Not optimizing your checkout funnel could be costing you millions.
I’ve helped a lot of companies optimize the checkout funnels on their e-commerce websites and mobile apps. My clients often have questions like:
- How many pages, steps, or even minutes, does a user take to get from decision to purchase?
- What are best practices to increase conversions and revenue?
- Should the number of steps be reduced? Simplified? Consolidated?
Checkout funnels can seem complicated.
The truth is, when you break it down, the checkout funnel is simply the series of steps (pages or clicks) a user takes to get from a landing page to the ‘Thank You’ page.
The checkout is the last step in the conversion funnel where, ideally, all the persuasion has been accomplished and the transaction simply needs to be facilitated. (For more on this topic, here’s how to understand the three stages of your conversion funnel.)
At WiderFunnel, when optimizing a checkout funnel, we look at the entire check-out path as a whole, the individual steps, as well as specific elements within each step.
In this post, I’m going to show you how to increase your conversions by focusing on the optimal number of steps to complete a transaction.
How do you design an experiment to test the optimal steps?
There are many components to the checkout funnel and it can often be overwhelming when trying to decide what testing opportunities to prioritize.
Our proven process begins with a LIFT Analysis and for a checkout funnel test, we start by confirming the goals and priorities of the funnel, this may include completed purchases, total revenue, product add-ons, increased wallet, etc.
Once the conversion goals are confirmed, we build out a testing plan and design experiments to lift conversions and create specific insights. Using a framework-thinking approach can help you structure your analysis, put yourself in your customers’ mindset and solve your real conversion barriers.
|78% of companies that use a structured process for conversion optimization gain increased revenues*. For WiderFunnel, over the last 2 years, that number is 100%!|
|*eConsultancy Conversion Rate Optimization Report 2013|
So now, let’s look at how the LIFT Analysis can help evaluate your checkout funnel.
The LIFT analysis
Value Proposition: The page may not be giving the user enough incentive to continue to the next step. For example, if on the shipping info page, the perceived costs of filling out the form is not outweighed by perceived benefits, your user may drop off.
Anxiety: There is a lot of anxiety when it comes time to checkout. Your page may not be instilling trust. How many trust icons do you have? The more the merrier? How about checkout steps? Are fewer better? What about just one (really long) page? Running a scroll map can help show how far users are scrolling down. If users don’t scroll down the page to the final Call-to-Action (CTA), the page is too long. Reduce the content or add an extra step.
Clarity / Distraction: Distraction is created when there is no clear goal on the page, eye flow may be disjointed, or the content may be unclear. Click maps can help unveil these issues. If a click map shows too many clicks on secondary actions or non-links, you need to work on removing distracting elements, clarifying the action that needs to be taken, and possibly reviewing the layout of the page.
Urgency: The page may not entice users to check out today. If you would like your user to purchase or convert right now, give them a reason to. Sites for airline companies do this well by mentioning how many tickets are left at a particular price.
For more on the criteria for a LIFT Analysis, read this detailed summary of the LIFT Model™.
Is the shortest path the best path?
A shorter checkout path may be better. Or, it might be better broken into more steps. There is only one way to know: You Should Test That!
I’m going to share with you a real world example featuring Telestream – who specializes in software that make it possible to get video content to any audience regardless of how it is created, distributed, or viewed.
Telestream’s customer acquisition strategy is centered around driving traffic to their website to trial, or to purchase from their online store. Shoppers can buy software online, download it right away, and immediately start using it.
We partnered with Telestream to optimize their entire purchase funnel, from the home page, to the product page, to the cart pages. After the conversion analysis we quickly started testing on to the Product and Shopping Cart pages.
We designed an A/B/n test to identify the optimal number of steps in the checkout process. While there is a ‘best practice’ that suggests that less steps is better, we all know that even best practices need to be tested.
Examples of checkout funnel tests
Are more steps is actually better? We ran several tests on the checkout funnel, and here is the winning variation:
Control: 3 Steps
A variation was designed with the same information as the control except spread across 4 steps (instead of 3). The rationale was that each step would be shorter and less overwhelming for the user. The risk was that each additional step may increase the chance that a user will drop off. It is rare, if not impossible, that 100% of visitors will go to the next step. So there are unavoidable leaks between each step.
Variation: 4 Steps
In the end, the variation with more steps won. We learned that reducing content per page can decrease anxiety for the user. In this case the improved conversion rate more than made up for the small proportion of users that dropped off due to the extra step. More steps in the checkout made it easier for the user to convert, and Telestream gained a 6.8% conversion rate increase over the control.
So, more steps is better. Right?
Not so fast… the case for fewer steps.
We tested the checkout funnel for another WiderFunnel client, Magento. Magento, a subsidiary of eBay inc, is an open source e-commerce software that allows their customers to build flexible and scalable e-commerce websites. Magento is rated the #1 e-commerce platform by Alexa, and many top brands use their services, such as: Nike, RosettaStone, Ghirardelli, Easton, Zumiez, Volcom, Olympus, Office Max, Fiji Water, Giro and Men’s Health. Just to name a few.
The buying process for Magento is significantly different than with Telestream, and our first task was to define an appropriate conversion goal. Magento uses their website to drive qualified leads. From the website a lead will fill out a form to request a demo, at which point they become a qualified lead. The conversion goal then was defined as a percentage(%) of visitors who become a qualified lead through the demo request form.
Are fewer steps better? Again, we ran several tests for Magento, and the winner is as follows.
We used a 2-step process Control variation, with the Call-to-Action (CTA) on the first page, and a form on the second page.
Control: 2-step process
The challenger variation was a 1-step process which placed the lead form on the first page.
Challenger: 1-step process
The 1-step process converted more leads. Fewer steps won! Placing the form directly on the demo page increased the number of qualified leads by 32.4%.
View the whole Magento Case Study.
The optimal number
With Telestream the number of steps increased. For Magento, the steps decreased. Both providing positive results. Regardless of the number of steps, not testing your conversion funnel will leave revenue on the table, which for some e-commerce companies can translate into millions of dollars.
So what does this mean for you? How do you go about finding the optimal number of steps for your checkout process? You Should Test That!