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Strategic insights
Are You Solving Problems ... Or Just Moving Them?

Written by on November 12, 2013

One thing that worries me is that the internet is overflowing with advice that lack reflection and perspective. We see it all the time. Somebody sees a study that narrows in on a single issue (which in itself is bad), and then quickly write an article about how to fix just that.

The problem is not that these articles are necessarily bad. It's more that without perspective we don't know if the advice is actually helpful.

Let me give you one simple example:

Last week, Chris Lake over at eConsultancy wrote: "Why is checkout abandonment still linked to nasty delivery surprises?"

The article is based on a study that found: "77% of online shoppers have abandoned their shopping cart in the past year, with 53% citing unacceptably high delivery costs as the main reason for bailing out."

OMG!

That's a lot of people who end up first deciding what product they want to buy, but then leave when they realize how much it will cost to ship it.

This is indeed a problem, so Chris tries to fix it by nailing down on just that. He recommends that to fix this you should "avoid sending people into the checkout area too early. Before they enter, they should have all of the key facts. That means delivery information, among other things."

It makes sense, right?

If people abandon their shopping carts because they are surprised by the real cost of shipping, inform them of the shipping cost *before* they add it to the cart. This way the people who do add products to their shopping cart won't be surprised and your shopping cart abandonment rate will drop dramatically.

As Chris writes: "I'll wager that your abandonment rates will fall."

Of course it will ... but will it also result in more sale? Or will it actually cause a drop in overall sale because people would just leave your site earlier?

See the problem here? Which one is best?

Is it better to give people the full costs upfront so that once they reach the shopping cart there is nothing preventing them from completing the transaction?

With this approach, you only have one decision point, and as a shopper you are never negatively surprised. From a logical perspective this sound like the right thing to do, but you also have to realize that by giving people all the information upfront, far fewer people will add the product to the shopping cart to begin with.

Or is it better to 'hide' the shipping cost until people have already made the decision of what they wanted to buy? This way, you do risk surprising people negatively.

Logically, this seems like the wrong thing to do. It forces people to decide twice, and you cause a potential negative reaction. But then you realize that people don't act logically when it comes to shopping.

Think about how upsell works. We know, as a fact, that it's far easier to convince people to buy 'just one more thing' *after* they have already decided to buy something to begin with. In other words, the first decision is really hard, but the second is much simpler.

This is what upselling is all about. When you buy an iPad and go the checkout page, Apple asks you: Do you want an iPad magnetic cover+stand with that too for just $39?

And many say "Yes, I do".

Upselling is a completely illogical behavior, but it works!

Does the upselling behavior also work for shipping costs? I honestly don't know, but if it does, then it would be far better to wait to tell people about the shipping costs until they have already decided what products to buy.

You want the first decision to be as easy as possible, because it helps ease all other decisions afterwards.

I don't know which one of these two models is the best one. My 'gut' tells me that there is no single answer. I think it hugely depends on the type of brand you are, the price of your products, and the cost of shipping.

If you, for instance, sell a 'writer' cap for $9.95, but then on the checkout page tell people that the shipping costs is going to be $66,30, it's pretty much game over. This is not going to work regardless of how you design your site.

And that's probably the real issue here. Just moving when you tell people about your shipping costs isn't going to solve your problems. The problem is not really where the shipping cost is, it's that it's there to begin with.

People hate shipping costs.

So if you can't get completely rid of the shipping costs (i.e. free shipping). What you probably should do is to see if you can find a combination in which you can upsell people a second product in exchange for free shipping.

For instance, if you have calculated that above e.g. $120 you can afford to do free shipping (without seriously jeopardizing your margins), and people only add a product for $95, the solution is simple.

You tell them that if they just add this great product costing only $29, you will give them *free shipping*.

Then you have the power of upsell of a relatively cheap product (which we know is very effective and an easy decision), with the encouragement of *free shipping*.

Wow !!

Never focus on solving problems based on single metrics. Ever! Always consider the bigger picture and the overall path to sale.

The dilemma (and why I feel like screaming when I read articles focusing on single metrics), is that we have no idea if they are good or bad. Chris' article, for instance, contains many good points, but he is not eliminating the problem, he is merely moving it.

He might be right in his assumption that moving it is better. But we have no way of knowing that. It's a known-unknown.

It's the same with social and engagement. It's also a known-unknown. More engagement might lead to more sale... and it might not. So, just focusing on increasing the rate of sharing is a terrible thing to do.

Optimize your paths, or more so, optimize your customer patterns. Don't just optimize your metrics.

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Thomas Baekdal

Thomas Baekdal

Founder of Baekdal, author, writer, strategic consultant, and new media advocate.

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