Thanks to Jumia and Konga.
We can now buy something online and expect it will be delivered free of charge. And we don’t even have to worry about paying for the goods on delivery if we don’t like it anymore: meaning that we can simply change our minds, anytime.
That is the joy of the Pay on Delivery model. It leads to impulse decision which you don’t have to back up with your money. This is because, as CEO of Gloo.NG said; “the two AAs have spoon-fed us” and the Africans in us also got the better of us to believe that “seeing is believing” before we part with our money.
As a startup, imagine your delivery guy showing up once, twice and three times to deliver an already ordered item only to be turned down; being told that the item is no more needed. The pain is that your bootstrapped startup and the unlucky delivery guy just incurred another negative expense.
I don’t have any data to back up how often this scenario happens, but I am not the only one pissed off by it. One guy who is pissed off with this fragmented process is the CEO of Drinks.NG. He shared his thoughts on a recent interview. I agree with him that the eCommerce business model of Free Shipping and Pay on Delivery bleeds the startup of cash and can kill your business in a flash.
Do you agree? You should, if you run one
So how do turn your business model around?
How do learn to ask your customers for money before you send their orders?
How can you give them an irresistible offer that POD will not matter again?
You are not the only one thinking about this. The guys at SuperMart and Gloo are. In fact, both are eCommerce giants in their own rights.
Let me divert: I want to “show” you something……..
You see, one of my mentors was sharing in a seminar that one of the best ways to sell is to change people’s belief. And then pitch your product to sustain that believe or make it as the fulcrum. So, if you want to sell a drug to a HIV/AIDS patient; first make him believe it is curable; then shown him your drugs. Simple.
Let see how these two eCommerce guys use this super smart marketing principle.
Take for example, SuperMart;
When SuperMart guys profiled their customers; they make them believe that they are high-class who should consider SPEED of delivery because of their busy lifestyle. With that understood, it is easier to ask them to pay before the orders are sent. And people will pay for speed.
Recently, SuperMart started a subscription programme that provides free monthly delivery for all orders. This is a similar to AmazonPrime, a model that increased consumer purchases by 6X and was reported to have disrupted the consumer path to purchase and altered the competitive retail landscape in US.
One more thing; I love almost every issue of their email marketing. Psychologist know that the easiest way to make someone part with his money is selling you a dream. These guys do that every morning. Their mail hits my mailbox 5:47a.m each morning. With those emails, they have put me (and you) in the buying mood. It is easier to make us part with our cash before we see the goods.
[Screenshot of daily dose of emails from SuperMart]
Let’s switch to Gloo.
I read about Gloo.NG in a recent interview and love what they are doing with their subscription model. It is sooooooo tempting not to join it.
The following steps by GlooNG are worth considering.
Take for instance, for every item on the store, there is a special price for the VIP buyer.
Do you know how effective a guarantee is to your customers?
With a guarantee, you are assuring that whatever happens you have their back, even at your own loss. Customers like that a lot. Have a guarantee so powerful that your customers will look foolish for not taking you on the offer. The fact is that a solid guarantee will bring you so much MORE business if you do it right, that you can easily afford to deal with a few knuckleheads. Besides, it’s a myth that customers will rip you off by taking advantage of your guarantee. It rarely happens.
That’s the message Gloo is sending with it Insanely Easy Returns program.
Let’s assume you have products which are in short supply and will be available over a short period of time, you can get your customers to pre-order and frontload this with massive benefits and bonuses that are exclusive to early payment.
Borrow a leaf from Crowd funding campaigns and see if customers will love to have exclusive bonuses and the benefit of low prices. Take for example, this product that generated almost $1Million dollars in pre-orders by leveraging Kickstarter.
Thinks about the customer for a second.
Let’s be realistic:
Consumers have their worries too. It is deep seated in our beliefs. What smart businesses do is not to waive aside these concerns but to address them well.
Are you surprised that the co-founders of Supermart were once with Jumia (in fact, they are the same guys that pioneered POD at Jumia J. So, how were they able to transition effectively?
Kehinde explained that building and sustaining trust is the single leverage that helped them to transition from a POD to asking for cash.
If building trust is the key to scaling this hurdle, below are 5 ways to build trust for your platform
- OFFER GUARANTEES:
Let them know they can have their money back: have a clear return terms and polices that is user friendly.
Address psychological objections ahead by curating testimonials of satisfied customers and user success stories.
Your website design should communicate trust. A Research by Gartner shows that websites rank as the most important factor for marketing success. Based on this, you want to optimize your website for mobile as over 55% of ecommerce now begins on the Mobile device.
4. OFFER CLEAR PAYMENT OPTIONS:
Offer your customer an instant easy option to pay for your products. If you are bootstrapping, you can try out Paga, SimplePay and VoguePay. VoguePay has this additional benefit of having several tools for developers and free integration plan for multiple CMS including WordPress, Drupal and InstaCart.
5. SELL OVER THE EMAIL:
Most people don’t buy on first visit. So you should develop a system to collect their emails and nurture them through your sales cycle. Use email marketing to indoctrinate your prospects. Nowadays, there are technologies you can use to send behaviorally targeted emails to coincide with the actions of your users; for example, you can have a series of emails targeted to someone who abandon her shopping cart without checking out or you can use email for customer on-boarding.
This piece appeared first on TechPoint. It has been slightly revised
These are all my thoughts…what are yours????