The following post was originally published in August 2010.
eCommerce has come a long way in a very short time. In many consumer product and service categories, there is no easier way to buy than online. Books, movie rentals, music, hotel reservations, and event ticketing are just a few of the categories that are easily transacted at the touch of an Enter key.
With shopping cart processes now perfected, progressive online merchants are testing and refining new Revenue Enhancement tactics. The best (though far from new) method is the in-path suggestive sell: “customers who bought this item also bought x”. When combined with an offer of free shipping at a higher transaction level, this method delivers exceptional returns with equal benefit to the brand.
Other methods to drive ancillary revenue have less integrity and, over time, pose reputational risk to the business. One such technique is the post-transaction upsell. One of our spotters recently had a negative engagement with this tactic during an online purchase of seats to an event. Three months after the event, they realized that they had been charged $19 per month for enrolment in some sort of membership club. How did it happen? How does the post-transaction upsell work?
During the final phase of check-out, an offer of a free gift is presented using a pre-checked tick box. Next to this box is the acceptance agreement which, in our spotter’s case, states that the customer agrees to the offer terms which include a free trial in a membership club. The offer terms are presented in small type at the bottom of the page, in a scroll-and-view drop box, or on a separate page in the order confirmation flow. If the customer does not cancel their enrolment after the short trial period, they are automatically billed a fixed monthly fee thereafter. Profits flow from the cohort of members who don’t realize the deception or don’t demand a refund until much later.
The technique is cleverly designed to generate a high volume of unsuspecting subscribers who simply miss the “tick box-to-asterisk” sequence as they anxiously move to complete their intended order. In our spotter’s case, the complaint to the merchant was re-directed to the membership provider, and they were issued an immediate and full refund. Seemingly, the ‘ticked off’ customer is quickly appeased to mitigate the likelihood of their discontent becoming content in an online forum.
The Bottom Line
In-path and post-purchase upsell are two methods of Revenue Enhancement that online merchants can implement with great success. If, however, the tick box becomes a ‘tick off’ factor, they risk alienating their most loyal customers and anyone to whom word of the ‘gotcha’ spreads. To explore revenue enhancement solutions that engage the customer and enhance your brand, contact Stratum Five today.