- Money, money, money baby. IMHO there isn't a metric out there that can tell you a lot so quickly and any improvement you make to it will directly and immediately impact the bottom-line.
- It measures the customer interaction in a very small number of web pages, probably one for cart and two to three for checkout. How many metrics out there can compete with that? Few pages, awesome optimization potential.
- Win-Win: By the time visitors fall into the influence of this metric they want to give you cash and you want that cash. How could that not be simply the best thing in the world?
Inspite of its absolutely adorable qualities it is surprising that this metric does not get as much prominence as, say, conversion rate (stop obsessing post, best practices post). People simply don’t seem to walk around with Abandonment Rate on top of their dashboards and consultants don’t center their pitches around helping improve this metric. My hypothesis is that
- we don’t understand the true power of this metric
- we don’t think we can improve the four odd pages that this metric covers
- there is some confusion around around a standard metric definition and that does not help
- usually this number is really “high” (YMMV) and we are embarrassed to put it in front of senior management
- there is no hype around this metric (hopefully this blog post will fix that! : ))
(While it is absolutely possible to apply this metric to a lead capture process, or other websites processes, for reasons of absolute clarity and maximum impact this post will focus purely on the metric in the ecommerce world.)
Site Abandonment Rate (in percent terms) = [1 – (the total orders placed on the website divided by total add to cart clicks)].
In english it is the number of people who intended to buy, by clicking on the add to cart button, to those who actually made it out at the other end, by clicking submit order. If on your website people purchase multiple items in the same session, trends of this metric will accommodate that behavior just fine.
The process that this metric measures on most websites is: click -> add to cart -> click -> start checkout -> create account (or login) -> click -> provide credit card -> click -> review order -> click -> submit order. Hence at its highest level the metric helps you understand how much money is left on the table by your customers.
I recommend this definition of the metric because few people measure the process described above end to end and if we measure it in silos (explained below) we tend to solve in those silos (cart and checkout). That is a problem because the most impactful solutions for improving this metric lie in end to end thinking.
There are no standards for Site Abandonment Rate that I am aware of (if you are please post in comments) but the range most brandished around is that the metric is usually between 50 to 70% abandonment. In my personal experience at different companies I have seen it between 25 to 55%. That should give you some range to think about.
Depending on the cost of items you sell on your website each percent point of abandonment could represent tens of thousands to millions of dollars per month in revenue. Hence my recommendation to have a almost irrational adoration of this metric.
Next Level Segmentation Recommendations:
Once you measure Site Abandonment Rate and know where you fall then it is time to segment. Two logical first level segmentations:
Cart Abandonment Rate (in percent terms) = [1 – (the total number of people who start checkout divided by the total number of add to cart clicks)].
In english this is the number of people who were motivated enough by your spiel to make a initial commitment to buy from you. They could do this for any number of reasons (saving the item for easy access, check shipping etc) but it is still a deeper interest than “browsing”.
In the context of your Site Abandonment Rate the Cart Abandonment Rate is very helpful because it will immediately isolate where most of the departures are occurring. Usually this should explain most of your Site Abandonment Rate because of the “relationship” with the visitor is fragile until this point (it is stronger than the "browsers" but still a bit fragile).
Checkout Abandonment Rate (in percent terms) = [1 – (the total number of people who complete checkout divided by the total number of people who start checkout)].
In english this is the number of people who decided to bail at the very last step of a very complex and complicated journey that is the purchasing process.
I have gone out on a limb in the past and have said that this number should be zero percent simply because there is no excuse for your website experience failing to deliver at this most critical of stages. Of course the number will never be zero but should be really close to it, after all can’t we all optimize the three odd pages that make a normal checkout experience to make it a flawless experience?
In context of your Site Abandonment Rate the Checkout Abandonment Rate will be a smaller number than Cart Abandonment, simply because if people make it this far they tend to get through (Important: YMMV).
So now you know your Site Abandonment. You have taken time to understand the distribution of departures between the cart and checkout processes. And sadly it turns our that your site is performing very sub-optimally!! Just kidding. : )
What could you do next?
Some suggestions on moving from simply reporting metrics to finding actionable insights, and taking action:
- Segment the Abandonment Rates to really understand where your pain points are. As is always the case you are looking for anomalies in the data and differences in the Abandonment Rate for different segments and causes for those differences. This can be great source of actionable insights. Segmentation examples would include:
- By “campaigns” (this would include PPC, Pay Per Click, / SEM, Search Engine Marketing, and direct marketing and other campaigns you run)
- By Referring URLS (who is sending you traffic that might abandon at higher or lower rates)
- By Products (this is not obvious but you’ll find large differences in rates for different product, or product groups you sell)
- Love Multivariate Testing: Both the cart and checkout are absolutely perfect for multivariate testing. They are usually “page level” experiences and hence lend themselves to multivariate testing very well. Use your favorite vendor tool to first “modularize” the page then create variations of content for each module and then let the “recipe creation” process create different versions of the page, go relax for a day (or more depending on how much traffic you get) and identify what page works best for your customers.
Remember there are hundreds of thousands of dollars at stake here so please give this testing process some love and a lot of attention.
- Challenge Fundamental Beliefs: If your Abandonment Rates are really terrible, step back to challenge some fundamental beliefs at your company. You can test these to prove if they move the right levers for your customers. These would be different for each company but some general guidance on what this could be:
- If you have “interruptives” in the process (buy this also please or upgrade for $5 etc), try to remove them and see what happens.
- If you don’t offer anonymous checkout, offer anonymous checkout. If you don’t offer an option to sign up for an account, offer that option.
- If you have a painful long checkout data input page, see what happens when you don’t insist on asking people to tell you the color of their eyes or some other expendable information.
Two minor best practice tips:
Think of these as things that have either been sore points for me personally or surprises that something so simple is so often overlooked, you can choose the reason you like best : ).
- Investigate if there are simple things people are looking, information that is only in the cart or checkout process that could “falsely” get people into that process. Two examples:
- Shipping Costs: If people just want to know what the shipping cost make it easier for people to find shipping than having to go to checkout or add to cart. Not only will this reduce abandonment, and give you your real abandonment rate, but it also sucks for your customers that you make this painful.
- Delivery Schedule: How long will it take me to get the product? Do you have it in stock? Let’s not wait until the end to share this nice information.
- Check that your website is carrying through promotions correctly and reiterates in the cart and checkout process (in bold gigantic letters) the discounts that your customer was promised in the offer or on your affiliate site or your product pages or in your campaigns. It is amazing how many websites don’t do this simple thing well.
I hope you are convinced of the potential of this really simple metric to add to your personal pocketbook, and that of your company. It is really rare to get a metric that focuses on such a small part of the website experience yet holds so much power to help our customers as well as us.
Agree? Disagree? Did I miss something above? Have a tip to share that worked for your company? Please share your feedback via comments.
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