Ecommerce Customer Experience: Mastering Acquisition and Retention

Have you been feeling anxious lately? You’re not alone. 

We are at the dawn of a new industrial age called the experience economy, which is rapidly forcing ecommerce businesses to transform how they think and act. Not just because customers are seeking to buy experiences over tangible “stuff” today, but because it’s a matter of survival.

According to a Walker study, “By 2020, customer experience will overtake price and product as the key brand differentiator.”

To help you compete in the future, here are the ecommerce customer experience tools you need to master the art and science of acquisition and retention.

What Is Ecommerce Customer Experience?

Ecommerce customer experience is a customer's interactions with a brand while online shopping. This includes the ease of website navigation, functionality of product search, simplicity of checkout, quality of customer service, and post-purchase follow-up.

Today, these events happen primarily online — through on-site, multi-channel and omni-channel buying experiences. However, they also apply to post-purchase experiences both online and offline, including:

• Customer retention campaigns
• Unboxing experiences
• Customer support
• Pop-up shops and live retail events
• Product experiences themselves

For example, Apple is a master of staging memorable online and offline customer experiences via highly publicized and anticipated new product announcements and launches, beautiful retail store designs (think the Apple Cube in NYC), helpful online and in-store customer support delivered via “geniuses,” and the simple and intuitive user experiences of its software and technology products.

Ecommerce is at the forefront of the new experience economy where memorable events become the product. Why? Because ecommerce is an agile medium that makes it easy to create better buying experiences (“the art of customer experience”) and quickly get measurable customer results (“the science of customer experience”).

That’s why we are seeing a proliferation of analytics, testing and personalization technologies to help merchants influence people’s emotions about their brand. But emotions are very personal and are highly influenced by many factors that change over time.

In other words, emotions are uncertain.

Unfortunately, merchants have been misled to believe that there is certainty in how a customer emotionally experiences their brand. Traditional tests promote statistical significance, and personalization technologies boast artificial intelligence algorithms as a way to accurately predict future customer behavior. However, these practices belong to the old product and service economies — a static world that no longer exists.

By relying on certainty as a way of designing ecommerce customer experiences, merchants are missing out on the opportunity to deliver memorable customer experiences. In the process, they’re leaving hundreds of millions of dollars in potential new revenue on the table.

To illustrate the uncertainty of emotions, let’s compare a stand-up comedian with traditional ecommerce testing solutions.

To know if their routine is funny or not, a comedian must test their jokes in front of live audiences. Sometimes a joke or two bombs, while other times the entire set slays. There are many reasons why. What might be funny to one group of people is offensive to another. That’s why comedians need to read the room and change things up on the fly.

Comedic timing and storytelling are also important factors. Political and cultural perspectives change over time. Jokes get stale. Comedians must constantly evolve and adapt their routines to keep their audience’s attention.

The same is true for ecommerce testing solutions. Even if they perform well today, the customer’s path to purchase is highly fragmented and dynamic. You can no longer rely on a traditional sales funnel to drive sales.

As KPMG puts it, “Instead of a path to purchase that is traditionally linear, it has become more of a cycle or even a web. Consumers move through and back and forth between the stages, influenced by a myriad of both offline and online factors at every stage.”

 As a result, relying on statistically significant data about how your customers behaved on your website yesterday will have little impact on what they will do tomorrow. 

Likewise, your ecommerce site visitor reactions are irrational and will change over time. You can’t apply a static solution to a dynamic problem.

Pre-Purchase Ecommerce Customer Experience: Acquisition

Now that I’ve explained the art of understanding human emotions and how they affect the path to purchase, let me illustrate via a few case studies, the science of customer acquisition and retention. It involves adapting to those irrational behaviors on your ecommerce site in real-time.

Case Study I: Relying on Past “Winners” Can Cost You Millions

The first is an ecommerce arm of a major media organization that selected HiConversion to test the impact of different free shipping offers with four different thresholds:

• Free shipping on all purchases
• Free shipping on orders over $50
• Free shipping on orders over $75
• Free shipping on orders over $100

The expectation was that free shipping on all purchases would generate the highest revenue lift. As the minimum thresholds rose, it would logically follow that the merchant’s revenue would decrease. However, this assumption proved false.

Week 1 Results: Visitor Behaviors Were Irrational

What was surprising about the statistically valid results our platform revealed in the first week of testing was that the over $50 threshold was the “winner” after reaching confidence in just a few days. It produced an initial revenue lift of +9.79%.

Week 2 Results: Visitor Reactions Changed Over Time

During the second week of optimization, however, the revenue lift numbers shifted. The positive performers were now “losers.” Surprisingly, the first experiment’s “winner” switched from generating +33% positive revenue to -11.41%.

Had the company relied on the “winning” results of the first test to drive its ongoing free shipping offers, it would have missed out on potential new revenue. 

Mistakes like these have the potential to cost ecommerce companies hundreds of millions of dollars in the long run. Therefore, merchants must adapt to visitor preferences in real-time to safeguard against ever-shifting consumer behavior, ensuring the consistent growth of potential revenue from ecommerce.

Case Study II: When Multivariate Testing Doesn’t Work

After achieving inconsistent results from traditional multivariate testing, a fast-growing online pet retailer selected HiConversion to test several variable elements in its product detail page optimization campaign including:

• Main Navigation: Which options should be presented in the dropdown menu?
• Ordering: How much descriptive information is needed during product selection?
• Recommendations: How effective are up-sell product recommendations?
• Search: What is the best way of using product search options?
• Breadcrumbs: Are there better applications for this space, such as trust badges?
• Layout: Are there better locations for the product image?

The pet merchant’s optimization goal was to improve revenue per visitor (RPV). To demonstrate the adaptive capabilities of the HiConversion platform, we asked them to continue to run the multitude of their existing marketing campaigns without telling us about what and when they were running.

As shown in the pet merchant’s new ecommerce revenue report below, the adaptive algorithm was able to correctly detect changes in visitor behavior and generate significant revenue lift in real-time. The optimization campaign reached confidence in just days, producing an overall revenue lift of +9.79%.

The actionable analytics provided by our platform gave insight into visitors’ reactions to the individual elements included in the optimization campaign. For example, a comparison between two time intervals indicated that repositioning the recommendation box (circled in green below) to another location was producing consistently good outcomes and should remain an integral part of the page template.

On the other hand, product ordering options (circled in red below) produced inconsistent results that required further analysis.

After analyzing the results, the online pet retailer decided to expand its use of our platform to full-funnel optimization and to apply visitor segmentation based on the new data gathered from the initial campaign.

Post-Purchase Ecommerce Experience: Retention

So far, we’ve discussed how to optimize and adapt to on-site behaviors to win new customers in real-time. Now, I’d like to demonstrate how investing in post-purchase ecommerce customer retention experiences can significantly boost your bottom line.

According to a recent study conducted by Sailthru and Forbes Insights, retailers and publishers that increased their spending on retention “had a near 200% higher likelihood of increasing their market share in the last year over those spending more on acquisition.”

It’s not surprising when you consider that, as Retail Touchpoints explains,

The probability of converting a new customer falls in the 5% to 20% range; for existing customers, it’s between 60% and 70%.

That’s why it’s so important to encourage customers to create an account on your ecommerce site and to continuously adapt to their on-site behaviors.

Let’s take a look at some real-world examples from HiConversion customers, plus some additional ideas that have worked well for Shopify Plus customers in the past.

1. Personalize Post-Purchase Transactions

It’s no secret that acquiring a customer’s email address is paramount to building an ongoing relationship and encouraging repeat purchases. But first-time customers may be hesitant to give you their email address because they know they’ll be receiving promotions from you going forward.

Most merchants offer a discount or coupon to encourage email sign-ups. HiConversion recently designed an experiment to verify if there is another way to generate similar results to offering a coupon or discount — without providing monetary incentives.

The control group of visitors was presented with the $25 coupon...

Other site visitors were presented with value statements and a cleaner form design. To the surprise of the merchant, the second treatment without the incentive achieved a +7.2% lift in conversions.

Once you’ve converted a customer into a first-time or repeat buyer, there are additional ways to enhance their post-purchase experience by adding a personal touch in thank you pages and confirmation emails.

Below are some ideas to spark your imagination.

Step 1: Thank You Page

Immediately after a customer completes their checkout, do they see a page like this?

While the “Thank you for your purchase!” language is ok, it may not reflect your brand or encourage what you’d like your new customer to do next.

You can solve this problem by navigating to the “Languages” section of your Plus theme and clicking on the default language, then go to the “Checkout & System” tab, and finally to the “Checkout thank you” section.

These very simple edits allow you to turn your default stock text into a branded experience that carries the momentum from purchase into the next step.

There’s also a whole section in the Shopify manual that shows you how you can further customize the thank you page, giving you the ability to insert valid html, scripts, liquid objects, and more within certain sections of the page. (Note: These alterations are not supported by Shopify Gurus, and you will need to monitor for updates made to the cart.)

At a very basic level, you can do things like add videos or “recommended products” to the thank you area, and continue to build on your branded experience.

I highly recommend you check out the Shopify Manual to see what’s possible. Note that the “Happy Ending” app makes customizing this page pretty easy.

Step 2: Order Confirmation Email

Next, your new customer is going to receive an order confirmation email.

Often, people just read the email headline and don’t even bother opening these emails unless their order is late.

But if you want to improve a first-time customer’s experience, you’ll need to keep them excited and confident about their purchase. Extinguish the possibility that they’ll have buyer’s remorse by further engaging them, and making them a part of your brand.

Email marketing app Emma demonstrates just one way this can be done, by sending a beautifully designed email along with a special offer for first-time customers.

Tucker Schreiber wrote on the Shopify ecommerce blog about 5 different email receipt marketing tactics that are worth exploring and shares some very compelling research as to why you should not be overlooking this area of your marketing.

These include:

• Upsells
• Discount codes
• Promote social media accounts
• Collecting qualitative feedback
• Have customers share their purchase on social media

Even if all you’re doing in the order confirmation email is introducing your new buyer to your brand’s sense of humor and qualities, it can go a long way to getting people in the habit of opening your next message.

The screenshot below is from a luxury shoe company called Fluevog. While it doesn’t offer anything direct like upsells or discounts, it does give you a glimpse of the brand’s humor.

(Read: Your shoes are being picked and packed by Elves. And even though it’ll take two weeks for you to get your order, that’s kind of a short time when you “think of it in terms of the history of the universe”)

What’s important to note about order confirmation emails is that you are training your new customers to open or ignore your future emails.

Step 3: Shipping Confirmation Email

It can be exhilarating to look at your inbox and see the message “Your order has shipped!”

It’s especially exciting if you ordered something that means a lot to you personally. Maybe you just got a new promotion and you can finally afford those designer shoes that you’ve had your eye on for a long time.

Give your customers a reason to continue to be excited about their purchase and looking forward to receiving it in the mail.

In Jimmy Daly’s “How to Send a Great Shipping Confirmation Email” he shares a couple of best practices for shipping emails:

• Lead with the good stuff (Your order’s been shipped!)
• Make it easy for your customer to track their order by linking to the tracking site
• Include expected delivery date
• Offer a coupon, flash sale, or some other call to action like refer a friend
• Alleviate anxiety by reminding them of customer service & return policies

This is also another great place to showcase your brand’s personality.

Going back to the Fluevog example from earlier, their shipping confirmation email tells a story about how the Fluevogian Elves found your products and sent it along to other interesting characters within the company, and the steps their package has taken just to get to their door.

There are an infinite number of things you can do with the shipping confirmation email. Just remember to keep customers excited that their order is on the way.

Step 4: Follow-Up Email

Following up with a customer after they receive their order, and encouraging them to take another action will get them reinvested in your brand.

Rejoiner wrote about this concept in a very convincing article entitled “How Warby Parker Delivers Magical Moments Over Email”.

The best email examples are those that acknowledge that the item is at your house and in your hands.

The beauty of acknowledging that your customer has received your product is that you can also encourage them to take another action.

For example, you can prompt them to “Take a Photo & Share on Instagram” which has a highly influential word of mouth impact. For more ideas on this topic, read: Instagram Influencer Marketing: Three Steps to Unleash the Power of Social Celebrities in Ecommerce.

2. Adapt to On-Site Behavior

As we discussed in the first half of this post, customer behaviors change over time. So, it’s important to continuously adapt to their recent purchase behaviors and offer new experiences to incent them to buy again.

Thanks to HiConversion’s adaptive optimization technology, we were able to demonstrate the value of real-time, personalized offers and messaging for one of our clients.

We wanted to verify whether a customer would be more likely to convert when presented with a generic discount offer, versus a personalized message and offer.

The control group saw a 15% off banner…

Other visitors were presented with a personalized message and offer that was generated in real-time based on previous purchases. The results verified that personalized, individual offers generated a +13.97% lift in conversions.

The lesson is that real-time, adaptive optimization will ensure that your customers receive a personalized experience that is more desirable than a static, one-size-fits-all treatment.

While HiConversion currently focuses on on-site behaviors, below are some additional post-purchase experience tips that have worked for Plus merchants and our ecommerce customers in the past.

3. Design Memorable Unboxing Experiences

No matter what you order online these days, it seems like it almost always comes in the same white or brown package. It cheapens the experience and destroys the illusion when it matters most.

A customer’s brand and merchandising perception online often looks like this...

But it usually arrives on a customer’s doorstep like this...

Richard Lazazzera wrote two articles you must read if you don’t want your customers to feel disappointed after receiving their mediocre package in the mail:

• Creating a Memorable and Shareable Unboxing Experience
• 5 Ways To Use Packaging Inserts to Increase Customer Loyalty and Revenue

Now, if you’re thinking to yourself, “Yeah, but custom packaging is too expensive” I want you to consider that there are over 72 million unboxing results on Youtube.

That’s a lot of videos, and there’s a possibility that some of your customers like to shoot unboxing experiences, which of course, equates to free promotion for you.

And, there are over 124 Million results in Google for the search term “Unboxing.”

According to this article on CNN, an unboxing video of chocolate eggs containing a small toy received over 35 million views in just 2 years time, meaning there is potential for a massive exposure, which brings to me to my next point…

There are likely people with reach, in your market, who make these videos.

Given the nature of the content, you can treat unboxers as a marketing channel.

There are over 2 million channels that have “unboxing” either in their channel’s title, or channel description, and that doesn’t even necessarily account for YouTubers who are dedicated to product reviews, tutorials, or recommendations.

So, if you’re saying “Custom packaging & inserts are expensive,” consider these as marketing and opportunity costs that can both reduce your overall cost per customer acquisition and work as a marketing distribution channel.

Your customers don’t live in a vacuum. Unboxing plays such a big role in word-of-mouth referrals, that it’s a strategy in which you should consider investing.

4. Stage In-Person Events

Even if you don’t have a physical store, there is nothing stopping you from creating opportunities to get to know your customers in-person.

As this post on the Shopify Plus blog implies, pop-up shops are the future of physical retail — especially with the rapid closing of so many retail storefronts over the past few years. So, why not invite existing customers to attend your next event?

The pop-up shop segment is “valued at $50 billion in the U.S.” alone. Not only are you able to generate a short-term sales spike from this new customer experience platform; it’s also an excellent opportunity to create memorable and shareable (via social media) brand experiences and enable customers to provide product feedback, plus touch and feel your merchandise and learn about new products.

For ideas on how to stage an exceptional pop-up shop customer experience, check out this Shopify Plus case study: How Rhone Apparel Uses Pop-up Stores to Create 3D Customer Experiences & Grow 500%.

Final Thoughts on the Ecommerce Customer Experience

It’s time to break the cycle of seeking certainty in traditional test results. As the case studies and examples above illustrate, visitor behavior is always changing. Static solutions will not help you win in the new experience economy.

You must constantly balance the art and science of customer acquisition and retention. The only sustainable solution is in the ability to detect and adapt automatically to changes in real-time.

To drive memorable ecommerce customer experiences and sustainable revenue growth, merchants must go beyond cumulative results and statistical significance when analyzing test results and continually optimize customer experiences in real-time.

HiConversion’s adaptive optimization platform enables merchants to drive sustainable results along visitors’ path-to-purchase through its ability to deliver the right buying experiences to the right audience at the right time. Don’t just take my word for it that real-time revenue lift can be achieved by continually optimizing your customer’s path to purchase.

As a Shopify Plus merchant, you can experience HiConversion’s real-time testing and personalization ecommerce solution by using our free Path-to-Purchase Health Check. It is easy to implement via your Shopify Plus admin.

About the Author

Zee Aganovic is CEO of HiConversion, an enterprise software company offering the first adaptive, real-time testing and optimization solution for ecommerce. A serial technology entrepreneur, Zee thrives on solving onerous, real-life problems through innovative technology to help global brands transform their digital business.

F50 companies, including Microsoft and Ricoh, have taken note and acquired two of his companies: Apptimum and Cylex (both first-generation Application Service Providers). Zee co-invented one of the world’s first ASP-specific patents and holds both a master and doctoral degree in optimization theory from Rutgers University.