Are you reaching the 'buy later' crowd?
There’s an age-old adage in sales: Don’t let the customer leave the showroom floor without buying a car. The wisdom is obvious enough: It takes quite a bit of effort to get someone in the door of your store in the first place, and the prospect’s very presence there is an indicator of readiness to buy. If you let the prospect leave without making a purchase, the chances of getting him or her back again diminish dramatically.
That logic prevails in the digital world as well. Whether you’re selling content, products, or both, the plethora of “Buy Now!” buttons and pop-ups have become all too familiar – and increasingly ignored. Research shows that such inducements have lost much of their effectiveness, with click-through rates having plummeted from a healthy 2-5% earlier in the decade to a disheartening 0.2-0.3% more recently.
In response, online marketers have discovered a vast underserved market: people who don’t buy now, but who do buy later. This is actually plain common sense. For decades, in-store merchandisers have measured the buying (and non-buying) patterns of shoppers. They have long understood that up to 70% of shoppers who come into a store to purchase a specific item will leave the store without having made that purchase. The reasons for such “cart abandonment” include price sensitivity, lack of good information about the product, and inconvenience (e.g., the checkout line is too long).
Pay me now, or pay me later
The well-kept secret in the in-store world is that of those shoppers who did not make the purchase, 67% of them actually buy the product later – either at a different store, at the same store, or online.
In the online world, the case is even more acute. Forrester found that the conversion rate for visits to an e-commerce site from a desktop or laptop computer is just 3%.
The logic is inescapable: Most people are not ready to buy when they see a “Buy Now” offer, and even those who do click through to an online retailer only convert at a low rate. The simple fact is: most people buy later. Shopping is a process. People become aware of a product, then become interested in it, then desire to have the product, and only later make the purchase.
Online marketers in recent years have woken up to this underserved market with a variety of tactics.
- Remarketing lets a brand or store reach people who have previously visited their site and show them relevant ads when they visit other sites. It is not uncommon to hear consumers remark (and sometimes complain) about the spookiness of ads that follow a person around the web, and most ad networks have responded by explaining to users how and why a particular ad has appeared again, and also giving users the chance to opt out. Such complaints aside, remarketing has proven highly effective, and practitioners commonly speak of getting back to those heady days of 2-3% CTR.
- Abandoned shopping cart marketing is even more targeted than remarketing. Many visitors to an e-commerce site get as far as putting an item in the shopping cart, and even providing an email address, only to abandon the site without making a purchase. So close, yet so far. But, there’s still a way to reach those almost-customers with a follow-up email that includes a simple reminder, survey question or special offer. Studies have shown that such remarketing can help increase return visits to the site by as much as 26%.
- Social marketing has become a staple of advertising among many brands. Campaigns will often include a call-to-action to “Like” the brand on Facebook or some other social network. Such a declaration provides the brand with future opportunities for targeted advertising within that social network, making sure its new ads reach an audience that has already indicated a willingness to consider.
- Deferred purchase services are for bloggers and review sites. While these sites cannot participate in remarketing since they don’t have their own “products” to market, they are often the place where would-be consumers first become aware or interested or even desirous of a product. Few of their readers are ready to buy at the moment they first discover a particular product even exists. However, by including a deferred purchasing service on their sites, bloggers can capture readers’ interests and let them know later about price shifts, changes in availability, or offer a gentle reminder. Readers can indicate they’d like to be reminded about this product later and then continue to read the content on the blog/review site. Reminders and alerts sent out as part of a deferred purchase event later have enjoyed click-through rates of close to 20%. What’s more, deferred purchases tend to have a life well beyond the initial date, with interest in the product sustained for up to three months. The chart below shows the click-through rate on reminders sent in the months following an initial indication of interest.
While there is still wisdom in selling to the customer who has walked in your front door, today’s sophisticated (and jaded) online consumers are much more likely to respond positively to a well-crafted “remind me later” message that is directly related to a specific interest in a specific product or brand.
Michael Maggio is chief marketing officer at ShopAdvisor, a deferred shopping platform that connects consumers’ initial interest in a product with their eventual purchase.