Increasing Conversion along the mCommerce Customer Journey

Increasing sales on a mobile commerce (mCommerce) platform is often seen as synonymous with driving more traffic through mobile channels—whether through the mobile app, tablet or mobile site. Yet there are other ways for mCommerce startups to increase sales besides increasing app downloads. Chief among these methods is increasing conversion in the customer journey to levels that are on par or better than desktop conversion rates or any other benchmark a company is using.

Typically mCommerce platforms have customer journeys roughly similar to the desktop customer journey. Give or take a few steps depending on the product, industry, stored preferences, member vs. guest, etc. These customer journeys almost always (roughly) look something like this:

When scaled up to thousands if not millions of customers all going through this process, the customer journey in aggregate looks like a funnel. In early stages of the journey, the funnel is broad—there are many customers. Yet by the time the journey is at the “Confirmation” stage the funnel has narrowed, and there are very few customers remaining who actually convert into buyers. An example using Airbnb will help illustrate the concept of the funnel. All numbers are completely made up and used simply for illustrative purposes.

Let’s say there are 100 potentials customers who login to Airbnb’s iPhone app on Friday at noon. Of those 100, let’s say 80 proceed from the Login page to actually browsing the listings of sublets in the destination of their choice. Of those 80 who browse the listings, only 30 actually select a sublet that they are interested in. Of those 30 who select a sublet of interest, only 10 make it to the “Review” page where they review their listings and perhaps add any extra features they want. Of those 10, only 5 actually enter in their payment information. And of the 5 who enter their payment information, only 2 click submit and reach the “Confirmation” page. Thus of the original 100 who logged into the app, only 2 actually purchased, resulting in a final conversion rate of 2%.

There is clearly a big opportunity to increase conversion—particularly if Airbnb’s desktop conversion is higher than 2% or if their competition has superior conversion rates. Startups looking to increase conversion in the customer journey can target 2 different methods:

(1) The first method is to simply make it easier for customers by eliminating steps in the customer journey. A great example of this is how Uber has dealt with payments. By taking a photo of your credit card the first time a customer opens the app and then storing that information, they have effectively eliminated the payment step in the customer journey. Fewer steps in the journey, mean less opportunities to fall out and, ultimately, higher conversion rates.

(2) The second method is to simplify painpoints in the customer journey. In other words, increase the conversion rate of steps in the customer journey where customer fallout is particularly high. So if the conversion rate from “Browse Listings” to “Select Product” at Airbnb is currently 37.5% (30%/80%), focus on increasing that step’s conversion rate to 50% or 60%. This particular step in the journey has been mastered by many of the airlines and hotel companies (SPG and United in particular) with their unique mapping features, simplified browsing/sorting capabilities and sharp focus on UX. As can be imagined, increasing conversion early in the customer journey (when the funnel is still wide), should be prioritized as it has the potential to have the biggest impact on final conversion.

Mobile Corner: Some Themes

Mobile has been the one of the big buzz themes in startup land for the last year or so. Companies like Foursquare, Spotify and Flipboard are pushing the limit of what our cellular devices can do and generating incredible innovation in areas like social networking, news delivery, digital entertainment, gaming and peer-to-peer communication. Yet despite these successes the market is still quite raw and much remains unknown about what makes a good mobile app successful. Even less certain is the revenue model. Should mobile startups today go with in-app or separate app freemiums? Virtual currency? Subscriptions? A 100% ad based model?

What does seem clear, however, is that, as with web 2.0, it’s all about creating traffic. If you can create a tool that provides value to users and makes something about their lives simpler or more engaging, you may have something that could garner attention in the mobile market. So here are a few of my thoughts on what might make a mobile startup successful:

1) Be light-weight and simple

I doubt that users of mobile apps are looking to get the same experience that they get on their laptop or home computer. The hours spent on facebook on your couch at home are less likely to happen when you’re up and about. When it comes to mobile, people want things that are simple, fast and easy to use. They want to be connected on the go and are focused more on 1:1 connections rather than large social interactions. Kik for example has pushed the frontier of texting, making it an incredibly fast (we’re talking real time) and light weight platform that goes cross-platforms (Phone, Android, Windows Phone 7, Symbian, and BlackBerry)

2) Consider Gaming

The great thing about mobile devices is that they can be taken anywhere. Most people spend a fair amount of time traveling each day (whether on a bus to school, train to work, etc.,) With that commute comes the time to play games on platforms like Zynga. Games have traditionally been a single player human-to-computer interaction but, increasingly it’s becoming more interactive allowing people to connect with existing friends and play peer-to-peer. There are some “gaming” apps that are a bit more serious in nature. Everest for example is a mobile platform for framing and achieving goals. The app lets you create specific goals, break them down into incremental steps and then focus on achieving these goals with the emotional support of friends. This will be an interesting startup to follow as it moves out of beta.

3) Style. Style. Style.

One of the most important keys to the success of a mobile device is its “elegance” factor. Appearances and first impressions matter in the competitive and still developing world of mobile. Apps should follow basic principles of design and usability; they should also mimic the desktop interface closely (or at the very least follow similar conventions). A thoughtfully and creatively designed product stands a much greater chance of being successful in the mobile world. Here’s a link to some mobile apps that were knockouts in terms of style in 2011:

http://mashable.com/2011/12/27/best-mobile-apps-2011/

Social Practices and New Media (Mobile)

The cartoon above seems to get straight to the heart of much of Lee Humphrey’s research on social interaction in today’s wireless era. When we interact with others whether face-to-face (as in the case of the man and chicken above), via computer mediated communication (like in Hancock’s study on butler lies in Instant Messaging) or by telephone (as in Humphrey’s study of caller interaction), we are constantly looking for ways to avoid awkward situations, feelings of vulnerability or having our private space violated. This is particularly true when two individuals are dialoguing face to face and are suddenly interrupted because one individual receives a phone call.

The Situation

This past Sunday I was hard at work assisting an entrepreneur I’ve been in touch with for some time now with some basic product development. My two housemates, Tim and Andy, had just returned from a dinner run with subs and chips and were munching away at their sandwiches while having a heated debate over where we should all go for our next break. Suddenly, Tim received a call from his cousin. The phone conversation lasted approximately five minutes during which time Andy increasingly became more and more uncomfortable. At first he simply gnawed away at his sandwich while pretending to ignore the phone conversation. After a few minutes of restlessly rapping his knuckles on a coffee table Andy flipped on the television set in the room and started watching ESPN until Tim finished his phone call.

Analysis

Before Tim’ received the call from his cousin, he and Andy were both withs. As such they had been giving their full attention to each other and the debate at hand: vacation plans. Together they had a common identity or purpose which helped them avoid feeling vulnerable despite the fact that they were in a public place. However, the moment Tim received the call from his cousin on his cell phone, the relationship changed. Andy quickly became a single and Tim became a “with” with his cousin who was on the phone.

As a result, Andy began to feel awkward and vulnerable. Because of these feelings of awkwardness and vulnerability, Andy tried very hard to do several things. First, he tried to pretend that he was not listening to Tim’s conversation. This could be seen by the fact that he oriented his body away from Tim in an effort to give James more privacy. The second thing Andy did was to attempt to appear occupied. He first preoccupied himself by ravenously downing his sub and then moved on to watching television. Both of these actions were attempts to appear occupied and socially adept.

Applicability of Identified Social Practices

In her work on social interaction in the wireless era, Lee Humphreys identifies a number of social practices—many of which still apply today. Caller hegemony—or the idea that the person making the phone call has power over the call recipient is still prevalent. This is primarily true because the caller has all the information on why the call is being made and what the topic of discussion is going to be. Nevertheless, the rise of caller ID has taken away some of that power as the recipient now at least has an idea of where the incoming call is coming from.

The rise of texting is an even larger break from the social practices identified by Humphrey. It is becoming more of a social norm to carry on a text message conversation while interacting with someone completely different face to face. This is a result of the fact that text message conversations require less time and energy on behalf of the texter relative to a phone-to-phone converser. Thus, an individual can potentially be a “with” with a face-to-face entity and a CMC entity simultaneously. This is especially true if one is good at multitasking.

The Psychology Behind Mobile

Lying as a rule is generally considered socially unacceptable and morally wrong. Something is considered a lie if it is intentional and creates a false belief. Some would argue that there are certain situations in which lying is socially beneficial. This is most argued when it comes to other oriented lies—lies to benefit others. Regardless of whether one sees lying as justifiable or not, everyone has lied—even if it’s a lie about the most harmless thing—and everyone acts deceptively from time to time. When it comes to computer mediated communication, lies and deception are perhaps more common than in face to face communication.

Butler lies are a particular category of lies that utilize deception to manage social interaction. Butler lies can be used to avoid a new conversation, smoothly exit an ongoing conversation or explain other communication behavior. In John Hancock’s study of Instant Messages, of the 6996 messages sent, 685 (10%) were identified as lies, and 132 (1.89%) were classified as butler lies. I analyzed 30 text messages from my phone’s sent list and came up with the following results:

30 Total Messages
27 true messages
3 lies
2 butler lies

Thus, 10% of my messages were lies and 6.7% of my messages were butler lies. These results are fairly similar to the results found in the Hancock study but with an increase in the percentage of butler lies. Looking at my messages I saw that the 2 butler lies had to do with attempts to end an ongoing conversation and to explain communication behavior. The first butler lie occurred when I was talking to an annoying individual in my major who was asking me to basically give him the answer to one of the problems on our weekly problem sets. I exited the conversation with, “sorry man I’ve got a class now. I’ll catch you later.” Of course I didn’t have a class, and I never called him back. Nonetheless, the butler lie allowed me to remain polite and seem interested in helping.

The other butler lie occurred when a friend asked if I wanted to get lunch with her. I responded with, “I’m real sorry, but I have a meeting then – let’s meet Thursday.” I didn’t have a meeting later on that day but I decided to lie because Thursday was more convenient for my schedule. Stating that I had a meeting was used as an excuse or justification for my self oriented lie.

I think that lying on IM is much harder than lying via SMS text messages primarily because of the issue of speed. Text messages limit the time pressure placed on an individual to respond because there is no sense of presence or visibility. An individual could be preoccupied with other activities and could take a long time to respond. Because there is less time pressure, individuals text messaging have a longer time to compose a well drafted excuse that allows them to lie convincingly. When using an instant messenger, the pressure to respond quickly is much higher due to a stronger sense of presence and visibility—unless there is an “invisible feature.” This means individuals are under a stronger time constraint and less able to compose well thought out, deceptive lies. In that sense, one could argue that IM is perhaps morally better for society than SMS. But that is an incredibly personal and subjective question.