How to create a thrilling e-commerce site that keeps customers coming back
February 6, 2017 09:21 AM
There’s a reason you get back in line after being whipped around by a rollercoaster: Excellent experiences bear repeating.
Fortunately for their customers, e-retailers hoping to outmaneuver Amazon are architecting increasingly exciting rides. Leading the way is Wayfair, an e-commerce home furnishings brand that Internet Retailer recently named North America’s best e-retail marketer. To drive brand loyalty, Wayfair invests heavily in its online customer experience (CX).
Behind the site’s CX updates are more than 200 merchandisers, designers, engineers, editors, and analysts who track users’ on-site behavior. Together, they revamped Wayfair’s product landing pages with buying guides from its editors, images from its photo studios, improved navigation from its engineers, and trend forecasting from its analysts. The result? Repeat customers placed 1.9 million orders in third quarter 2016, according to Wayfair’s most recent earnings report — a 51.6 percent year-over-year increase.
Wayfair isn’t the only company that’s found data to be the secret sauce of customer retention. At CellularOutfitter.com, for instance, we learned that women aged 35 to 50 are our likeliest repeat buyers. (CellularOutfitters is an online retailer of mobile phone accessories that has created a fashion-forward line called Mobovida.) Thanks to our curated, segment-specific marketing and merchandising strategy, women now represent a solid 70 percent of the company’s customers. Digging into this demographic’s purchasing patterns helped us double our repeat purchase rates in just two quarters.
In online retail, we don’t sell products. We sell benefits. We sell thrill rides.
Why People Leave the Park
Not every customer loves every product; that’s life. But there are plenty of reasons beyond the product that cause customers to quit:
When a snow cone stand has a 30-minute wait, customers won’t sit around. They’ll go elsewhere and settle for a soda, even if it’s the snow cone they truly wanted.
That’s true for e-commerce, too. Even if someone wants your product, she’s not going to wait when 50 other sites sell something similar. In fact, Kissmetrics found that 40 percent of shoppers abandon websites that take more than 3 seconds to load. How does that shake out in dollar terms? For an e-commerce site clearing $100,000 in daily sales, a one-second delay translates to $2.5 million in lost annual revenue.
Once you’ve scoured your site’s code, ease traffic jams with scalable server infrastructure, load balancing, and a content delivery network. Before Rihanna tweeted out an endorsement for online sock seller Stance to more than 60 million followers, it turned to Redis Cloud. Even when server requests topped 1,000 per second following Rihanna’s pitch, Stance kept latency below 0.07 milliseconds. Rising tides lift all boats, so optimize site performance to improve the visitor’s experience at all stages of the funnel.
No matter how amazing the ride, nobody will come back if the person running it is a jerk. The loop-de-loop of your corporate culture needs to be customer service.
Frankly, this can be a tough problem to fix. A Zappos-like “Wow the customer” philosophy must permeate throughout the organization. Everything matters, from tone to brand transparency to communication frequency. Post-purchase communications are an often ignored part of the equation. When customers finish the ride, does the operator rush them off with a grimace, or does she promptly and cheerfully ask about how the experience could be improved?
To fend off frustration, park patrons need an easy-to-follow map. If it sends them in circles rather than routing them to the next ride, they’ll eventually quit following it altogether.
Each customer’s journey is unique, and your goal should be to offer the right product to the right customer at the right time. So if you’re to achieve one-to-one marketing, easing friction from start to cart is key. Attack funnel bottlenecks that affect the largest number of your customers first. Then make iterative, targeted improvements using personalization platforms like Certona or Rich Relevance to optimize the merchandising experience.
If you’ve ever done one of those bungee jumps, you know that they’re a blast. They’re also expensive and vomit-inducing if ridden repeatedly.
A lovable product isn’t always enough to keep customers coming back. Some products simply aren’t conducive to repeat purchases. But it’s not necessarily the end of the line. Be agile and creative with product offerings. Casper, an online mattress retailer, faced initial investor skepticism: While customers love its product, people don’t buy beds more than once per decade. It overcame their lifetime value objections by offering sibling products like quality bedding, dog beds, and accessories to encourage repeat business.
The Art of the Bringing Shoppers Back
So how, given all the reasons customers leave, can you make sure they jump back in line?
1. Know the favorite rides.
At amusement parks, certain attractions always have a wait. So what do parks do? They listen when customers want more bumper cars, faster coasters, or more burger stands.
Great e-retailers, in a similar fashion, let customer data light the way. According to McKinsey, if you focus on maximizing customer satisfaction across the customer’s journey, you can increase revenue by up to 15 percent.
A smart place to start is your net promoter score (NPS). To learn your NPS, ask customers to answer on a 0 to 10 scale, “How likely are you to recommend this product or service to others?” Promoters—those who respond with a 9 or 10—are your loyal advocates and repeat buyers. Scores of 8 or below indicate detractors, whose insights should guide product and experience improvements. Online product reviews are the second-richest vein of CX feedback. Keep a lookout for them, and be sure to respond to feedback.
2. Know the riders.
Who is actually riding the popular rides? Is the Batman coaster full of 50-year-old men reliving their youth? Teenagers looking for a quick thrill?
To know why people buy your products, you first need to understand who buys them. Start by analyzing visitor composition from various traffic sources. Periodically run your customer email list—your house file—against a third-party data provider like Experian. Then, segment customers by demographic profiles, and construct marketing and merchandising initiatives around those cohorts.
3. Talk to the crowd.
As useful as they are, ride numbers and rider demographics aren’t everything. They can tell park owners which rides are popular with whom, but not why they’re popular.
Again, the best source of customer service insights is—surprise!—the customer. Tools like Qualaroo can survey customers and compiled qualitative data on customers’ experiences. The key to this is asking the right questions. Is your return policy too strict? Did customers search for coupons before buying? Be specific and consistent.
People wait hours to ride a great rollercoaster. They’re willing to sacrifice other available experiences to take another turn at a singularly great one.
Internet retail works the same way. There are a million rides out there, but when you’ve got the best thrill in the park, your buyers won’t wait to come back.
Besides being the founder and chairman of Mobovida, a vertically integrated online retailer and direct-to-consumer mobile accessory brand, Gene Ku is also a venture partner at K5 Ventures in Orange County, Calif., and serves as mentor and advisor to various startups.