The recent Insights conference in Budapest brought together eCommerce experts from across the region for an open exchange of knowledge and experiences. This was an exclusive, invite-only event curated by Ingenico to create a "meeting of minds," a place where internationally successful, trendsetting companies gathered to share their eCommerce journey and stories. Vindicia was invited to help run a digital workshop at the conference. There was a wide range companies represented in the group from industries such as media and publishing, online gaming, online dating, and travel agencies. The following is a brief report of the workshop.
Getting started – as an introduction, we started the workshop by focusing on the digital journey, as detailed in the illustration below.
Taking the typical customer's journey for digital products, we considered:
- Where are the entry points?
- How do you convert?
- What informs the purchase decision?
- When do customers become loyal?
- Where are the churn points?
We then moved on to the main sections of the workshop. These sections covered: Acquisition, Growth and Retention. The following is a brief overview of each of these topic points.
This section of the workshop focused on the business models and channels for new customer acquisition. We highlighted some of the following points as best practices:
Deciding on the right channel - is the prospect pool size large? Does your branding fit? What is the conversion likelihood? Is there retention potential? These are the key questions that need to be addressed when selecting the best channel to market.
Optimizing acquisition through payment – can be improved by analyzing these factors:
- Country/region payment preferences
- Demographic payment options
- Checkout process/payment page – embedding options raises conversions
- Acquiring setup – local acquiring can boost conversion 5-10%
- Rejection code messaging – customized error messaging raised conversion by 5%
Further best practices – the following tips can easily be applied to boost acquisition rates:
- Free trials without payment methods have low conversion
- Always capture a customer's email early (in case of abandonment)
- A/B test when to ask for payment info – sometimes earlier in the process increases acquisition
- Answer questions before they are asked – know your customer and lead them
In the follow-up discussions, it was interesting to see the range of channels being used to acquire customers. This included TV commercials, billboards, search advertising, and social media. In terms of signing up new customers, localization was seen as a key enabler. Localization was discussed both in terms of language and payment options. Voucher codes were also popular to try to encourage potential customers to convert. In closing, there was some discussion about launching into new geographies to increase acquisition rates.
Expansion and Retention
The workshop sections following acquisition were focused on the next step in the digital business model. Once you have acquired a customer, how do you grow the average revenue per user (ARPU)? Equally, how do you ensure that you retain them as loyal and satisfied customers? Once again, we focused on best practices before moving to group workshops. Here's some of the best practices:
Offering personalization is a great way to ensure you retain your customers, building loyalty and trust. This can be achieved by demographic or geographic segmentation, then offering different price-points, or relevant offers to these segments. Social interaction and gamification can also be used to further engage and raise ARPU by encouraging further usage of digital products.
Optimizing expansion through payment involves analyzing these factors:
- One-click payments – know when to ask for more information – CVV, 3D, etc. – making it easier to upsell
- Checkout process and payment pages – keep customers engaged as much as possible – don't take them outside of the purchase flow
- Multi-product tokenization – know how to ask for backup payment methods
Reducing churn will have a big effect on the revenue of any digital business. Churn typically falls into two categories. Firstly, voluntary churn, where the customer decides they are no longer happy with the product or service. Secondly, involuntary churn, where there is no action by the subscriber, the payment fails and the subscription is canceled. We discussed some powerful processor and billing optimizations to address churn. The compound effect of these improvements can lead to an increase in the subscriber base up to 25%
As we moved into the group workshops, there was engaged discussion on how often and when to communicate with customers. The consensus was that when digital merchants are confident in their products, they shouldn't be afraid of communicating with their customers. With relevant offers and promotions, it is possible to grow the average revenue per user. Additionally, there was a discussion point on the importance of providing a great user experience. Organizations are increasingly using help guides and video tutorials – even for the most basic of tasks. This resulted in a higher conversion rate on promotions and helped reduce churn.
It was great to participate in the workshop and share the insight we've experienced. It was equally rewarding to learn from a wide range of digital businesses how they are tackling the challenges of acquisition, expansion and retention. My overall perception from the session is that digital is an exciting place to be. With digital, it's possible to rapidly test new go-to-market ideas. With techniques such as A/B testing of products, promotions and price points alongside data-driven personalization, it's possible to build long lasting relationships with customers that love your products. Many thanks to Ingenico for hosting a fantastic event and providing Vindicia with the opportunity to participate.
You can learn about further best practices for digital products and services, buy downloading a free ebook here.