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May 15, 2008
Case Study

Automated Chat Saves Abandoned Shopping Carts: 5 Simple Steps to Get 10% Lift

SUMMARY: Abandoned shopping carts have been a longtime bane for ecommerce sites, still at an average of more than 50%, according to MarketingSherpa data. With the cost of attracting shoppers increasing, tests to convert those abandoned carts remain a work in progress for many.

See how one eretailer found some success with an automated chat system, and they’re now saving 10% of their abandoned carts. Includes 5 simple steps and test results.
CHALLENGE
With the average shopping cart abandonment rate at 52.1%, according to MarketingSherpa’s 2007 Ecommerce Benchmark Guide, the problem has lessened from previous years, but it still hasn’t gone away.

That’s why eretailers continue to look for ways to cut that number down, especially with the cost of acquiring online customers on the rise. They’re wise to do this since Sherpa data has found that shopping cart tests consistently rank as having the most profound impact on cart abandonment.

Dave Duckwitz, General Manager, Ecommerce, 123InkJets.com, and his team faced this dilemma head-on a year ago. “The situation required us to hone our processes, hone our costs and, of course, we wanted our conversion rates as high as possible.”

They briefly entertained the idea of implementing live chat to try to convert abandoned carts that were filled with printer ink and cartridges. However, the additional staff this would have required simply didn’t offer an acceptable ROI. Duckwitz wondered if an automated system might do the trick.


CAMPAIGN
Duckwitz and his team first did more research on and experimented with potential solutions for abandoned carts.

In the end, they implemented a simple, automated chat pop-up with two big upsides:
o Since it was automated, they didn’t need to hire additional staff members
o The pop-up was relatively unobtrusive for the shopper

Here are the 5 steps they followed to implement the automated chat system:

-> Step #1. Set strict frequency

Duckwitz and his team limited the automated pop-ups to appear only one time after shoppers left the site with items remaining in their shopping carts. Importantly, they set up that single appearance so it manifested in an unobtrusive manner.

For instance, if a shopper added an item to their cart, a *pop-under* mini-window opened underneath the window. If the shopper moused over the window, they saw a small box with copy that said, “Please leave this mini-window open.”

Then, if the shopper left the site with an item in his cart, the mini-window popped up to become the chat box. If the user opted to close the box but returned later, the pop-up would not be reactivated at any point.

-> Step #2. Optimize script and offers

Next, they created a script with an offer that might get shoppers’ attention: a discount. When the pop-up appeared, the automated agent -- named “Tara” in all chats -- said:

“Hey wait! We hate to see you leave 123InkJets. So we’d like to offer you an instant 10% savings on your order today. CLICK HERE and use ‘10OFFINK’ to receive your 10% discount!”

From there, based on a series of tests where Duckwitz picked up on keywords to customers’ most-common questions, the answers varied according to the query. For example: A customer’s concern about online privacy and price brought up the following response from Tara:

Tara: Just type ‘HI’ or ‘Hello’ in the space below to let me know you are there.
You: Hi
Tara: 123Inkjets is dedicated to bringing you premium laser & inkjet printer cartridges, photo paper, and other printer supplies at reduced prices. Our compatible and remanufactured ink cartridges perform as well, if not better than, your original manufacturer’s cartridge.
You: Is your site secure? I’m a little concerned about privacy.
Tara: Our site is guaranteed secure and confidential.
You: What if I can get a better price somewhere else?
Tara: That depends on exactly what you get. What I can tell you is that if you order from us today we can give you a 10% discount! Remember “10OFFINK” is what you need to use to redeem your 10% discount!

If the user doesn’t respond, they created a script that mentions the discount, a one-year money-back guarantee, free shipping on orders over $55 and a thank-you message for shopping at their site. “We have done a lot of tweaking when it comes to the different kinds of responses by Tara,” Duckwitz says.

-> Step #3. Test coupon amount

They knew that incentivizing shoppers with a discount would likely help response, but they tested to make sure. They did an A/B split for a 10%-off coupon code vs. no discount offer. They believed that the 10% savings was large enough to bring customers back without killing their profit margins.

-> Step #4. Hyperlink back to site

Next, they included the “CLICK HERE” copy in the pop-up as a hyperlink back to the homepage. Since they didn’t know the exact reason for abandonment, Duckwitz didn’t want to direct the chat clickthroughs back into the shopping cart.

“Your odds of hitting the right issue with the script might not be so good. We wanted to give them options to shop more.”

They also left a checkout button in the top right-hand corner of every page on the site for any shopper who might be ready to check out.

-> Step #5. Schedule monthly optimizations

Finally, to make sure the chat function worked properly at all times, Duckwitz and his team scheduled monthly tune-up sessions to continually optimize the system.

In those tune-ups, they reviewed:
o Conversions to follow dips or lifts in performance
o Chats to home in on new keywords that might were being used in customer queries
o Answers to queries so they could pick more appropriate ones based upon what they learned


RESULTS

Duckwitz and his team are elated that they gave automated chat a chance. For the past 11 months, the feature has cut back their abandonment rate by “10% on average.”

While boosting sales markedly, the automated chat system has also helped them increase their email list significantly by capturing otherwise lost visitors’ addresses. “We’ve almost become dependent on the system. If it were suddenly not there, we would certainly feel it,” Duckwitz says. “And, we are able to optimize our site design, according to the feedback we see in the chat logs. Customers will say things like, ‘I went to this part of the site and couldn’t find what I am looking for.’ That’s helpful to us.”

In the A/B test of a 10% coupon vs. no offer, the discount obviously won. The coupon has been a key to making the whole system purr. “It drives people back to the site for the biggest reason they use the Internet -- to save money.”

As for the automated feature’s cost-effectiveness, “the ROI is outstanding,” Duckwitz says. “You might get higher conversions with the live chat, but it’s going to come with a higher cost.”

Duckwitz and his team also learned another lesson: getting the script right takes a great deal of work and has been a continuous project. “It’s not a perfect science. Automated chat is only as good as the way you correlate appropriate answers for their questions. We are constantly looking at it and correcting it.”


Useful links related to this article

Creative samples from 123Inkjets.com's automated chat system:
http://www.marketingsherpa.com/cs/123inkjet/study.html


UpSellit.com - provided the automated chat technology and helped with the implementation:
http://www.upsellit.com


123Inkjets.com:
http://www.123inkjets.com


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