It is our job as product managers to find out why our customers “buy”. Buying is a very emotional behavior especially when it comes to consumers. When selling B2B products, the purchase cycle typically follows a chain of events – RFP to demos to pilots to implementation to release to production. But what about consumers? How do they make buying decisions?
It is very important that you delve deeper into the customer’s lives to see what influences them. For example, on eCommerce websites, shopping cart or checkout abandonment is quite common. This is one of the metrics eCommerce retailers keep a close eye on (or should keep an eye on). Why? Consider the chain of events that happens before the customer abandons the shopping cart.
- Customer comes to your site instead of going to one of your competitor’s sites. Awesome, they know that you exist and they have selected you!
- They find the items they want to buy. Awesome, you have exactly what they want.
- They like the price and add the items to their shopping cart. Hurrah, it is wallet time!
- They start the checkout process (I see them pulling their wallets out)
Then whoosh! all of a sudden they abandon you. You almost had their money, but in a flash they were gone. Given that it is a website, you don’t know who they were or how to contact them to understand why. All you know is that you just lost a sale.
So what can you do to improve your situation when faced with this? I propose that you pay close attention to “friction points” that cause the customer from not buying from you.
There are many eCommerce “friction points” that have been well documented, but you still see so many sites that make these mistakes.
1) Form fatigue – every field on the form that you are asking the customer to fill out is a friction point. Especially, if you are asking for information such as fax number, address (especially if I am signing up for an email service), annual income (yes, I am so inclined to reveal this to a complete stranger) and the list could go on. Your marketing department will likely have justifications as to why each of these fields are needed, but you as a product manager must think from your customer’s perspective. Yes, marketing is important, but you have to find the right balance between your needs and the customer’s needs. After all, your marketing department is not the one paying you money to keep you in business.
2) Required registration – If users don’t understand why it is needed and the value registration would provide them, they will flee in droves. I have seen this in person during focus groups and usability testing. Common reaction: “S***w this, I am out of here”
3) Surprises – Don’t surprise them! Imagine that you as a customer gets to the end of the checkout process and the retailer springs a $15 shipping fee on you. How will you feel? Would’nt you abandon if you think the shipping fees is a rip-off?
However, there are a lot more friction points that certain verticals take advantage of or there are others that if solved can increase conversions. The classic example I always use is “mailing” – the old fashioned way where you have to deal with envelopes/boxes, stamps, post office
Let us first look at the example where the company is hoping and praying that you will not mail anything. The commonly used marketing gimmick of “Mail-in rebates”. Retailers offer discounts on products via mail-in rebates. The price after mail-in rebate looks very attractive while you are in the store or when shopping online. But these companies make you buy at the full amount and want you to send mail-in a flimsy card to get the rebate. They are banking on the fact that most customers will not mail it in because of the “friction points” involved in filling out the long form, attaching all the required documentation and making sure they mail it within the specified time period. And they are pretty successful at it because research shows that 90%+ of customers don’t.
Now let us take another example, where it is paramount to the company that customers mail things in for it to be successful. I currently work at Gazelle.com where our customers trade-in their used electronics such as laptops, iPhones, Blackberries, cameras, camera lenses, gaming consoles, movies, video games etc. for cash. We sell the gadgets we buy via eBay, wholesale channels or recycle them responsibly all here in the United States. The process involves the following steps:
1) You tell us about the model and the condition your gadget is in by answering a few questions on gazelle.com.
2) We tell you right away what we will pay you if the gadget passes our inspection and matches the condition you told us in.
3) You mail us the gadget, we pay for shipping.
4) We pay you via the payment method you selected (check, Paypal, Amazon gift card etc.) after we complete the inspection within 10 business days.
We are experiencing explosive growth, but one of the “friction points” we always think of, is the act of our customers having to ship their gadgets to us. It does not matter if a million customers come to our website and tell us that they have a million items to sell us. Unless they actually put it in a box and mail it to us, it does not matter.
So here are ways we work hard to reduce this “friction point” of shipping:
1) We always pay for shipping – we email you a pdf that has the packing slip and pre-paid shipping label.
2) For many categories, we even send you a box free of charge so that you can use it for shipping.
3) We keep you informed throughout the process once we receive your gadgets.
4) We pay you as soon as we complete the inspection. In fact, if our inspection shows your gadget to be a better condition than you had told us, we pay you the higher trade-in value, no questions asked. In the event we find the gadget is in a worse condition than you had stated, we send you a revised offer and explain the reason for the reduced offer.
5) We give you the choice of accepting this revised offer so that we can send you the payment or if you decline and want your gadget back, we ship it back to you free of charge.
Now if you happen to live or work near our office, you can even walk in with your trade (forget about boxes and shipping labels) and we will pay you on the spot.
Now these are the things we do today. Are we done yet, hell no!. We are always looking for new ways to further improve our processes such that we can eliminate the “shipping” friction point.
We continue working on finding economical ways to reduce these “friction points” so that we can stay in business and work on our vision to “change the way consumers consume.” When we still have a vast majority of electronic gadgets ending up in landfills and polluting the environment, we at Gazelle know that we still have a lot of work to do.
As product managers, it is important for us to realize that unless we reduce our customer’s friction points of doing business with us, we are not going to be successful. And the friction points may not always be related to the product, but it maybe within the ecosystem of your product – whether it is customer support, documentation, order management, sales support etc.
Thoughts? What are your customer’s friction points and what are you doing to solve them?
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Image: Courtesy of carfullofpandas.com