Why Should I Buy From You? Part 1 – The Battle for Customers Online

Why Should I Buy From You? Part 1 – The Battle for Customers Online

Online marketing has given businesses large and small all over the world the ability to compete on a level playing field. But although your online store has the potential to reach more potential customers than you could ever dream of, converting them into sales is often overlooked in this constant push for a high Google position and a strong link campaign.

Too many online marketing campaigns focus on achieving high levels of traffic. But if that traffic doesn’t produce a corresponding increase in sales, the return on your investment suffers.

Same Old, Same Old

The downside to the spread of online shopping is that your business is most likely competing with hundreds, if not thousands, of other businesses offering similar products. You sell gift baskets? There are plenty available. An online bookseller? You’re probably lost in the crowd. Health food supplements? You could choke a rhino with the number of vitamin pills available.

So if you are most likely selling the same products, or similar, as many other websites out there, what makes you think people will choose to buy from you instead of your competition?

Stand Out From the Crowd

Most businesses tackle this problem with search engine optimisation (SEO). If you are listed higher in Google than your competition, the traffic will most probably flow to you first, giving you the best chance to close a sale. But focusing on SEO is only half of the problem.

Let’s have a look at online buyer behaviour.

Most importantly, online shoppers don’t buy from the first website they visit. Online shopping has made the concept of shopping around as easy as a few mouse clicks, so most customers will check a handful of sites before deciding on a purchase. In fact, this means that your site may actually perform better if it sits at number 3 or 4 in the Google rankings. If a customer is looking at the third or fourth website and sees no real difference in the offer, rather than return to the first site to buy, they will most likely purchase from the site they are on.

So what are the factors that most likely convince a customer to hit your big red “Buy It Now” button?

Aegis Group’s Synovate recently did a survey for Guidance and came up with some surprising and not so surprising results.

 

Asked to rank various factors, the survey group unsurprisingly selected price as the number one decider. What becomes more interesting is when you consider the second most popular – free shipping.

 

Between them, price and free shipping make up easily the majority of the chart, with promotions, coupons and checkout procedures only receiving a very small percentage of the vote.

Why You Shouldn’t Focus on Price!

Of course, price and free shipping amount to pretty much the same thing for the customer. They want to buy the product for cheaper than they can get it down the road and they don’t want shipping costs to impact on this bargain. It also destroys the myth that customers are willing to pay shipping for the convenience of home shopping. The truth is more likely that people are quite happy to shop at their local mall if your online store can’t beat the price, shipping included.

The ramifications of this means that online businesses are competing with shrinking margins to produce the best price on commonly available products. But as online prices battle out on the profit margins, prices are going to naturally gravitate closer together. This means that once you have a strong price point, you are going to need to offer still more in order to convince your customer to choose you over the next guy in the Google listings.

This leads us onto the topic of Value Propositions – why buying from you is more valuable to the customer than buying from your competition, even if the price is the same. This is the topic of my next post.

Comments

  1. Very enlightening article. I would have never dreamed that free shipping was such a large factor in online shopping. Watching Ebay gave me the wrong idea about this, with all the gouging that goes on there thru shipping.

  2. Thanks for your comments, Mark. You’re dead right that the ebay experience has coloured many people’s view of online selling, but ebay selling has unique factors that can’t be used to determine general buying behaviour.

  3. citybazaars says

    I am totally agreed with you about the fact that you have mentioned that people will buy online only if the price is attractive or cheaper than that of at the shopping mall. I am also agreed with you about shipping charges. No matter there are some additional cost involved in shipping products to buyers door step, but I think it can be absorbed by the online seller as they do not have to pay for shop rent and many other fixed costs. Your finding about moving from one shop to another before buying products online is very true. I guess it is our natural habit. What do you think about TRUST? A buyer would buy online only if he or she could trust your site, product and services. So, how do we build trust among our online buyers? Do have some suggestions or findings regarding this. Will appreciate if you could post yor wise openion.
    Thanks
    citybazaars.com

  4. I would have never dreamed that free shipping was such a large factor in online shopping. Watching Ebay or amazon gave me the wrong idea about this, with all the gouging that goes on there thru shipping.
    Your finding about moving from one shop to another before buying products online is very true. I guess it is our natural habit.

  5. Thanks for posting and sharing this conscise, insightful and very useful article – discovering this blog just now has only confirmed for me that I made a great choice when I signed up with Net Registry.
    Further to citibazaars.com’s comment, I also thought trust would be a factor, because it is for me.
    Cheers.

  6. You’re extremely welcome Jen.
    You are right in saying that trust is important, and can be the deciding factor between two similarly priced sites. Having appropriately secure checkout processes, money back guarantees and testimonials from happy customers can certainly help a potential customer trust your offer more than the competition. Yet price will always have an influence if there is a notable difference. How much is a customer willing to risk trust in order to nab an item at 25% cheaper? If eBay has taught us anything, it’s that customers are willing to risk a lot for a bargain.