Oct 05, 2023
Customer journey optimized for e-commerce
The e-commerce customer journey is a process involving stages from awareness to loyalty. Creating a journey map helps businesses understand customer interactions and improve their experience.
1. What is the e-commerce customer journey?
2. What is an E-commerce customer journey map
3. How to map customer journeys
4. How E-commerce can improve their makerting with Customer Journey
The e-commerce customer journey is like a story that starts when someone first learns about a brand and continues all the way to them buying something on the brand's online store and interacting further. Imagine someone spots your brand because of some online ad or post. They then explore your website, pick some items they like and put them in their shopping cart, and finally, buy them. After this, they might love what they bought so much that they buy more stuff, talk about your brand on social media, or even tell their friends about it. Each part of this story comes one after the other, and what happens in one part can change what happens next. This whole story is like a journey they go on with your brand. So, to make sure they reach the end of this journey and love every part of it, you need to make every part as good as possible.
Typically, the ecommerce customer journey is divided into the following five stages. This division helps in better understanding the interconnected customer journey. The key is to think from the customer's perspective at each stage and understand their touch points:
- Conversion (or Acquisition)
- Loyalty (or Advocacy)
What are touch points? Touch points are the elements where customers interact with your business. They can be advertising materials or even the login button on your brand's website. Each of these elements influences whether the customer will continue further along the ecommerce customer journey or stop and leave. Naturally, different stages of the journey have different touch points.
To understand each stage better, let's use the example of a leather wallet brand.
"I discovered a site selling durable leather wallets!"
At this stage, the customer first becomes aware of your brand. They might have entered your site through advertising, learned about your brand through a friend's introduction, or found your brand through direct searching. In this phase, you can discern what new customers are looking for and how they arrive at your site.
touch points: Social media ads, Referrals from existing customers, etc.
"This brand sells leather wallets that would go well with the clothes I frequently wear to work. I need to take a closer look."
In this phase, the customer meticulously browses your online store. They will explore whether your product can solve their needs or not. They might add products to a wishlist or shopping cart. Practically, the customer experience from the moment of site entry up to just before purchasing falls under this phase. Enhancing the customer experience in this phase can directly boost conversion rates.
You need to monitor the bounce rate of your online store's landing page during this stage. Even if a customer becomes interested in your brand during the Awareness stage and accesses the main page, they might terminate their navigation without moving on to other pages (especially product pages) if the information provided doesn't captivate them. Hence, it's essential to analyze and improve the touch points' effects from this phase onwards.
touch points: Product thumbnails, brand introduction text, detailed product information, social proof, etc.
Conversion or Acquisition
"This product is perfect for me. I will buy it."
At this stage, the customer decides to make a purchase and finalizes it on your online store. This moment is crucial not just from a revenue conversion standpoint but also as the beginning of a long-term relationship with the customer. If your online store doesn't provide enough information for the customer to decide on a purchase, they might contact customer service. Such touch points can significantly influence their decision to buy.
touch points: Payment process, customer service, post-purchase surveys, etc.
"I need a leather belt in addition to the leather wallet. I should buy it from the brand where I got the wallet."
The e-commerce customer journey doesn't end with a single purchase. Repurchasing is an essential element for brand success. The most crucial factor for this is the customer's satisfaction with their first purchase. If they are dissatisfied with their initial purchase, the likelihood they will repurchase decreases. Satisfaction from the first purchase includes satisfaction with the product, delivery, response, and the service provided during returns or exchanges.
It's easier to prompt a returning customer to make another purchase than to acquire a new one. However, you need appropriate touch points for existing customers, which can be more personalized than those for new customers.
touch points: Email, SMS, retargeting ads, etc.
Customers who repurchase typically exhibit loyalty to the brand. Their loyalty can be discerned through repeated purchases, self-promotion of the brand, or participation in brand events. Research suggests that around 20% of loyal customers can account for more than 40% of total sales. At this stage, you can utilize emails or social media to foster a stronger relationship with customers.
The e-commerce customer journey map is like a roadmap that shows how a customer moves through your online store, pinpointing every step and interaction spot, like we talked about earlier. Think of it as a guidebook, and for the customer to travel smoothly, you've got to make each of those interaction spots (or touch points) as friendly as possible. This map helps you see clearly where and when these interactions happen, making it easier to understand. Here's a quick rundown on how to make one of these journey maps for your online shop.
To create a customer journey map, you first need to understand who your customers are. To clearly understand the customer journey, you should use customer personas. To create a customer persona, answer the following questions. The customer persona should be specific and not vague.
What are the age, gender, location, occupation, income level, and interests of the customers buying from you?
What are the customer's pain points and goals?
Touch points represent every moment when a customer or potential customer interacts with your brand. Sellers should list all the ways a customer can interact with their brand. This list should include viewing social media advertisements, searching, receiving emails, leaving reviews, interacting with the customer support team, and being referred by existing customers. Identifying key touch points must always be approached from the customer's perspective.
For each stage of the customer journey, it's essential to understand the emotions that customers feel. This helps brands comprehend the emotional impact of the customer experience. Emotions influence every decision made by a customer. They manifest as primary outcomes of customer experiences throughout the journey, like purchasing, repurchasing, and loyalty. Negative emotions can help identify pain points and guide improvements. To grasp the emotions customers feel at each stage, both quantitative and qualitative research are necessary. Surveys, interviews, and social media data should all be considered. Emotions can be represented on the customer journey map using colors, emoticons, and graphics.
Customers take various actions when interacting with touch points. These actions include searching for information or comparing options. Observable behavioral changes in users are direct results of improvements to services or products. To capture these behaviors, one must utilize various analytical tools. Tools like Google Analytics and Hotjar can provide detailed insights into user behaviors at each stage.
One of the significant driving factors for customers, on par with the emotions they feel, is the information they seek. When customers navigate your brand's online store, what information are they trying to find? What did your defined personas need to know that led them to visit your store? Strategically placing the right information within your online store to meet your customers' needs is pivotal. It's essential to recognize that the information a customer may seek can vary depending on the stage of their journey.
Upon understanding touch points, customer emotions, their actions, and the information they seek at each stage of the journey, you are positioned to pinpoint the issues that need addressing. With this comprehensive view, you can now formulate hypotheses about potential solutions.
By delineating these stages, businesses can create a roadmap that takes into account not only what the customer does but also how they feel and what information they might be seeking. This holistic approach ensures a more profound alignment with the customer's needs and expectations. It also paves the way for iterative improvements, where hypotheses based on insights can be tested, refined, and then implemented for a better overall customer experience.
While it's crucial to define your ideal customers and identify the best customer journey for your business, determining the concrete criteria for who your loyal customers are can be challenging. Ideally, if some of your customers are ordering products on a regular basis, such as once a month, and accumulating a high volume of historical orders, they can be considered your loyal customers. However, in the real world, the distribution of historical orders from existing customers might look like this:
This chart is based on actual data from one of our customer companies. Can you discern a clearly distinguishable criterion for a loyal customer? Unfortunately, this chart may represent the reality for most e-commerce brands. The typical e-commerce brand has a right-skewed distribution chart concerning their customers' historical order volume.
In this article, the methodology for segmenting customers to identify the most loyal has been thoroughly explained. To summarize briefly, defining your loyal customers based on their ordering patterns proves to be advantageous. This is underscored by the principle that a customer who visits your website daily for several weeks without placing an order may not be considered loyal, in contrast to a customer who visits once a week but consistently makes purchases each time.
There are two approaches to categorizing your existing customers: rule-based segmentation and the AI-based RFM model. The AI-based RFM model is beneficial in that it optimizes the impact of key variables. For example, while the customers of certain brands may exhibit identical repurchase cycles (such as with vitamins), there can be a substantial variation in the price range. In such instances, focusing on ordering frequency may not be the most appropriate strategy as it affects minors. AI segmentation automatically determines feature importance and groups your customers based on their ordering patterns.
Retentics provides this kind of AI segmentation but is more optimized for retail e-commerce brands. You can determine who your loyal customers are and identify their characteristics. For example, 'we have a group of customers who account for 12% of the population but generate 40% of the total revenue by ordering 7 times on average, with 3.3 items per order.’
The customer journey contains a lot of touch points that are not only what we could assess but also the things you never know as explained above. Let’s focus on the things we know. Below are examples of the funnels that you could assess.
- Engagement Channel: The user visit the website through across different channels.
- Product Browsing: The user browses through product pages or service offerings.
- Sign-up Moment: The user signs up.
- Shopping Cart: The user adds products to the cart.
- Checkout Process: The user initiates the checkout process.
- Transaction: The user makes a purchase.
- Post-Purchase Engagement: The user write reviews, or accept the offered discounts for the next purchase.
Understanding these interactions within a customer journey map can help a brand to:
- Identify and fix gaps or pain points in the customer journey.
- Optimize touchpoints for better user experience and conversions.
- Develop targeted marketing strategies for different customer segments and stages.
- Enhence customer retention and thus repeat purchases.
Remember that the specifics can vary based on your brand's unique offerings, target audience, and channels of operation. Tailoring the journey to your specific customer experiences is crucial for effectively utilizing the customer journey map.
You may not wish to maximize your newsletter subscribers without seeing an increase in revenue. Of course, you will not take any action if it has no impact. To prioritize your actions, you need to understand which ones have an impact and to what extent. However, creating hypotheses and analyzing their validity can be challenging, and it becomes even more so when you do not have concrete criteria to define the resultant behavior. Thus, we need to understand our loyal customers' journey, which leads to more orders and higher revenue.
At Retentics, you have access to all the analytics, such as item journey, cohort, and time spent from sign-in to first order, etc. Since we start with the result, all we need to do is discover the significant differences between the segments. For instance, if 85% of loyal customers took less than a day to place their first order, but only 21% of others did so, this is a great signal to dig into. Another example could be the first purchased item. If loyal customers most often purchased shoes for their first purchase, whereas others chose pants, you might need to examine the second purchase rate of those products when they are purchased first.
You can simply encourage new customers to follow the optimal customer journey. Encourage customers to place their first order on the same day they sign up, perhaps with a focus on shoes instead of pants, for example. To do this, you need to model your best customer journey map.
While it's always beneficial to acquire as many new customers as possible, this is always challenging when you have an unlimited marketing budget. Unfortunately, almost every e-commerce business has a limited marketing budget, so if this is a concern for you, it becomes crucial to prioritize acquisition channels and narrow down your target audience. Analyzing the differences in the acquired channel between segments can give you clues about where your loyal customers spend most of their time. If you collect some demographic information and conduct mosaic analysis, you can identify the ideal customer profile. Allocate more funds to acquire potential loyal customers, who will eventually provide you with a higher LTV, from the channels they primarily use.
Once you acquire new customers, you might want them to place an order right away. This doesn't necessarily mean you need to communicate directly with the customers at every touchpoint, but rather you need specific rules to encourage them. One example of such a rule might be waiting a certain amount of time for a new lead to make a purchase and offering a welcome coupon if they don’t buy anything within that period. A prime example is Uber Eats: if you add food to the cart but leave the app, you might receive a coupon a few minutes later. While this doesn’t always happen, establishing rules like this can be beneficial.
All your existing customers, who have made at least one purchase with your brand, are potential repeat customers and can be retained with much less expense. This is because you can often skip many of the initial interactions that were set up to encourage the first order since the customers have likely had a good experience already. Thus, targeting them is somewhere between 5 to 25 times more efficient than acquiring new customers, according to the Harvard Business Review. To do this, you can use the item journey of each segment to entice them with what they are most likely to buy next. At this point, you might need a personalization strategy, but let’s discuss that in another article.
Once your customers are on the right journey, it might be the right time to optimize each stage to maximize revenue. You may explore the hypothesis of whether your loyal customers refer your brand to their friends or if your loyal customers are actually referred by others. Additionally, you can check if a newsletter increases the chance of loyalty and thus, revenue as well. If so, you need to encourage customers to subscribe to your newsletter.
Encouraging your customers to follow the journey you set is costly. Like the Uber Eats example above, your customers would abuse your campaign if you keep it too long time or if it is too obvious in that industry.
The e-commerce customer journey is a process involving stages from awareness to loyalty. Creating a journey map helps businesses understand customer interactions and improve their experience. This aids in devising effective marketing strategies for customer acquisition, activation, retention, and revenue generation.
If you develop a blueprint of brand marketing plan based on data or have any difficulties of customer data analysis, please download Retentics Analysis workbook for e-commerce in below!
written by. Julian Kim, Zack Lim
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