongoing process requiring constant fine-tuning. Once you have conducted your tests and implemented changes to your payment page, it will be time to test again. 8

9 5 ADDITIONAL TESTING-RELATED TACTICS Dynamic Personalization With this tactic you use the results from multivariate tests to create customized experiences for specific customer segments. You can also use segment-specific test results to personalize promotions and communications. Remarketing Remarketing tactics target shoppers based on a customer s previously identified interest a customer sees pet store ads after searching for dog collars. One excellent use relates to abandoned carts. Recent research 4 suggests that many consumers use the shopping cart as a wish list that they populate and refer back to multiple times as they consider their purchases. An astonishing 75% of cart abandoners actually return to their carts to either place an order or abandon again. This suggests that cart abandonment is part of the normal purchase cycle and should not be automatically viewed as a lost sale or lost customer. It could be easy to send a remarketing to people who have waiting carts. You can also promote personalized offers based on your testing results. From a payment strategy perspective, you can drive revenue by offering a discount for customers paying with low-cost payment options. With your customer behavior data in hand, the options are endless. 4 The Conversion Academy, The Science of Shopping Cart Abandonment,

10 6 CONCLUSION Clearly a payments program can be so much more than a static series of checkout pages. By using some relatively simple checkout optimization tactics and more sophisticated marketing techniques, merchants can measurably improve conversions and sales. Armed with customer behavior data, merchants can encourage sales right up to the final mouse click. The beauty of this strategy is that the payment page is already in place and the data is already coming in. Merchants need simply grab the reins to capture additional revenue. Success also requires working with a payment partner who can support your checkout optimization strategies in terms of expertise in local markets, tools to measure checkout performance and access to payment related data. Once this element is in place, it s simply a matter of deciding how you want to proceed. 10

11 7 ABOUT DIGITAL RIVER WORLD PAYMENTS As a full-service payment solution provider Digital River World Payments helps e-merchants around the globe build and manage successful global payment programs. Our offering includes solutions that help merchants optimize their payment strategies throughout every step of the payment lifecycle. These solutions prove so successful that some of the world s leading e-commerce companies use our portfolio of comprehensive e-payments technologies, tools and services to drive online revenue and growth. Digital River World Payments focuses on three key areas of the payment experience a method proven to increase sales and extend customer lifetime value. Creating an effective payment page: With our hosted payment page and Page Builder tool you can instantly create, edit and launch new page versions. Choose localized best practice templates or customize them to fit your needs. Providing locally relevant payment options: We connect you to over 200 payment options in 190 countries and 170 currencies. Plus, we have inhouse experience acting as a merchant in local markets worldwide. Ongoing checkout optimization: You ll find every tool you need to monitor payment program performance, conduct A/B tests of your local payment page, and finetune your design to drive conversion and revenue. Contact us Contact us today to learn how Digital River World Payments can help optimize your payments program and drive incremental revenue. E: sales@digitalriverpayments.com US: UK: +44 (0) GER: +49 (0) Digital River, Inc. All rights reserved. Unauthorized duplication prohibited. Trademarks and service marks of other companies used in this document are the property of their respective owners. 11