As a small business owner, you know that understanding your customers is key to your success. You probably think that by doing things like profiling your customer base, studying traffic patterns on your website, analyzing your advertising and marketing campaigns, conducting periodic feedback surveys, and looking at sales trends, gives you a pretty good idea of what drives your customers to their initial purchase and what keeps them coming back.
A recent whitepaper from WorldPay suggests that your conclusions about customer behavior may very well be wrong.
The study, Are you giving your customers what they really, really want? A global research project exploring consumer attitudes towards online shopping, was conducted in early 2012. It consisted of interviews with 19,000 consumers in 15 countries and 153 senior decision makers at companies doing more than $8 million in annual online sales. It asked the same questions about online purchasing behavior to both consumers and merchants; and the overwhelming conclusion was that in many cases buyers’ actual motivations were quite different from what merchants perceived them to be.
- Top 3 Drivers for Repeat Purchases
- Consumers: security of financial information (75%), payment security checks (66%), guarantees and warranties (57%)
- Merchants: design and layout of website (67%), quality of website navigation (62%), and speed of buying experience (62%).
- Top Driver for Spending More with an Online Merchant
- Consumers: Payment Security
- Merchants: Faster Payment Process
- Top Reason for Shopping Cart Abandonment
- Consumers: Unexpected Costs
- Merchants: Customer was just browsing.
- 38% of merchants think payment declines are a primary reason for shopping cart abandonment; while only 11% of consumers cite it as a reason.
The above results are based on global responses. The study also broke down responses by country.
The following are interesting findings for the United States (2000 people surveyed):
- US respondents report spending 23% of their disposable income online. (It is 13% for Finland, 17% for Canada, 31% for China, and 33% for India.)
- 18% have been the victims of online fraud, and 59% have security concerns.
- 41% own smartphones and 15% buy online with them; 19% own tablets and 9% buy online with them. While this is lower than the global average; US users make 3% of their online purchases via mobile devices while globally the average is 2.5%.
- Top 3 Reasons US Consumers Abandon Online Purchases: unexpected costs (62%), just browsing (47%), better price elsewhere (32%)
- 32% of mobile device users prefer a mobile optimized website, while 18% prefer a shopping app. That said, the average mobile device user has 2 shopping apps installed.
- The most popular payment methods are credit card (76%), PayPal (54%) and debit card (50%).
- Americans overwhelmingly want to do business with American companies online.? Only 22% reported willingness to purchase from overseas websites – less than half the global average of 45%. The greatest concern with overseas purchases was security.
Download the complete whitepaper if you are interested in specific results for the other countries covered by the study. Additionally, the study breaks down respondents by spender profile, and provides behavior statistics for high, medium, and low online spenders.
What do the study findings mean for your small business?
- If you’re not making security a priority you should. And, you should make sure that your website tells your customers that their security is important to you, as that will impact their purchasing decisions more than an engaging design or optimized navigation scheme.
- Be upfront about the true cost of your products and services. You are more likely to lose customers by hitting them with unexpected fees at the end of the checkout process than you are by not having the absolute lowest advertised price.
- Include your address, or at least let customers know that you are a US company. It will drive sales in the US and it will not have a negative impact on international customers.
Perhaps the most important takeaway is the importance of talking to your customers – all of them – often. You will typically hear from dissatisfied customers. Make sure you are reaching out to satisfied customers too. If you don’t, you may end up with a lopsided and distorted view of what your customers really want.
PaySimple is a PCI DSS compliant online payment processing company for small to medium-sized businesses. If you’re looking for a way to process customer payments by eCheck, credit card, or ACH, please check us out.
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