Cart Abandonment: What You Need to Know and How to Fix It
It’s the time of year that online stores are gearing up for (and if you’re not…what are you waiting for?). A slew of new campaigns are sure to be rolling out over the next two months for Black Friday, Cyber Monday and the entire holiday season.
So with the anticipated increase in traffic, what’s your plan to capitalize on people who have been lurking around your ecommerce site, maybe even adding to the cart, but not purchasing?
Cart Abandonment Happens
Let’s face it—we’ve all been there. We’re looking around an online store. Maybe we’re just starting to look. We may want to search for overall reviews off the site. We realize we completely lost track of time and have to race to pick up kids from swim team practice. Or maybe we’re looking for a coupon and get sucked into a black hole of too many tabs open and forget we were shopping in the first place.
For whatever reason, cart abandonment happens. In fact, it happens so much that the overall average for cart abandonment is 68% (give or take based on your industry).
"If you're not focusing on winning back sales from cart abandonment, your Facebook Ads strategy is wrong" TWEET THIS
So...What Can You Do About It?
Let’s break down what that actually means for your bottom line, how you can identify key metrics to monitor and what you can do about it with Facebook retargeting.
One of your best friends for monitoring cart abandonments—and how much you can try to win back—is Facebook’s Pixel data. We focus on five areas when we're auditing or running campaigns. Here is an example of the data you will find, which you will need for the calculations we discuss below.
Ecommerce Site Conversion
First, you start with your “View Content” metrics. You should already have the View Content standard event installed for all of your products. This shows you how many people are looking at your products.
Next, you find the amount of purchases and divide them by the View Content number. Keep in mind, that the overall industry average is 2-3% for sales.
Purchases / View Content = Ecommerce Conversion Rate
Average Order Value
Depending on your website reporting, you may easily have this at your fingertips already. If not, we use the Facebook Ads Manager dashboard to find website purchase totals and divide those by the number of purchases. This is only giving a prospective from Facebook sales, but it gets you close.
Website Purchase Amount / # of Website Purchases = Average Order Value
Grab your total purchases again (same number you used to determine your ecommerce site conversion above). Then find your “Add to Cart” values from your pixel metrics dashboard and divide the purchases by add to cart.
Purchases / Add to Cart = Cart Conversion
100% - cart conversion = Cart Abandonment Rate
Now it starts to get fun (if you like analytics the way I do)! Subtract your purchases from your "add to cart" metrics. Then take the difference and multiply by 20%—roughly the industry average for reclaiming sales when you implement a solid retargeting campaign. Then, multiply that by your Average Order Value and you can see exactly how much money you're leaving on the table.
(Add to Cart - Purchases) x 20% = how many orders you should be able to reclaim
Orders you should be able to reclaim x Average Order Value = $$$$
Win Back Your Abandoned Carts
Great—you’ve figured out all of the sales you are leaving on the table! Now what? This is where Facebook's dynamic product ads (DPAs) start to shine. If you’re just getting started, make sure you successfully set up your product catalog and retarget with a minimum of 2 steps (we like to call these “stacks”). For example, if the audience viewed or added to cart within the last 1-3 days serve up one ad. Then if the audience viewed 4-7 days ago, serve them a different ad with a value-added bonus, i.e. free shipping, a discount, etc.
Image courtesy of Social Media Examiner
If you’re really trying to maximize your DPAs, build out a more intricate stack. We’re going to be going for a higher frequency, which could mean ad fatigue. So the more you vary your offers, the better. Here’s an example of a stack we implemented to focus on reclaiming sales. Originally there was a simple two-step stack in place. We refreshed the DPA stack to be five steps:
- View Content or Add to Cart: 1 day
- View Content or Add to Cart: 2-3 days
- View Content or Add to Cart: 4-7 days
- View Content or Add to Cart: 8-14 days
Each of these ad sets has a different ad and message to help the audience through the buyer’s journey. And for this client, we’ve seen their site conversion rate go from 1.11% to 4.39% in just three weeks! And we’ve trimmed back their abandoned cart average from 68% to 63%.
As long as you know how to not just read the analytics, but interpret them, you can get a glimpse of the possibilities. Then get creative and be willing to experiment to test your theories. Every client and every industry will be different. But the important thing to remember is that the opportunities are there waiting for you.
I build digital brands. Plain, and simple. Well, not so simple—building brands is more than making something look pretty and sound good—they have to be effective and goal-driven too. That's why everything I do for my clients building their Facebook Ads, inbound marketing efforts and websites is rooted in strategy and analytics.