Whether they are selling clothes or computers, retailers need to convince customers to buy their products. “The challenge is there is no single approach that works for every customer or brand,” says Kim Saxton, clinical associate professor of marketing at the Indiana University Kelley School of Business. “You have to know your customer base and what motivates them.”
Fortunately for businesses, the internet is making that simple. “Online, it’s really easy to know who [customers] are,” says Michael Osborne, CEO of behavioral marketing platform SmarterHQ. His company is among the tech firms that are perfecting how to predict when a customer will close a sale and when he will walk away. From how long a customer looks at a particular product to when he or she abandons a shopping cart, the data is analyzed to help online retailers create a shopping experience that leads more people to click the buy button.
Thanks to those insights and other data gleaned by businesses, online stores are using the following strategies to boost sales from both new and returning customers.
The persistent shopping cart. There are plenty of factors within the online shopping experience that weigh heavily in favor of retailers. “One of the major benefits of e-commerce is that it helps online retailers in their ability to increase a customer’s basket size,” says Evan Tarver, investments analyst with FitSmallBusiness.com.
Not only can customers store a virtually unlimited number of items in their cart, those items will often be waiting for them if they leave the site and come back later. Known as a persistent shopping cart, it makes it simple for customers to complete a sale they may have otherwise forgotten.
[Read: 6 Potential Downsides of Online Shopping.]
Discounts for subscriptions. Auto-ship programs have become a staple on many sites. Consumers sign up for shipments at regular intervals, often in exchange for a small discount. “That becomes a pretty predictable source of revenue,” Osborne says. “That’s why they’re willing to [offer a discount].”
Automatic additions to carts. Consumers on some sites may get more than they bargained for when adding items to their cart. That’s because some stores will automatically add multiple items or include add-on purchases automatically.
Tarver says he sees this tactic most frequently deployed with supplements and similar health products. “Some retailers will give you a year’s supply, claiming that their program is most effective if done for a year,” he says. Customers who want a smaller quantity have to manually remove items from their shopping cart before checking out.
Targeted campaigns. With so much customer data available to retailers, online businesses can easily tailor their marketing to an individual’s preferences. “If you’re not personalizing, you’re doing it wrong,” Osborne says. That means emails should speak directly to a customer’s interests and a website should be designed to quickly bring a visitor to relevant items.
Osborne says people expect this level of customization nowadays. Sending generic email blasts to an entire mailing list are not only ineffective, but can also alienate potential customers.
Reminder emails. One way retailers customize emails is to send reminders about items left behind in a cart. Other emails could let customers know whether a price has dropped or if a sale is about to end.
Reminder emails can also boost sales by making it easy for people to make purchase decisions. “One e-tailer sent me a list of Christmas purchases last year and asked me which ones I wanted to repeat,” Saxton says. That makes for an easy shopping experience that can garner sales from time-strapped customers.
[Read: These Tools Let You Shop Online Without a Credit or Debit Card.]
Easy checkout. By all accounts, Amazon revolutionized online commerce with its 1-click shopping model. Every step of the purchase process, from reviewing the cart to entering payment details, provides an opportunity for a customer to decide not to buy. However, the one-click method creates a frictionless transaction in which customers bypass all those additional steps.
The patent for Amazon’s 1-click payment system expires this year, meaning other retailers may soon begin adopting similar systems. In the meantime, they have used a variety of methods, such as storing payment info and auto-populating shipping fields, to make the checkout process easier and customers less likely to leave without completing the sale.
Suggested add-ons. “Another [thing] we see a lot is the ‘complete the look’ or ‘accessorize the purchase’ type of promotion,” Osborne says. It’s a particularly useful tactic for apparel sales when someone might naturally be looking for other clothes, shoes or accessories to complement their new purchase. However, it can also be used for all types of products.
Promotional thresholds. A promotional threshold encourages people to spend a certain amount in order to get free shipping, a discount or other bonus with their purchase. To maximize their effectiveness, retailers will place banners on their website and reminders during checkout to let customers know if they spend only a little more, they’ll be eligible for the promotion.
Companies like SmartHQ analyze data to determine how likely a customer is to become a repeat buyer. If someone is identified as a potentially high-value customer, the system may automatically lower the promotional threshold for that person, Osborne says.
[Read: 5 Tools to Turbocharge Your Online Shopping.]
Loyalty programs. These have long been used as a marketing tactic in offline businesses, and they are just as popular online. With online tracking, loyalty programs can be personalized with targeted rewards and promotions. “Everyone likes something that makes them feel special,” Saxton says.
That makes loyalty programs attractive to customers. Plus, they require people to sign up for an account, which makes it easier for businesses to collect shopping behavior data that can be used for further marketing.
Creating scarcity. Creating scarcity is another tried and true method of driving sales. In many cases, simply stating the number of items still in stock can drive people to make a purchase before they otherwise would. Sending out an email when an item comes back in stock can also have the same effect.
These marketing tactics have their benefits for customers. They can make online shopping a pleasant and convenient experience. However, make no mistake. Retailers aren’t implementing them for the customer’s benefit alone. Instead, they rely on these tactics to convince a customer to part with his or her money and part with it today.
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