What exactly is the OPTIMAL Checkout experience in a device agnostic world?
How can you reduce checkout friction and drive up average order value on not just desktop computers but also tablets and mobile devices?
My guest on today’s show Rick Wilson, is the President of Miva, an eCommerce SaaS platform with over 12,000 active stores.
He takes us through the optimal shopping cart process, shopping cart best practises and tactics as to how online retailers can drive up their average order value (AOV) at checkout and reduce friction.
Rick Wilson also talks about why MIVA eventually chose to become a Software as a Service (SaaS) company and what he thinks of the direct-to-consumer revolution and the progress of B2B ecommerce in the coming years.
01.39 Introduction of Rick Wilson and MIVA
06.05 The journey of ecommerce from the 90s through today
09.20 The mobile and direct-to-customer revolution
14.36 Social for ecommerce
17.56 MIVA’s decision to be a SaaS company
26.19 Shopping cart best practices
29.27 Payment wallets
33.11 Multi-step vs single page checkouts and guest checkout
37.44 Tips to increase average order value
40.16 Reducing and identifying friction points on checkout
47.22 Persistent baskets
The edges that I see today are a combination of great content marketers with unique products and a lot of expansion in the B2B space.
If your business model is people that aren’t actually going to use your product but paying you a monthly fee, you have a retention problem.
We wanted to build a company that we didn’t lose control over and that was profitable in its own right.
This was a great interview.
Get in touch with Rick Wilson on: firstname.lastname@example.org
Kunle: What exactly is the optimal checkout experience in a device agnostic world? How do you reduce checkout friction and drive up average order value, not just on desktop computers, but also tablets and mobile devices? My guest on today’s show hads up an ecommerce SaaS platform with over 12,000 active stores on his platform. He’s going to take us through the optimal shopping cart process, so stay tuned.
Hi 2Xers, welcome to the 2X ecommerce podcast show. I’m your host, Kunle Campbell and this is the podcast where I interview ecommerce entrepreneurs and online marketing experts who will help you uncover new ecommerce marketing tactics and strategies to help you, my fellow 2Xers and listeners double specific ecommerce metrics in your online stores. So if you’re looking to double metrics such as conversions, average order value, repeat customers, traffic, and ultimately sales, you are in the right place.
On today’s show, I have with me Rick Wilson. He is the president of MIVA, which is an ecommerce SaaS/Software as a Service platform founded in 1997. Yes, I know back in 1997 Software as a Service was not even mainstream or anything like that, but MIVA was initially a shopping cart and eventually migrated to the cloud in 2009, and according to internet trends and intelligence platform Built With, MIVA currently has about 20,000 ecommerce websites running on MIVA. Back to Rick. Rick has well over 15 years executive level experience in ecommerce who is part of the team that acquired MIVA from its parent company in 2009 and spearheaded MIVA into an SaaS platform. Welcome to the show, Rick. Could you take a minute or two to tell our listeners about yourself?
Rick Wilson: Absolutely, thank you so much for having me. My name is Rick Wilson, I’m president of MIVA and we’re based here in San Diego, California, which isn’t the normal spot for tech companies, but we’re close enough and it’s a gorgeous place so it keeps us out of the rat race a little bit. I came to work for the original MIVA, for the original founder of the original MIVA back in 1999, about 2 years after the company had started. The original founder of the company had had an early web hosting company and he’d started a scripting language, think PHP or even Rails in today’s world, and that language became sort of a cult hit and he wanted to sell the tool to use the language to other web hosting companies so he jettisoned the original hosting company and built a company around this language and the history had shown there’s not a lot of companies built just around languages, there has to be a thing that drives them. So in 1997, they wrote their first shopping cart application, and back then HTML was the scripting language and KoolKat, Kat was for catalogue, it was very 90s of them, was the first iteration of the shopping cart platform and it became also a cult hit so much so that by the end of ’97 the original founder knew that “we have something that actually has some legs here that we can build on, we’ve got to fix these name problems amongst other things”, so they invented the name MIVA out of thin air, a lot of people think it’s an acronym, it’s not, it is a slight tweak on the German pronunciation of the Egyptian hieroglyph of the word “cat”. Much more importantly, it was a four letter word that they were able to buy the domain for in 1998 and that was not trademarked. And so here was this great brand that was invented out of thin air and the name MIVA came from that. And then MIVA Merchant became the initial software product, and you are correct, SaaS didn’t exist back then. It was funny, we were really an early Software as a Service enabler, but what we did was we sold our software to web hosting companies, in today’s parlance that would be the Godaddy’s of the world, but back then there were thousands and thousands of them and we went and travelled all over the world selling to web hosting companies and they would turn around and include our web hosting package in their web hosting. You could almost see the writing on the wall that Software as a Service was coming, but you are correct, it hadn’t matured yet. That’s how the company sold its product from 1997 or 1998 through 2009. We sold the company in 2003 to what was a publicly traded pay-per-click marketing firm. They actually had a big presence over in London as well. They were originally known as FindWhat and then they bought a company in London called Espotting and they merged those with us and rebranded everything as MIVA. So MIVA, for a while, was both a marketing company and an ecommerce platform and that company sort of split everything back up and we reacquired the original MIVA assets including the name. So that’s it, very fast pace, how we got here.
Kunle: Quite detailed. I recall back in 2005, that was the first time I actually used WordPress, 2004/2005 and I was thinking about going into ecommerce at the time and the name MIVA, I recall, popped up and you’re right, I actually remember seeing additional services from MIVA, online marketing services being offered by MIVA, and it confused me a little bit at the time. It’s interesting, you’ve been around for a long time, Rick. Could you take us though how you think ecommerce has evolved from the 90s though the “.com” boom through to the area of Zappos and other ecommerce in early 2000 and now, today? What’s the transition been like in the journey of ecommerce?
Rick Wilson: There’s a couple of ways I can answer that. Before I do, let me get some guidance from you. There’s the Amazon version of ecommerce and there’s a few companies in the world including, obviously Zappos is part of Amazon, fighting it out for that space, so you have Amazon, Apple, Walmart and a few other players like Alibaba. Then there’s a lot of large brands like Nike and obviously ecommerce is going to be part of their standard retail strategy, and then there’s really the world of everyone else. To me, the evolution that’s been most interesting is that world of everyone else, so I hope that’s ok to talk about that.
Kunle: Fantastic. Most of our listeners are mid-tier etailers anyway.
Rick Wilson: Ok, perfect. When we started in the 90s, what you found was you had very technical people who had access to a product during edge, and some of that hasn’t changed that much. There’s always been some sort of an edge, be it in the 90s, first mover advantage. If you were the first person to sell bowling balls online, there’s a reasonable chance that you are still the biggest bowling ball seller there is. So the first thing that you saw in the world of ecommerce is the first mover advantage who was someone who had access to a product at a decent price or at a great price and they just got it out there and put it up, and if you were one of the first two or three and had a decent domain name, you could win your category at least for a period of time. That’s changed radically. Now, depending on the size of the category, Amazon obviously loves to get people selling on Amazon so they can see the sales data and they can decide if they want to compete with you or not. What we saw start to change was people really going for technical advantages for a while. I would put that period to sort of 2000 to 2009 where if you were an SEO master, if you could gain Google, you could really get an edge and as long as you had products at a decent price, you could get an edge and that was a leading strategy for really most of the 2000s. I think 2 things really happened to deflate that strategy. It’s not that SEO’s not important, SEO is very important. Two things. The mobile revolution which no one saw coming.
Kunle: They’d been predicting it since the 90s, but no one actually knew when it would come.
Rick Wilson: Absolutely, and they didn’t know what form it would take, they were predicting all these things. If you remember before the Iphone, there were all these things like the WAP protocol for low data web transfers and there were all these payment tools that were partnering with the cell phone carriers and they were trying to solve it from a different paradigm. And then Steve Jobs gets up one morning in January 2007 and changes the world and it even took a few years for that to see how that was going to change. It’s only in hindsight that you can clearly see what happened. I think the mobile revolution changed and the other change is Google. Google got ahead of their algorithm. Google started Panda and Penguin and the rest of the zoo and we’ve seen a lot of customers weather it really well, but we’ve seen a lot of customers whose only advantage was SEO and Panda and Penguin destroyed them, and they’ve had a hard time if not completely disastrous time trying to survive that. I think the thing you see today that has evolved is, and I think this is for the good, the edges that I see today are a combination of great content marketers with unique products and potentially a lot of expansion in the Business to Business space. Let me give you some broad example. One of our customer’s is a gentleman named Scott Jordan of ScotteVest, he has his own clothes, he was on Shark Tank, he’s a little bit famous from being so public and loud, at least here in the States, not super famous, but at the end of the day what he sells is clothes with pockets, lots and lots of pockets and they are hidden. So you can carry all your gear with you but you don’t look like you’re wearing a fanny pack, and it’s actually a great product. He’s got a $10 Million company and the thing is it’s his brand, he manufactures the clothes so at the end of the day, there’s really nothing Amazon, for example, can do. He can sell on Amazon all day long if he wants and there’s nothing that Amazon can do come after him. They have Zappos, so I guess Zappos could create its own line of similar products, but that’s a different thesis where someone who’s got their own product and their own brand and they have high or reasonably high margins, they don’t have to worry about winning by the penny.
Kunle: What I’m picking up from there is there’s a direct-to-consumer revolution. Manufacturers are using channels to sell directly and reach out to their customers but they need a unique story to tell initially and to spread the word about their brand. Does that allude to what you said?
Rick Wilson: I think that was a very succinct analysis of the story. And that’s exactly what I’m saying and we see that at a lot of levels. We see that at a few hundred dollar to a few thousand dollar merchant who’s very regional and local, maybe in a niche. Maybe they are in a specific type of jewellery or stand up paddle boarding is kind of in that space right now, especially here in San Diego because it’s a very beachy town so you see the stand-up paddle boarding stuff everywhere, I don’t know that that’s so popular in Oxford, but these niches are definitely going through that revolution and we see it all the way up to merchants doing up to $100 Million in sales in the B2B space where they are already established and they are trying manage “how do I manage my channel conflict?”, and I think there’s some fairly obvious answers that they can follow where there are people who just prefer to buy direct from the manufacturer because there’s a sense, especially if the company cultivates it, of better customer service, at least there’s someone to call if there’s a problem. So one thing that we recommend to people that are in that conflict where they have a channel and the channel essentially wants some protection online, what we normally tell people is don’t let someone else steal your online business, they’re not adding any value to it, you’re in control of your online brand. Generally what I would suggest is don’t go and undercut, you can’t sell it for less on your website than you would sell it to them wholesale. You shouldn’t actively try to crush them on price because what you really should be building on is exactly the thing you mentioned. A story, a persona, customer service, at least for stand-up paddle boards. If I manufacture my stand-up paddle boards and let’s say I get on Good Morning America and I’m doing lessons, maybe I’m famous on YouTube, if I’m doing those things I should be leveraging that so when people search for me and my brand, I don’t need to offer them huge discounts. Maybe I’m offering discounts on shipping or the standard conversion optimisation process, but I don’t need to get into a price war with my own channel.
Kunle: Absolutely. Where do you see social coming into this? You mentioned Google getting on top of its game and out-gaming people who try to game it in the first place, black hat SEOs, and the revolution of mobile. Does social come into play in web 3.0 so to speak from 2010 to date?
Rick Wilson: Not yet. Social is important and even some things we are doing in the marketing front and some new products and features that I have seen in the ecommerce space, we have a partner company called Social Rebate, they are a very small tech company with a few people up in Los Angeles, in the Silicon Beach area. They have a couple of products where you essentially earn a rebate when you complete checkout and they also have versions that try and let you have rebates before checkout so you can share and get credit and that’s not exclusive to them. They’re not the only one with that technology, but their technology is nicely set up, they have got a great network and what we’re seeing in cases like that, it’s just specific products going back to my direct-to-consumer from the manufacturer example ScotteVest. He hasn’t actually launched this yet but I’m convinced that he’ll do well. We have a customer DirectFix.com, if you break your smartphone screen they sell replacement screens, batteries and cables that kind of stuff. If I spend $40 on a screen, I don’t know what they cost, and I can get $4 back by posting on my Facebook wall, that becomes a win-win so you can get a virtuous circle. There’s a fine line because people can turn that stuff into spammy stuff and the noise gets filtered out. I think at the end of the day what’s going to make social work for commerce is genuine discussion about products. It’s hard to track that, it’s hard to get attribution. I’m sure we’ve all seen this, you go to your Facebook wall or to Twitter and someone says “Hey friends, I want Italian food tonight, where do you recommend?” and you’ll get a bunch of recommendations. That’s social commerce. Where the struggle has been so far is turning that from a passive or reactive activity to a proactive activity, but I think that’ll get cracked, it’s just not quite there yet.
Kunle: MIVA changed its name in 2014, apart from various other names in the 90s, you changed from MIVA Merchant, I believe, to just MIVA. Was there a reason why you made the change in 2014?
Rick Wilson: Absolutely, and it was a simple one. When we bought the MIVA assets back from the middle owners, they kept the name and we had a right to the MIVA Merchant name essentially forever. Then, without getting too into the weeds on this, they got acquired by another company, or the name did and then they sold us the name back. It was always our preference just to be MIVA and it was a matter of the acquisition details that we had to be MIVA Merchant for 6 years.
Kunle: How many active customers does MIVA have at the moment? Is it close to my estimate from BuiltWith? 27,000?
Rick Wilson: BuiltWith data tends to be very accurate especially with us, but we actually use BuiltWith a lot. I get no referrals from them, they’re not an official partner of mine on any level, but I’m a big fan of their product, I think they do a great job. The data is accurate, there’s something to note about BuiltWith and the difference between those numbers and what we consider to be our active numbers. Over the life of our company, we sold hundreds of thousands of licences, 350,000-400,000 total licences, and at one point we had a larger installed base back when you mentioned finding us in 2005, back at that time our install base was roughly equal to the peak Magento installed base. Installed base is an interesting metric, it doesn’t actually mean anything if you’re not making any money off those customers, but we can’t discuss that here. We had this huge installed base and so we have actively, roughly 12,000 customers on our Software as a Service platform. That’s people paying us to keep their software up to date and most of them host it directly with us. We’re a little bit different than what you’d see from Shopify or BigCommerce or Volusion, we specifically focus on the mid-tier clients as well, so we’re not a standard multi-tenant SaaS solution. Every installation of MIVA is still a unique installation. We just built a cloud environment around that so that it can scale and be serviced as a SaaS solution but you still get the benefits of if your store is doing really well, no one else is bringing your store down and we try to avoid single points of failure. SalesForce, for example. If SalesForce has a hiccup today, which I don’t know that SalesForce is so big that they have hiccups that often, it’s not the end of the world for most people if they can’t log in to their CRM. It can be really annoying, it can screw up your day, but ecommerce is unique. Ecommerce is more like banking websites or banking relationships. They can’t go down and occasionally they do. But the level of intensity and uptime on an ecommerce site needs to be very different than almost every other website on earth.
Kunle: I have two questions just to follow on from what you’ve just said. One is why did you make the decision to go SaaS in 2009, because Magento was founded in 2009 as an install platform, but you decided to go SaaS? Why did you bet on SaaS rather than go down the way of Magento as an installable software on your server?
Rick Wilson: I guess I would say that we had a different operating thesis and there were different things going on. Magento did some brilliant things especially from a marketing standpoint. Magento really, in some ways, piggybacked on the WordPress revolution, they focused on the open source revolution and there was one other thing that was going on at the time that was very beneficial to Magento which was that OSCommerce, and to some extent ZenCart, had been the defining open source shopping cart and OSCommerce basically had died and Magento came in at the right time and went down that model. With that said, and even with all their user success, since Ebay doesn’t break this data out specifically, we don’t know for sure but I know what I hear through the grapevine, I don’t think Magento’s business model has actually been proven. What I mean by that is I don’t believe Magento’s ever made any profit. They’ve lost far more money than they’ve made and in the tech world, people sort of don’t care but we do. The reason we went Software as a Service is we refused to take any outside money and we don’t have quite the same zealotry that you would see from a basecamp or what’s known as 37 signals, the guys who created Ruby on Rails. But we’re sort of similar to that. We don’t speak about it publicly and passionately but we wanted to build a company that we didn’t lose control over and that was profitable in its own right. I don’t know if you’re a fan of the new Mike Judge show in Silicon Valley?
Kunle: I haven’t seen it, it’s not aired here in the UK.
Rick Wilson: I won’t make too many references then, but if you play in the venture backed world, there are some winners and it’s a little bit like Hollywood, they focus on the 1 out of 1000 or the 1 out of 10,000 to become unicorns and what you’re not reading about in Tech Crunch every day is the 999 other guys who poured their life, heart and soul into something and walked out with nothing. We decided that if we couldn’t prove the business model as a traditional business that makes its own money in its own way, that we weren’t going to go it. So that’s sort of a long answer to why we didn’t try to match Magento. We also weren’t interested in going open source, that was just a different philosophy.
Kunle: That makes a lot of sense. The ecommerce SaaS industry at the moment is quite a competitive space and I think it’s lucrative. So where do you think MIVA stands across the borders compared to other SaaS ecommerce platforms out there?
Rick Wilson: I actually think of what I was saying about Magento is true in our space. On the low end you have what I would classify as Shopify, BigCommerce and Volution, and while Volution was profitable for a long time, from a financial perspective ran on similar principals to the ones I just mentioned, they ultimately made a decision to take a bunch of money and try to build this enterprise product and go on a different path. Shopify, from everything I can tell, they ran their company very well, they focused on a different end of the market than we are but again they are private, so I don’t know for sure. But from what I can gather, neither Shopify nor BigCommerce have proven the ability to make money with the clients they have and the fundamental problem with that end of the space is you have large percentages of customers not doing any sales because they are not entrepreneurs, they are “wantepreneurs”. That’s ok, I don’t mean that in a disrespectful way. I mean that they don’t have a real business. If your business model is people that aren’t actually going to use your product but paying you a monthly fee, then you have a retention problem and I don’t think you can fix that retention problem. So yes, it’s a lucrative market. If I had to bet, I think Shopify will win the low end. If anyone’s going to turn the low end into a business model that functions for a long time, my bet would be on Shopify. But I’m not sure that’s a proven thesis yet and I think that the mid-market, the merchants doing 100,000 to 10 or 100 million in online sales, especially in the Business to Business space, you have companies that are willing to pay, I’m not talking astronomical money, I’m talking the difference between an average revenue per client in the low hundreds per year to the low thousands, and so MIVA’s focus isn’t to get a million clients that are giving us $100 a year. In a perfect world, if I had 10,000 clients spending $5000-$10,000 a year with us, that’s a huge great business. So we’re focused on that in the mid-market and if you look at BuiltWith, the way I like to look at MIVA and I think BuiltWith shows as well, is if you go under Ecommerce and you go under Enterprise and look at the whole market, we have the largest section of enterprise ecommerce stores and that’s really what we’re aimed at.
Kunle: What’s the price point of MIVA?
Rick Wilson: We span both the small business and the entry-level enterprise. The word enterprise can be a catch-all too so there’s demand where there’s enterprise and they are $1 Million a year and we don’t have any clients like that. But it starts at $50 a month and our business clients are spending 3-4 thousand a month. So that’s the range.
Kunle: Right. The reason I brought you to the show, we’re almost 30 minutes in, is to talk about shopping cart best practices. There are some myths I’d like to burst and clarify so I have a couple of questions for you. Let’s start out with my first question. One is it’s 2015 and online retailers have to think about getting their stores to be device agnostic as well as the checkout pages. What advice and approach should they take to deploy the checkout pages?
Rick Wilson: That question is spot on. The number one question facing any retailer today, online, especially if they’ve been a long time online retailer. Our preference for the small and mid-size market is responsive design. We feel that you can have the performance without the server-side load and going all the way to adaptive and having a mobile app. If you’re the vast majority of our customers, their brands aren’t big enough to warrant downloading its own standalone app like on Amazon. So I think responsive design is the secret there and I think really just cutting out all the BS. Getting through it and making it as simple as possible. I do think some of the checkout badges are very helpful on smaller screens, like Paypal Express Checkout and Amazon Payments. At this point, Apple Pay is not browser based, I know nothing, this is not insider information on any level, but you have to assume that someday Apple will find a way to let touch ID validate a browser and Apple Pay will come to the browser. Those things make a difference. The payment makes the pinpoint, but the first step is making sure you have a responsive web design and that the checkout flow is really designed for that device and that it adjusts itself to the device.
Kunle: Fantastic. Let’s talk about the checkout flow. I’d like you to break down the steps and structure required for. What do you think is an optimal ecommerce checkout process or flow?
Rick Wilson: I think there’s two. I think, personally, for a first time shopper the optimal experience is very similar to Amazon’s actually. Amazon’s is three steps. It’s all your personal data, then it’s shipping and payment and then it’s done. So I think that’s generally optimal. I think depending on what you’re doing and the number of repeat buyers you have and what your market is, I think potentially storing a wallet on your system so that they can get through those same three steps without typing on the second time they come back. It can be really helpful but it does depend on what your repeat buyers are. If you’re selling broken Iphone screens, that may not matter. If you’re selling clothing that’s very stylish and trendy and every two months people want new stuff, that becomes very important.
Kunle: How do you define a wallet?
Rick Wilson: The wallets I was mentioning there specifically I meant the wallet products by the big companies. So I was talking specifically about Paypal Express Checkout, Amazon Payments, to some extent I’d be referencing things like VISA Checkout but that hasn’t seen wide adoption, at least not here in the states yet. The one that has clear leading adoption here in the States is Paypal Express Checkout and the second to that is Amazon Payments and there really aren’t any others in the States that are meaningful. The purpose of those is they have the same things that you have in your Amazon account pre-stored. So I put in my phone number and my PIN or however I validate and then I can just pick pre-written fields as opposed to re-typing them. So I can say “ship to my home address or ship to my work address” and “use this credit card”. So as opposed to having to type 150 characters on my phone, I can make 4-5 choices with my thumb and have the same checkout experience.
Kunle: Fantastic. So a three step process and the option to have a wallet to skip the first step more or less. What things actually annoy you? What should be avoided in the checkout? What are you seeing some of your customers do that, to you, should be an absolute no-no?
Kunle: It sounds like your preference is multi step checkout processes?
Kunle: I see your point. So you could have a dedicated page that handles the shipping and has a lot of functionality and then move on to confirm your order. There’s a lot more clarity also, I know exactly what I’m paying for shipping at that step. What about guest checkout? There’s been an argument on major ecommerce blogs and websites as to whether guest checkouts are worth it or not. My question is should it be encouraged? What’s your opinion on guest checkout?
Rick Wilson: My opinion actually conflicts with our software’s default set-up, luckily you can do it both ways, but my opinion is this. I personally would not have an account process interrupt checkout flow at all and I would auto create an account for everyone after the checkout. This is becoming more popular. So you go through, you checkout and then essentially in your invoice it says “By the way, we created an account. Next time you come back, just use this email address and you can recover your password here”. That’s my personal preference because you get the best of both worlds. There is some downside to that though. If you do that and I don’t realise that I have an account and I’m not comfortable using the “forgot password” button, every time I go to checkout if it sees that I have an email already on file and it won’t let me checkout because of that, that’s gone from a good thing to a horrible thing. But I think it comes down to retailer’s needs. Business to Business accounts, for example, really have to have accounts. But if you don’t have a lot of repeat buyers, forcing them to create an account or go through that weird screen where it’s registered users on the left and create an account on the right and guest checkout at the bottom which is a really common sort of structure. That page is confusing to a normal person, you just want to buy this thing. I don’t know if you guys ever had RadioShack in England but here in the States there was a time before RadioShack’s recent demise where you couldn’t checkout without giving them a ton of marketing information. “What’s your ZIP code, what’s this…”. I’m just buying a cord to plug into my Ipod, leave me alone. I think our customers are like that. Google Analytics had a great YouTube video a few years ago where they illustrated conversion optimisation challenges. If you search on YouTube for “Google Analytics conversion optimisation checkout”, you’ll see they use a grocery store supermarket as a case study and they show someone trying to checkout at the grocery store and someone putting up all these hurdles for checkout and how humorous it is to see that in real life. I think there’s a rule of thumb merchants should follow. What’s the best experience for your customer? Work backwards from that as opposed to “What’s the information I need?”. You want to start with “What’s the best experience for your customer?” and then “How do I get the information I also need?”
Kunle: That makes a lot of sense from a guest checkout standpoint. I guess it starts out with the business fundamentals, if you want to repeat business you want to create an account, if it’s a one-off type of business, you could encourage guest checkout. I would definitely agree with you. My next question has to do with how retailers can drive up their average order value at checkout. Do you have any tips to increase average order value at checkout?
Rick Wilson: Yeah. This is not my speciality, so I don’t have any data to back this up, but I’m just going to base this on the fact that I shop a lot online and I see a lot of stores. I think properly using related products during the checkout flow is very important. For example, I just bought some pillows, and Amazon does this fairly well, I don’t even think I got a discount, they just said “Do you want to buy a hypoallergenic cover for your pillow?” and I said yes, and I bought two pillows and two hypoallergenic covers for my pillows. I was putting them on and putting the pillow case on top of the cover and I realised “Wow, I just got talked into having two pillow cases” and it was clever. It increased average order value and took an $80 order and turned it into a $100 order. It was very clever. I think related products “Customers who bought this, also bought that” is going to be your single best tool. That’s if you’re going to do it at checkout. I also think there are other ways post-checkout to convert people back into repeat shoppers and come back and buy more. It’s an old standard in sales. Once someone’s said “yes” the first time, once you’ve closed the deal, they’re ready to buy more so you should ask.
Kunle: What other tips can you give post-sales to get them to become repeat customers?
Rick Wilson: I think post-sales, the first thing I would do right away is send an email that said “Congratulations on buying your new pillows, had you considered buying hypoallergenic dust mite covers for them?”. I think merchants get hung up on “I don’t want to send too many emails”. The problem is this. Emails at this point in time are like television commercials. There are definitely companies that send too many, but most merchants I see don’t send enough. That’s one way to do it. Then, obviously, you have abandoned cart stuff which I think we’ll talk about later. I think just “Hey, you bought this, you might improve your experience if you also bought that” and if you’re telling the truth, it’s good content marketing. It sort of goes back to why I think Google’s algorithm changes are great. It’s “how do you gain their current algorithm without it being a good game?” If you’re providing good content then everyone wins.
Kunle: Now that we’ve talked about ways of getting the most out of the checkout process, what about friction points? Where should retailers typically check for friction where there are drop-offs in sales or turn-offs to convert into actual sales at checkout?
Rick Wilson: I think the first thing they should do, I see a lot of merchants who haven’t done this, is set up a proper Google Analytics funnel or at least some analytics funnel. If they’ve never just done a funnel, let’s say you have a three step checkout, you see things in basket then you see the customer information page then you see the shipping and payment page then you see the close, so you have ultimately four visualisation points on a three step process. That’s going to show you at a broad level where your pain points are. They can range. The standard ones are shipping, the customer was shocked by the shipping price and they bailed. Another one I see a lot is the payment integrations aren’t always correct. One pain point I find probably more often these days than shipping is they’ve installed something like a PayPal or an Amazon and then they haven’t QA’d on multiple browsers or operating systems and I’ve had major retailers, like top 200 retailers where “I just want to checkout with PayPal and it doesn’t work” and it’s not PayPal’s fault, it was their fault. One tip I have is this: if a customer send you an email or fills out your contact form or calls and says “Hey, I was just trying to checkout and this didn’t work” I see a lot of merchants blow that off. Maybe because they don’t have a sense of how to fix it, but you need to chase those down like stories of UFOs. Chase them down because that customer cared enough to call you and tell you “Hey, I’m trying to give you money and I’m having a problem”. You need to find it because if they are having that problem, there’s probably 10 people who didn’t tell you or more and just really spend a lot of refinement process on making sure that shipping and payment work.
Kunle: Absolutely. Payment gateway integration is all about testing, testing, testing. I love what you said about QA. Just to round up this section, what about shopping cart recovery? I was at IRX Expo, it’s a huge expo here, an ecommerce retail expo and I think one of the biggest sub sections in ecommerce solutions was shopping cart abandonment software and solutions. It’s really tied into shopping carts in itself. How do you think it can be properly integrated into shopping carts in terms of recovering your basket, trying to get a sale in ecommerce?
Rick Wilson: I think the answer to that varies slightly depending on the size of merchant but first and foremost, the vast majority of merchants don’t do anything. The vast majority of merchants aren’t doing any cart recovery. So something, in this case, is always going to be better than nothing. Just setting up a standard, in the most simple way, even if you only got their email during checkout and then they bailed on checkout and 24h later you send them an email, it doesn’t even need to have an offer in it, just “Hey, did you still want to buy this?”. I think most merchants who aren’t doing anything would see some results from that. I think there are some more optimal processes. I think a three email campaign, I think trying to set a cookie and using other marketing tools to calculate email address based on the cookie so that you don’t have to have necessarily collect their email address super early. And I think getting the first cart recovery email out within 2-3 hours are all things that, if I was a traditional merchant, I would be focused on and at least testing. The thing I see most broadly is that most merchants do no cart recovery. I think it really hung up on “If I do cart recovery, I have to give an offer and I’m going to train my customers to abandon stuff and get the $5 off”. That may or may not be true and the way to find that out is with data so why don’t you start with not offering an offer, just being a nice person and sending a nice email and then see what kind of response rate you get from that, and then if it’s a meaningful exercise and you have the resources, then maybe segment 20% of your list and try sending an offer and see if you get a big difference. Some of that stuff gets complex and a lot of these merchants are one or two man shops. But for the one or two man/woman shop, they need to just get an email out that just says “Hey, thank for visiting my site, don’t forget to complete checkout”. That will go a long way.
Kunle: Exactly. What about platforms? Would you suggest retailers actually build systems themselves or do you have any platforms that you’d recommend?
Rick Wilson: I think that really depends on size of merchant. For the bottom 75% of our merchants there’s a plugin for MIVA that’s very inexpensive, it’s like $50-60 one-time and a couple of hours of configuration and it’s basically what I just described. You set up a single campaign, a single date trigger and it just triggers emails X amount of times. I think for the smaller merchants, something like that as an easy plugin or that’s built-in to the shopping cart platform would be all they would need. I think for the slightly bigger merchants, one of the ones I like is Spring Metrics, they have a lot of marketing bells and whistles and they are still young and I believe they are venture financed so it will be interesting to see how they shake out in the long run, but I definitely like what I see so far, they send some nice daily analytic emails as well as tools for doing it. AddShoppers is another one that I like a lot. They are sort of like a ShareThis where you put buttons on your blog and ecommerce pages and they also have some recovery products. I think for the big merchants then you get into the Brontos and the ListTracs where you need a full service product but you need to be a pretty big merchant. If you don’t have enough cart abandonment so whether a 1-2% swing in improvement is going to change your margins, then those things are probably going to be hard to justify themselves and the analytics attributions on those platforms gets a little hairy because they want to take credit for everything, which I understand, if someone ever clicked a link, I get credit, and the merchant always has this sort of nagging feeling in the back of their head “Well that person was going to come by anyway”. So you need to be a bigger merchant to justify the big platforms.
Kunle: One final question before we round up around persistent baskets. What do you think about persistent baskets and how long should they persist?
Rick Wilson: I think that like most things it depends on the business model, but my preference is they should persist effectively indefinitely like Amazon. But the caveat to that is to make sure you don’t have inventory problems or that you’re comfortable selling something that’s out of stock or at least having a stock check before they can checkout. Both Apple and Amazon follow the same model where you have this persistent basket that is persistent indefinitely, but if you’re selling one-of-a-kind movie posters, that doesn’t work. So it really depends on what you’re selling. Ticketmaster couldn’t go with a persistent basket. All things be, in a Business to Consumer perspective, I like long baskets. I think it’s helpful. I think it will increase average order value but you need to make sure it fits your business model.
Kunle: It’s all quite interesting. It falls into what you said if you could get an automated email saying you’re running out of stock “You have stuff in your basket, but we only have 1 item left, hurry!”
Rick Wilson: Exactly. That kind of thing. I think persistent baskets, properly managed, are generally a good thing but inventory can become a really tricky thing depending on what someone’s selling and at the end of the day, you need to make sure your operation functions.
Kunle: Ok. I’m just going to ask you about books, resources and tools you’d recommend to retailers. Do you have any? Let’s start out with books. What books on retail and marketing are your favourite in retail?
Rick Wilson: Avinash who works in the Google Analytics team has a couple of books, I don’t know the names of them off the top of my head, but if you go to Amazon and search Avinash Kaushik, you’ll find some books.
Kunle: He has a book called “Web Analytics 2.0” I believe, I’m not sure if there’s been a follow-up on it.
Rick Wilson: Tim Nash has some interesting books on conversion optimisation which I’ve been a fan of. Tim’s stuff tends to be focused more on the desktop, but I think the principles are generally applicable. I don’t know that I have a favourite. John Lawson has a book called “Kickass Social Commerce” which is fun. The number one thing I see is analysis paralysis. They sit around thinking all day and they don’t do anything. So start doing stuff and if the books help you get off your butt and do it, then that’s a great help. I don’t have any book that one must read though.
Kunle: Ok, what about tools?
Rick Wilson: Definitely there are a lot of tools. Google Analytics being the one that I see most often not used. It’s free and you’re giving Google your data so there is a trade-off there, but for most merchants that’s an easy trade-off to make. I think we use SEMrush. We use MOZ.com, which used to be SEOMoz. I think tools like that are very important. They crawl your site and they give you a sense of what’s going on your site. Google Webmaster Tools is Google focused and, again, helping Google, but it’s sort of a MOZ and an SEMrush. I think those are my favourite tools. Those are the ones that I log into every day.
Kunle: Fantastic. Finally could you let our audience know how they could get in touch and reach out to you if they wanted to?
Rick Wilson: Sure. If someone is still listening after 57 minutes, I’m very impressed. Two ways: MIVA.com and my email address is email@example.com and finally on Twitter I’m @RickMIVA
Kunle: Fantastic. Thank you so much for being part of the show, Rick. It’s been amazing having you and thank you so much.