Understanding Revenue Leaks in E-Commerce
A lot of shop owners think of revenue loss as one giant, mysterious black hole where their sales vanish. I think itās partly because people expect āleaksā to show up as obvious issues - something broken, a dramatic bug, or an angry customer phone call. But itās rarely that cinematic.
More or less. Itās usually small annoyances or hesitations that are sprinkled across the customer journey like thorns underfoot. In my experience, money leaks out in smaller, less noticeable trickles. Customers get lost or bored on the way to checkout, and drop off the site before they can seal the deal.
They abandon carts because they feel pressured or bothered by unclear signups, surprise fees, or payment methods that donāt suit their needs. The way I see it, itās not always easy to spot these leaks either - weāre too close to our own websites to notice what a first time user is possibly feeling while exploring or trying to make a purchase. Sometimes it feels like a gut punch.
Other times, we spend months running tests just to identify a tiny problem thatās costing us thousands of dollars. There isnāt a universal formula for patching up holes and plugging leaks but there are certain things shop owners can do.
They can likely look at their websites with fresh eyes and dig deep into their analytics to find patterns. They can also talk to shoppers about their experiences and check in with customers whoāve abandoned ship after adding items to their carts.
Common Checkout Issues That Cost You Sales
People often mistake checkout issues as being a tech problem. Sure, there are places where the internet is slow and checkouts lag and people leave their carts. I Think but thatās not really what weāre talking about here.
What people miss is that as with all things in retail, itās always about the customer. The checkout process is just another opportunity for you to āserveā. Itās part of the āserviceā you offer - a streamlined checkout process is your way of offering your customer comfort and ease as they invest in you.
So when retailers get defensive or irritated at customers for leaving carts at the checkout counter, theyāre basically telling people who were trying to spend money at their store that theyāre annoying. What we need to do instead is realise that a broken checkout system isnāt about technology - itās about experience. Too many steps during checkout, too much information required, unclear instructions, tiny buttonsā¦ All of this confuses your customer and wastes time.
As people who run businesses, our job is to be mindful of how our customers feel when they want to buy something from us. Sometimes these issues are actually difficult to fix though. Often a retailer finds themselves with limited power over their online store because they donāt have access to their website backend or because theyād need a tech person every time something needs fixing.
That can be hard. The only thing we can do then is make sure our team responds quickly and professionally to help customers along and try and keep them from getting lost or discouraged by tech.
Quick Fix #1: Simplifying the Checkout Process
Itās easy to think that making a checkout process more āsecureā means adding extra steps. More āreassuranceā, more tiny windows for confirmations and pop ups for privacy. But, the truth is, checkout processes need to be as streamlined as possible while still ensuring customers are comfortable and confident in what theyāre doing.
Too many steps can easily feel like a customer is being asked to run the gauntlet - painful for them, and a revenue leak for the business. The one-click order seems like itās only feasible for businesses operating at Amazonās scale but itās not impossible. The actual challenge lies in figuring out how to make that āone click orderā a reality. And thatās where most businesses get stuck in my experience.
The best way to get out of this rut is by simplifying the checkout process on platforms like Shopify or Magento. These tools are robust and offer hundreds of features and functionalities that can make it quite tempting to create endless shopping experiences. But the checkout experience should almost always be very restrained with as few details being requested as possible.
This doesnāt mean generic forms but rather pulling as much info as possible from existing data (maybe through autofill) or providing quick options for future orders, like setting up an account. It sounds idealistic and possibly even unrealistic but focusing on a seamless experience for those checking out with returning customers can actually mean only having to optimise a single page form which is far more achievable than trying to do everything at once.
Quick Fix #2: Enhancing Payment Options
Payment is less about 'money' and more about 'value', and in 2024, itās not enough to let folks enter their card details at checkout. People want easy payments. I know people often get stuck between the idea of payments as something to be hidden away on a secure server and the right balance of privacy and security alongside convenience, seamlessness, and flexibility.
Sort of. Payment gateways are just that - a gateway to unlocking revenue from every individual who visits your store. Sort of. If you have a physical store, you know this too: not having change or only accepting cards isnāt appreciated by everybody.
The same goes for your online store; if it doesn't seem like you care about accommodating people's preferred methods of payment, they're not likely to make the purchase. I've heard business owners worry that giving people too many choices will dilute sales from specific payment sources or complicate their records but here's what I think: maintaining clarity in your records is on you, not your customers. A potential customer is seemingly judging your website by how easy it makes buying what they want possible, nothing else.
Payment isnāt a virtue even though money can be seen as one; itās simply the seamless closing of an exchange, smooth as can be. Now before you go about linking every major payment gateway there is, take some time to consider how people do business around you or in your industry. Weigh up the pros and cons of using each one in terms of merchant fees or taxes or timelines to receive funds. Prioritise based on what's most convenient for people - this needs some ongoing research because whatās 'in' changes quickly but can often last a while longer as an option amongst others.
A lot has changed in payments since COVID-19 shifted us all off cash and more towards buy-now-pay-later formats with almost zero interest for consumers. This means funding purchases are now easier than ever, which means getting paid through more avenues also gets easier when done right. And that's basically what matters at the end of this: make everything related to paying easier for consumers first; you'll find yourself getting paid faster and seeing fewer abandoned carts than before.
Quick Fix #3: Optimizing Mobile Checkout
The one thing most people get wrong is assuming desktop-first. Seems like they forget just how popular mobile devices are, and that most of the internet now works with mobile device usage in mind. If your checkout process feels difficult on mobile, customers will take their business somewhere else - itās so easy for them to switch to another browser tab.
It seems like but the reality is that there are a lot of things you can do to fix this problem. Streamlining your checkout process for mobile device usage is the answer. This means adjusting your checkout form fields so theyāre easy to input using a thumb or stylus, as well as ensuring your buttons and CTAs are large enough to tap on small screens. Optimising for autofill is also essential - this makes it easier for customers to fill out their details without needing to enter every field separately.
Itās also important to compress images on your checkout page so that they load faster on mobile devices. This reduces loading time and helps keep things running smoothly. Plus, make sure you have a progress bar that lets customers know how far along they are in the checkout process.
It really helps with reducing abandoned carts, and it also gives people a sense of accomplishment when they reach the end. Thereās no question about whether mobile should be prioritised over desktop these days. But hereās where it gets a little tricky: there are so many different types of devices out there that some of this work might not be as simple as it sounds. Still, anything is better than nothing when it comes to improving your checkout experience on different devices, and thereās no point in waiting for the āperfectā solution before taking action.
Quick Fix #4: Implementing Abandoned Cart Recovery Strategies
I've noticed that people tend to think it's all about relentless reminders. Like, if you keep shouting at someone from behind the till, they'll magically walk back up and buy something. Seems Like it doesn't work that way. Abandoned carts are a tad bit more complicated than you'd like them to be.
There can be myriad reasons why someone left their cart behind and is probably choosing not to return, and repeated emails reminding them of their unfinished purchases won't always do the trick. The reality is, those classic 'abandoned cart' emails don't always get opened. And who can blame them. I think everyone's inbox is teeming with emails of all kinds, and emails from brands that they've only fleetingly engaged with are easy to ignore or delete.
And yes, there may be the odd few that click through to finish the process but that's not usually the case. More or less. So what can you do about this.
Like I said, it's a little complicated. It seems like the key thing to note here is that sending out a one-size-fits-all abandoned cart email doesn't suffice anymore. Neither does sending out 3 such reminders at various intervals within a week or so.
Instead, you've got to actively engage with your customers (even those that aren't committed enough to your brand yet). Sometimes all it takes is a little human touch - maybe getting them on a call or shooting them an email asking if there's anything that's keeping them from checking out; any questions they have about the products; any financial or logistical concerns they're hoping for clarity on before they buy something; or even just ensuring your live chat and phone support channels are highly visible and accessible throughout the checkout process. And if you're hoping for ways to incentivise purchases - discounts and coupons do still work. You could automate coupons for repeat customers or offer discounts during certain times of the year.
Some brands also use web push notifications as well as SMS reminders in place of emails, but these could become intrusive if they're not spaced out well enough.