As ecommerce marketers, often our opinions about our customers’ shopping behavior clouds our judgment and leads us to make decisions that may harm our conversion rate. It’s easy to make incorrect assumptions based on web analytics data, or worse, to presume that our customers think and behave the same way we do. Research into the real attitudes and behavior of our customers can provide insights that contradict our assumptions. Here at Elastic Path, our research team recently conducted a study on the buying trends of software consumers (sign up to our September webinar Selling Software to Consumers, Upgrade Now! to get a copy of the research). Use consumer research to shape your personas and persuasive messaging to address the preferences, fears, uncertainties and doubts about your purchase. This post will use the software industry as an example of this application. Example Business Issue: Software Delivery A pertinent business issue for the software industry is the delivery of its product, which can be digital (download), physical (CD/DVD) or a combination of the two. The COGS (cost of goods sold) is obviously much lower for digital goods, and it’s in the vendor’s best interest to offer only downloads, saving inventory (or print-on-demand costs), warehouse and fulfillment costs. The customer also benefits, with instant access to their purchase and no garbage CD lying around. Makes sense to us tech savvy folk to offer only digital product, but is that what customers want? Our research found that 41% of US software consumers stated a preference to have a physical CD or DVD of their software shipped to them rather than download their purchase. In today’s digital world this may seem high, but considering software installed on consumers PCs, laptops and mobile phones may have a longer shelf life than the devices themselves, it makes sense. We also discovered that 69% of US software consumers use the same software on multiple machines in their home – for example, a desktop and laptop computer. For these consumers, owning a physical copy of their software purchase both offers convenience and protection should they change, damage or corrupt their PC or laptop. Many software publishers offer a backup CD/DVD or download insurance as an upsell for customers who decide to download their purchase. Of the 59% of US software consumers who preferred to digitally download their purchase or had no preference, 40% would be prepared to pay extra for a backup copy on CD/DVD and 30% would be prepared to pay for extended download insurance.
For software sellers that sell digital products exclusively, the segment of customers that desire physical copies need extra persuasion to download rather than seek out an alternative seller. “Instant gratification” of enjoying the purchase immediately is important to communicate. Microsoft and Intuit both promote the green credentials of downloading software vs shipping it. This approach encourages consumer to change their attitudes about digital, and cuts warehousing, fulfillment and distribution costs. If only download protection (insurance) is offered in lieu of a physical backup, the messaging must be very clear that the same protection is offered to address the FUDs (fears, uncertainties and doubts) this segment holds. The backup insurance option should be offered on the product page, it may encourage more people to add to cart. For sellers that auto-apply optional download insurance to the cart, messaging should clearly convey the value proposition of the upsell – don’t just list it as a line item. Many sellers simply add the upsell to the cart, with no explanation of why the customer should not opt out of it.
For vendors that offer some products physically and some digitally, available formats should be clearly shown. 80% of Electronic Arts’ PC games are available only as a download, yet they force the customer to select “digital” from a single option drop down box. Save users a click by showing the single option with a pre-selected radio button: The takeaway is that research can identify consumer preferences that can help you analyze your site and look for opportunities to persuade different types of customers – no matter what product you are selling. To find out more about the buying trends of software consumers sign up for our September webinar Selling Software to Consumers, Upgrade Now! where we will explore the findings of the online survey and look at actionable advice for software retailers to improve the online shopping experience. All registrants will receive a complimentary copy of the research “Consumer Software Buying Trends 2010″.