You’re taking a road trip and spot a fruit and vegetable stand by the side of the road. Excited by the array of silver corn and bushels of ripe peaches, you fill your basket. Unfortunately, the stand only takes cash and all you have is a credit card, so you reluctantly leave your produce behind.
The next weekend you go grocery shopping and when you’re ready to check out, only one cashier is available. The line is stretching halfway into the aisle. And the people ahead of you look like they’re stocking up for the month.
What do you do? You don’t want to wait in line while your ice cream melts. Luckily, you have another option. You can use cash, a credit card, or debit card to pay for your groceries in the self-serve checkout line. In no time, you’re out the door.
Because you have multiple payment options at the grocery store, you don’t need to abandon your cart like you had to abandon your basket at the fruit stand.
In this customer-centric marketing climate, the customer’s wish should be your command. Customers move toward a purchase expecting to be able to use a variety of payment options like debit cards, credit cards, PayPal, Google Checkout, and Amazon Payments. Even Facebook is making a push to empower users to exchange money via Messenger, increasing the amount of debit and credit cards they manage as a result.
Providing a range of payment options needs to be part of your strategy for satisfying and retaining customers. More than ever, customers expect to be able to pay in whatever platform they are currently using.
But Where Did You Go?
Data from the Baymard Institute indicates that the average online cart abandonment rate is 68.63%. Despite a company’s devotion to ushering potential customers through their buyer’s journey, more than two-thirds of those individuals will not cross the finish line.
With the majority of potential customers abandoning carts, your profits are taking a hit. Business Insider calculates that cart abandonment amounts to a $4 trillion loss in sales of merchandise. Not only are companies missing out on current sales, but they are also losing future sales that would be possible if they gained and maintained a long-term relationship with the customer.
Keep Checkout Simple
When customers are abandoning carts at the checkout, it’s not a matter of not wanting the merchandise. They get stopped in their tracks because they are displeased or disgruntled with the purchasing process itself. If the checkout process takes more than a few steps, customers may become impatient before completing their purchase.
The easier the checkout process is, the more likely you are to get a sale. Offering payment options adds to the ease of purchase.
Customers have preferences for how they like to pay—and they also want an easy experience. They don’t want to have to go through the process of creating a new payment account to make a purchase. If they typically use a credit card, they probably won’t want to sign up for a PayPal account during checkout. On the other hand, if they use PayPal, they won’t want to go through the process of filling out their credit card information.
As in the grocery store example, customers want another option to fall back on if the one they prefer isn’t available. If an online customer runs out of acceptable payment options, they won’t hesitate to abandon their items—especially if the purchase was an impulse buy.
Your Money is Always Good Here
According to the 2016 IBM Payments Merchant Study, 89% of respondents find the ability to accept more types of payment helpful, especially as online sales outpace in-store sales. Companies that add payment options see significant upticks in sales percentages. Shopify reported that FreshGigs, an eCommerce store, was able to increase checkout completion by 15% just by accepting American Express cards.
The more options a company offers its customers, the better. A study by CyberSource Corp discovered that websites offering 4 or more payment options in addition to credit cards obtained a 12% higher conversion rate than those offering only one additional option. Increasing payment options boosts conversion rates.
Choose All of the Above
Like all touchpoints in the customer journey, checkout is a source of information that can be analyzed to get a better view of the customer. This is true whether the customer decides to purchase or not. To boost conversion rates by the double digits, a business needs to analyze churn.
By better understanding why their customers abandon carts, companies can uncover their customer’s payment preferences to provide the right options for a higher conversion rate.
Satisfy your customers by learning how they prefer to pay. Schedule an Analytics Health Check with Pluris.