A first-time buyer’s abandoned cart is the loss of something far more important than an initial purchase: lifetime value. Customer lifetime value is the long game of conversion optimization. If brands and advertisers consider this event, they can increase their overall revenue by more than 20% by personalizing onsite and offsite customer experiences.
To do this, they will have to analyze the long-term benefits take steps to recover abandoned carts, looking in-depth at the long-term value of otherwise lost shoppers and different ways to increase new customer acquisition.
Identify common causes of cart abandonment
Efforts to recover the carts begin with understanding why they were abandoned in the first place. In a 2021 US Buyer Survey, 49% of respondents said they abandoned their cart for reasons related to additional costs. These “extras” refer to shipping, taxes, or additional charges.
While these fees often can’t be avoided, there are ways for brands and advertisers to ease conversion friction. Identifying additional costs earlier in the funnel can mitigate cart abandonment later. Whether it’s flat-rate shipping or other charges, transparency gives shoppers a choice rather than a surprise when they checkout.
Although additional costs are the main reasons for abandonment, there are additional disincentives. Shoppers have also reported backing out of a purchase due to having to create an account, slow delivery, and a long or complicated checkout process. Brands that successfully identify which of these common hurdles apply to their business move forward with developing more informed conversion optimization strategies.
Implement comprehensive abandonment recovery strategies
The key to acquiring new customers is personalization, and it’s important to align strategies with the level of buyer intent. Knowing when to push for a purchase or collect a lead isn’t an exact science, but there are some field-tested exit recovery strategies that brands and advertisers can try.
At the top of the funnel, brands and advertisers can use first-time purchase incentives and repeat sales. First-time purchase incentives encourage new visitors to become customers by offering incentives, such as a gift with purchase, to entice visitors to move from browsing to buying. Sales repeats are reminders for shoppers around existing offers that deliver value without hurting the brand’s bottom line.
Some mid-funnel strategies consist of social proof and urgency. The first approach leverages the popularity of products a shopper is interested in by displaying the number of other users who view that item and have purchased that product(s). Motivating shoppers to continue their shopping session by reminding them of an offer’s time limit or limited product availability helps create a sense of urgency.
Moving down the funnel, cart retention and free shipping techniques tend to work well at this point. Giving users who have abandoned their cart the ability to save the contents of their cart adds a layer of convenience that will help brands bridge the gap during a cross-device purchase. Since many consumers abandon purchases due to shipping costs, eliminating this cost for shoppers who exited at the checkout stage may be the exact push they need to convert.
Practice strategies to understand the true value of buyers
Abandoned carts equal a significant loss of revenue. Once brands and advertisers understand the impact of abandoned carts on their business, they can start implementing optimizations that reduce abandonment and increase online revenue.
For example, fashion advertisers who implemented comprehensive conversion optimization strategies increased repeat purchase rate by 15%, increased repeat customers by 11%, and increased recurring revenue by nearly by 15%. On top of that, they increased overall revenue increase by 10.5% and campaign conversion rate by over 37%. These fashion advertisers took action to recover abandoned carts and reaped lasting benefits from these otherwise lost customers.
Online beauty brands have the daunting task of converting shoppers who can’t touch or test their products. Even with this challenge, by implementing some of the conversion optimization strategies outlined above, beauty brands have achieved impressive lifetime value metrics, such as an increase in repeat purchase rate of nearly 28%, an increase in repeat customer growth of nearly 14%, and an increase in recurring revenue of 16%. %. They also saw a 10.4% increase in overall revenue increase and a 31.4% increase in campaign conversion rate.
Whatever the industry, there is a way to optimize conversion and reduce cart abandonment. It’s simply about identifying strategies that fill the gaps in each brand’s customer experience.
By identifying common causes of cart abandonment and those that apply to a brand, then implementing full-funnel abandonment recovery strategies to overcome these obstacles, brands successfully optimize conversion and reduce shopping cart abandonment. Brands and advertisers who regularly incorporate these strategies into their conversion campaigns will likely see lasting benefits in increased customer lifetime value.
Sponsored by: UpSellit