CartHook: We help you recover up to 30% of your abandoned carts
One of the most common problems that we hear eCommerce stores are experiencing is cart abandonment.
Statistics show that up to 72% of carts are abandoned and this results in tons of lost revenue for online stores.
To speak on this topic today we have invited Jordan Gal, who is the Co-Founder of CartHook, a cart abandonment solution for online retailers.
Let’s talk about cart abandonment first. How big of a problem do you think it is in 2015?
OK, that’s a good place to start.
To talk about the problem in general, I’ll tell you a little about my background. I used to run an ecommerce business myself. We had several niche stores that sold very niche products. We had one store that sold our lighting products, another store that sold hammocks and hammock accessories and another store that sold Adirondack chairs.
Very niche, narrow and focused stores.
We built that business up for about a year before selling it a few years ago. I was in charge of optimization, which involved converting people once they got on the site.
I experienced cart abandonment myself. You set up some reporting and analytics to see where people are dropping.
That’s the whole game: how to get the best ROI for your marketing spend.
You look at traffic, ads, how much you’re spending and how many people reach the product page. Then you look at how many people put the product into their cart, how many people go to the checkout page and how many people finish.
At each step in the funnel, you try to optimize.
Cart abandonment is something that everybody experiences. It’s a normal part of modern, online habits. People look at things and put them into carts. They intend to buy them, they forget, they don’t intend to or they just want to see shipping costs. It’s just part of the reality.
Recent results from the two most-respected studies that the Baynard Institute completes each year show that somewhere between 68% and 72% of carts are abandoned.
That represents both a gigantic problem and an opportunity at the same time.
People who add a product to the cart are the most important people because they have looked at your product page. They’ve said to themselves:
“I am interested enough in this to go one step further into the funnel,” which separates them out from the other people that don’t do so.
From there, it’s a game of figuring out how to optimize to get the most number of people that put a product into their cart to convert.
That’s what optimization is. That’s what trust symbols are for. That’s what unique selling propositions are for.
Using the right colors and removing the navigation are examples of things that people are aiming at to improve their conversion rates. It’s a huge problem that every single retailer deals with.
If you improve your conversion rate, it makes you more profitable. It allows you to spend more money on advertising and marketing, which allows you to grow.
That’s the cycle you want to get into.
How much revenue eCommerce companies lose because of cart abandonment?
If 2/3 of your carts are abandoned, that means for every $1,000 of revenue that you make, you have another $2,000 of revenue being abandoned on your site.
Your goal is two-fold. There are two parts to the goal of optimizing your abandoned carts.
The first is reducing your cart abandonment. That means getting more people that add something to their cart to end up as paying customers. That’s handled by optimizing your checkout process.
The truth is, it starts by giving the right information needed to make a buying decision on your product page. Then it leads into your shopping cart page. Then it leads into your checkout page with the way you ask for credit cards and whether you require someone to create an account or not.
All of these different things lead into the first category of the solution, which is reducing cart abandonment. That’s what everyone is engaged in when they optimize their ecommerce store.
Then there’s the second part of it. The second part stems from the reality that no matter how much you optimize your site, and no matter how tight and perfect your checkout process is, you’re still going to have a ton of abandonment.
It’s just the nature of it.
Whether it’s someone putting a product into their cart just to look at. Whether it’s someone checking to see what the full cost would be, including shipping. Whether it’s someone that intended to buy right now, but their boss walked passed them and they closed the window.
Any of these things can contribute to the fact that you will always have some cart abandonment.
That’s why we built our CartHook tool. You should be optimizing your site as much as possible to reduce cart abandonment. Then for the cart abandonment that you still have, you should have something in place that tries to recover those abandoned carts.
Tell us more about CartHook? How do you solve the cart abandonment problem for eCommerce?
We identify the people who are most likely to turn into paying customers. Those people are the ones that have put a product into the cart and entered in their email on the checkout page. They’re literally in the process of filling out the forms on the checkout page in order buy. However, they don’t actually end up buying.
Our tool sits on the checkout page and captures an email address as soon as it is typed in.
Once we do that, we watch to see if they’re going to be a normal checkout. If they are a normal checkout, then we do nothing.
If they’ve gone so far as to put the product into the cart and fill out their email on the checkout page, but then they don’t end up buying, we trigger a three-part email campaign that’s designed to bring them back to the store to finish the purchase.
That’s what the tool does. Our normal best practices are that the first email gets sent out one hour after abandonment. The next gets sent out 24 hours after abandonment, and the third gets sent out five days after abandonment.
These emails are a combination of a reminder and a customer opportunity.
We don’t look at these emails as a hard sell. We assume this person intended to check out because they’ve gone very deep into the process.
Either something went wrong, they simply forgot, or they left the window open. For some reason, they didn’t end up purchasing.
Our approach to the emails is, “How can we help? Do you have any questions that you need answered? Here’s our phone number. You can reply directly to this email.”
It’s a customer service opportunity. That’s the approach that we recommend people take.
It’s not a hard sell or discount approach. It’s more of a customer service oriented approach.
So how do you integrate CartHook with an eCommerce store? Do you simply put a piece of code a page?
It exists on the shopping cart page, which is where we pick up the data for the products that are in the cart. This includes the quantity, the price and the image.
It also sits on the checkout page, which is where we capture their email address from as they’re typing it.
The last place it exists is on the confirmation page that people reach when they complete their order. It’s the page that tells us if this person completed their order or not.
That’s how the technology side of it works.
So could it be easily integrated by a non-tech person? Is there are plugin for that?
Normally, it’s either a plugin like WooCommerce or an extension for Magento.
It could also be a copy and paste of our java script onto the backend of the site, like Volusion.
In the case of Recharge apps, I believe the integration will be as simple as creating a CartHook account, copying your CartHook ID, going to your recharge app store, going to the CartHook app, pasting your CartHook ID and hitting save.
For something like recharge apps, it will basically be no work at all. Once you create a CartHook account, a CartHook ID is created for you. Then you copy and paste that into a field and hit save.
With which eCommerce platforms do you currently have integration with?
We have a decent number.
We have Shopify, Magento, WooCommerce, Volusion, FoxyCart, and 3dcart and Cratejoy.
Very soon, we will have Recharge apps as well.
We also have our own API that anyone can use for a custom integration.
How many of the abandoned cards can you save? How much this means in revenue for eCommerce stores?
What we were talking about was how the tech works, and then a three-part email campaign gets sent.
That results in 10-20% of those abandoned carts being recovered. We have people that recover as high as 30% and some that are lower than 10%.
A lot of it depends on the price point and the demographic of the store’s products.
We have some customers that sell $10-$20 products. It’s a lot easier to convince someone to come back and buy $10 products, so their recovery rates are the 30 percent and up.
We have some people that sell jewelry. Their products are $1,000, and the recoveries happen less often.
What we aim for is a 10:1 ROI. We always want people to make more than 10 times the amount that they’re paying us. If someone is paying is $99 a month, we want them to make at least $1,000 in recovered revenue. If someone is paying us $500 a month, we want them to make at least $5,000 in recovered revenue.
For Recharge apps, it will be more than 10:1 because we’re going to charge a nominal monthly fee. Something like $19 a month. Then 6% of recovered revenue. If it’s 6%, which is less than 10 percent, people will be making more than 10 times their money. They’ll only be paying us 6% of recovered revenue.
So how do you think CartHook differs when used by eCommerce companies using the subscription model?
The people on subscription end up doing a lot better.
We are looking at the recovered revenue that we bring people once. We’re charging them based on that, and we’re trying to get the ROI to 10:1 based on that.
But they’re not making money just that first month. They’re obviously going for the revenue that’s captured in the lifetime value of the customer.
It’s very similar situation. It’s just that the calculations work better when you have a recurring element.
For the same reason, it might be viewed slightly differently. We’re charging a percentage, the 6% of recovered revenue, so people on a recurring basis will do a lot better because we’re not going to be taking into account the lifetime value of the customer and charging 6% of that. We’re only going to be counting 6% of the first month of the relationship. Their ROI will be a lot better than a normal store that sells one-off products.
Can you tell us more about your plans and pricing options?
Our normal plans are based on the total number of orders that a site does.
We use that as a metric because the more orders you get, the most abandoned carts you have. The more abandoned carts you have, the more emails and interactions we will be doing on your behalf. Therefore, the more value you get for the product. We try to connect it to that.
With Recharge apps specifically, we want to partner with them and give a special deal to recharge app merchants. We’ve done that just a handful of times with different companies. Our normal pricing is a monthly flat fee based on number of orders.
So how does the pricing differ for Recharge apps customers?
For Recharge apps, it will be $19 a month plus 6 percent of recovered revenue.
How important do you think it is for subscription eCommerce businesses to deal with cart abandonment?
We think that the combination of ecommerce with subscription is a very exciting space to be.
We see Recharge apps as the leader in recurring billing, along with Shopify, which we see as the leading ecommerce platform for our market.
That’s just a great place for us to be. It’s a partnership with the combination of the best platform with the best offering for that platform that involves recurring billing.
When people use our products, they’re happy with the ROI and the results. We think people who have a recurring element to their business will be even happier with the results they get from us.
Can you give us your best tips when it comes to dealing with cart abandonment?
Sure. I’ll rattle off a few that come to mind. The first is that the approach is customer service oriented, which involves answering questions and being helpful. It is not discounting and pressure and salesy. That’s important.
Secondly, the timing of the emails is hugely important.
The first email going out one hour after abandonment is the most effective email. We call it the magic hour.
Here’s the reason for that.
If you think about the way you shop online or the way you live online in general, you probably have a lot of tabs open. Most people do. There’s one tab that everyone always goes back to, and that’s your email inbox. This is why it’s so valuable for marketers to be in the inbox. That’s where everyone goes, no matter what.
You don’t forget to go visit your inbox. When you get this type of cart abandonment email in the inbox within an hour, the most likely situation is that the person still has the window on their machine at that time. That’s obviously the best time. They just abandoned, they just changed their mind, forgot or got distracted. Coming into the inbox right then, within an hour, is the most important. The timing of email one being one hour is important.
The timing of email two is interesting and funny, I guess. The reason we send it out exactly 24 hours later is because people are creatures of habit. They usually are doing the same thing at the same time of day, every day.
If I think about my wife, she’s very busy. We have two kids, and she runs around making sure they’re taken care of and making sure things are all set on the personal front.
When she goes online to shop, it’s at the same time every night. It’s once the kids are asleep. It’s on the couch at right around 8 or 8:30 p.m. That’s a great time to get her attention.
If she abandons a cart around that time, and then she receives an email the next day when she’s again on the couch at 8:30 p.m., she’s not out in the middle of her life. She’s at the same place at the same time of day.
The third email is sent five days later. The timing of that one is a little less important. Whether it’s three days or five days, it’s really one last shot of being helpful, providing information and getting the person to come back.
Another best practice is to send the email from a person. Don’t make the sender name the name of your company or sales@yourcompanyname. You want to send it from a person because that gets a much better open rate than sending from a company. Open rates obviously give you the opportunity for more people to see the email, so better open rates equals better results.
Another best practice is to make sure that you include the cart contents in the email. You don’t want to send an email just saying, “Hey, you left something behind,” and have no context. You want the product image, the price and the quantity right there in the email.
Do you think dealing with cart abandonment is important for small to medium size stores as well? Or should it be priority only for big players?
We see things staying pretty consistent in terms of the return, the ROI and the percentage of recovered carts. Yes, more volume leads to more revenue, but it leads to a very similar percentage of revenue.
That leads me to think that, even if you’re making $5,000 a month, you should still have a solution in place. If it gives you a 5% or 7% bump in your revenue, it’s still hugely important. The same way as if you’re making $100,000 a month or $1 million a month. It still makes a difference.
It goes right to your bottom line. You’re already spending the money on advertising. You’re already spending the money on salaries, on you platform, on your site and on all of these other services that you’re doing. Any additional revenue that you can create when you’re already spending all of that money just helps. Maybe it’s only a 5% bump in revenue overall, but it makes a big difference because you’ve already spent all the money to get people to your site. When you’re able to make more money from the people that are already coming to your site, you get a lot of benefit.
One final question: tell us why people should try CartHook
I used to run an ecommerce business myself.
I think everyone needs to have a solution in place. It doesn’t need to be CartHook, but to ignore cart abandonment entirely and not have anything in place is just a lost opportunity.
No matter how well you optimize, that’s the priority. Take care of your optimization first thing. Minimize your cart abandonment. Then admit the fact that you will still have some abandonment, and so you should have a solution in place.
Regardless of which solution makes sense for your situation, have something in place. Otherwise, you’re just leaving money on the table.
I think it would be good to focus on the fact that CartHook has a 30-day free trial.
It’s kind of one of these things where, if it’s that easy to integrate, it’s worth a shot.
Why not? If it can help bump your revenue, you get to see what it looks like for 30 days and say, “Yes, this works for me. I’ll keep doing it,” or, “No, this doesn’t work for me. I’ll stop.”
But it’s worth a shot. It’s a low-hanging fruit of something that could make your store more money.