Turning Browsers Into Buyers: Alternative Payment Methods Increase a Customer’s Willingness to Pay
Alex Rampell
January 03, 2008
Imagine walking into your local supermarket and seeing a checkout line strewn with hundreds of carts brimming with groceries but abandoned by shoppers. Was there a fire? A natural disaster? In a brick and mortar supermarket, only a catastrophe could cause such an odd sight, but online it’s par for the course.
The majority of customers who take the time to load an online shopping cart never make it through the checkout—the industry average projects a staggering 60 percent of shopping carts end in abandonment.
Why would somebody go through the effort of filling his cart without completing his purchase? Quite often it comes down to price, or willingness to pay.
There is a lull between loading a shopping cart and actually paying that allows a pajama-clad online shopper plenty of time to pontificate the merits of the would-be purchase, look for a better price or simply get distracted and lose interest.
There are many ways to increase completed checkouts, but perhaps the most important one is to augment the customer’s willingness to pay. Adding alternative payments is a good place to start, because increasing payment options can rope in more potential shoppers.
For instance, if your wallet only contains an American Express Card and a $20 bill, and you stumble across a restaurant that sells $30 meals and only accepts Visa and MasterCard, chances are you will continue your stumbling until you find an establishment that accepts your money in a form you presently have available.
Likewise, the PayPal effect is real: somebody who just sold an antique doll on eBay via PayPal might have $200 sitting in a PayPal account and be willing to spend the balance on a somewhat cavalier purchase. It’s almost like money found under a couch cushion, subject to less stringent purchasing criteria than money earned from a paycheck. In this analogy, a customer is more willing to pay because he’s got extra money (via PayPal) stashed away for just such a purpose.
But sometimes people want an item, they just don’t want to pay for it no matter what form of payment is accepted, whether it be credit card, cash, check, PayPal, Bill Me Later, Google Checkout, gold ingots, etc... Traditional payments and most alternative payments don’t solve this problem—they simply shift the tender type around without overcoming the customer’s fundamental resistance.
What if you could offer these customers your product(s) for free if they bought flowers, or signed up for a premier wine club or switched insurance carriers – things that they apparently want to do anyway? It turns out that you can get paid for these free transactions, fundamentally changing the nature and numbers of the conversion game for “bad” customers.
A bad customer for one merchant might be a great customer for another merchant. The same person who abandons your shopping cart might be the best customer in the world (come Valentine’s Day or a friend’s birthday) for FTD, or a terrific shopper at Gap, or an ideal GEICO policyholder or a lifelong Blockbuster subscriber. These companies, in turn, will pay a lot of money to acquire a new customer.
This is where alternative payment companies like TrialPay help. TrialPay is a different kind of alternative payment—it’s a conversion tool for the large numbers of customers who ordinarily would not pay.
Just as Bill Me Later helps convert a customer who might not have enough cash to make a purchase now, TrialPay helps convert customers who wouldn’t normally purchase period by allowing these customers to “pay” when they transact with a trusted partner for which they already have an affinity (like GEICO, FTD, Blockbuster, etc…). The GEICOs and Blockbusters pay TrialPay for the customer acquisition, which covers the cost of the free product or discount you give to the customer.
The concept is not too far removed from Amazon’s “Get $30 Off When You Sign Up for an Amazon.com Visa Card” promotion that displays in every U.S. checkout – the key difference being that not everybody wants a credit card, and offering other services might prove more lucrative to the merchant, not to mention more compelling to the consumer.
If a customer attempts to abandon his cart, display a message offering his chosen product free if he completes an advertising offer (send flowers from FTD or subscribe to The Wall Street Journal, for example). Even though you give away your product for free, you still get paid the full retail value by the advertiser.
Merchants currently use the TrialPay payment option to prevent cart abandonment, reduce uninstalls, convince “free” customers to upgrade to a paid version, entice lapsed users to become active again and increase conversion anywhere else customers exit without purchasing.
By increasing a customer’s willingness to pay, you significantly boost revenues and conversion rates from marketing initiatives you’ve already developed. With the TrialPay model, everyone wins: customers get a free product and a feeling of loyalty, advertisers acquire new customers and merchants earn significant revenue from “lost” customers.
This alternative payment model turns abandoned carts into completed sales by matching prospective buyers with their preferred brands.
The majority of customers who take the time to load an online shopping cart never make it through the checkout—the industry average projects a staggering 60 percent of shopping carts end in abandonment.
Why would somebody go through the effort of filling his cart without completing his purchase? Quite often it comes down to price, or willingness to pay.
There is a lull between loading a shopping cart and actually paying that allows a pajama-clad online shopper plenty of time to pontificate the merits of the would-be purchase, look for a better price or simply get distracted and lose interest.
There are many ways to increase completed checkouts, but perhaps the most important one is to augment the customer’s willingness to pay. Adding alternative payments is a good place to start, because increasing payment options can rope in more potential shoppers.
For instance, if your wallet only contains an American Express Card and a $20 bill, and you stumble across a restaurant that sells $30 meals and only accepts Visa and MasterCard, chances are you will continue your stumbling until you find an establishment that accepts your money in a form you presently have available.
Likewise, the PayPal effect is real: somebody who just sold an antique doll on eBay via PayPal might have $200 sitting in a PayPal account and be willing to spend the balance on a somewhat cavalier purchase. It’s almost like money found under a couch cushion, subject to less stringent purchasing criteria than money earned from a paycheck. In this analogy, a customer is more willing to pay because he’s got extra money (via PayPal) stashed away for just such a purpose.
But sometimes people want an item, they just don’t want to pay for it no matter what form of payment is accepted, whether it be credit card, cash, check, PayPal, Bill Me Later, Google Checkout, gold ingots, etc... Traditional payments and most alternative payments don’t solve this problem—they simply shift the tender type around without overcoming the customer’s fundamental resistance.
What if you could offer these customers your product(s) for free if they bought flowers, or signed up for a premier wine club or switched insurance carriers – things that they apparently want to do anyway? It turns out that you can get paid for these free transactions, fundamentally changing the nature and numbers of the conversion game for “bad” customers.
A bad customer for one merchant might be a great customer for another merchant. The same person who abandons your shopping cart might be the best customer in the world (come Valentine’s Day or a friend’s birthday) for FTD, or a terrific shopper at Gap, or an ideal GEICO policyholder or a lifelong Blockbuster subscriber. These companies, in turn, will pay a lot of money to acquire a new customer.
This is where alternative payment companies like TrialPay help. TrialPay is a different kind of alternative payment—it’s a conversion tool for the large numbers of customers who ordinarily would not pay.
Just as Bill Me Later helps convert a customer who might not have enough cash to make a purchase now, TrialPay helps convert customers who wouldn’t normally purchase period by allowing these customers to “pay” when they transact with a trusted partner for which they already have an affinity (like GEICO, FTD, Blockbuster, etc…). The GEICOs and Blockbusters pay TrialPay for the customer acquisition, which covers the cost of the free product or discount you give to the customer.
The concept is not too far removed from Amazon’s “Get $30 Off When You Sign Up for an Amazon.com Visa Card” promotion that displays in every U.S. checkout – the key difference being that not everybody wants a credit card, and offering other services might prove more lucrative to the merchant, not to mention more compelling to the consumer.
If a customer attempts to abandon his cart, display a message offering his chosen product free if he completes an advertising offer (send flowers from FTD or subscribe to The Wall Street Journal, for example). Even though you give away your product for free, you still get paid the full retail value by the advertiser.
Merchants currently use the TrialPay payment option to prevent cart abandonment, reduce uninstalls, convince “free” customers to upgrade to a paid version, entice lapsed users to become active again and increase conversion anywhere else customers exit without purchasing.
By increasing a customer’s willingness to pay, you significantly boost revenues and conversion rates from marketing initiatives you’ve already developed. With the TrialPay model, everyone wins: customers get a free product and a feeling of loyalty, advertisers acquire new customers and merchants earn significant revenue from “lost” customers.
This alternative payment model turns abandoned carts into completed sales by matching prospective buyers with their preferred brands.