As eCommerce merchants, you spend thousands of dollars to get people to your website. You spend a great deal of time trying to attract and convert new and recurring shoppers – it’s exhausting, but so worth it! The more shoppers that come into your website, the more products you sell! There’s a clear ROI.
Now, let’s say you’ve spent all that time and energy and your attraction engine is dialed in. Your business is humming right along and shoppers are pouring into your site every day, from places you never dreamed you would service, ready to make a purchase. In an ideal world, no one would abandon their cart, all checkout pages would be frictionless, and every attempted transaction would get approved. Can you imagine how much that would boost your bottom line? Unfortunately, this ideal scenario is not yet a reality. There is a conversion problem that often gets ignored.
The Conversion Problem
Your payments page seems to be working just fine, and there are a few transactions getting declined here and there, is this really a problem? If you aren’t sure, just start tracking eCommerce conversion rates (i.e. how often a transaction is attempted versus how often it is successful) for different regions and price points. Most merchants will see some startling patterns emerging. Optimizing payments can get you up to 40% higher conversions. If you are going to optimize your website for more traffic, why wouldn’t you optimize your payments for higher eCommerce conversion rates? Don’t end up like Netflix, who recently ran into a $7 billion conversion problem, you’re better than that!
The conversion problem is categorized into two parts: Checkout Friction and Payment Processing Declines.
What causes Checkout Friction?
Checkout Friction is the first part of the conversion problem. Shoppers have clearly intended to buy the items in their shopping cart, they land on your checkout page and… nothing happens. There are several reasons why they never completed a purchase, and you should keep a watchful eye out for them as you design your checkout page to reduce friction.
- Too many steps/fields – do they really need to enter their address 4 times to make a purchase?
- Local language and currency aren’t displayed – if they can’t read your page, adios!
- No coupons – many shoppers won’t buy without them
- Limited payment choices, i.e. wallets or alternative payment types aren’t available
The list goes on, but these are the big ones. To learn more about how to reduce friction in your checkout page, get the 7 Ways to Increase Sales Conversions tip sheet.
Why do Payments Fail?
The second part of the conversion problem occurs during the payment processing – this is the more invisible part of the conversion problem. In order to address these issues, let’s take a closer look at why payments fail in the first place.
Legitimate payment fails:
- Card Information Changes (in the event of a customer getting a new credit card, etc.)
- Expired card
- Reached the credit limit/or no funds are available
- Delinquent account on hold until payments are made
- Card was reported lost or stolen which deactivated the account
False-positive payment fails:
- Cross-border/international transactions
- Limits on the maximum sum of a single transaction
- Fraud alert triggered a hold on the account
This list of payment fails represent a whopping 30% potential for higher eCommerce conversion rates. These payment processing fails combined a frictionless checkout can maximize your eCommerce conversion rates by up to 40%!
This can seem like a daunting list of things to do, but know you are not alone. Our conversions consultants are standing by to help you get on the path to higher conversions: