Running an online business is tough. You pay for advertising to drive traffic to your store, and invest in a design which looks established and professional. You craft captivating content and product descriptions to grab your customer’s attention, and have professional photographs taken of your products to show off the quality of your catalog. All this costs money.
When you invest so heavily in your business, seeing customers filling their carts and then failing to finalise their payments is disheartening, frustrating and downright costly.
You know that shopping cart abandonment has an impact on sales. Your colleagues tell you to develop a cart abandonment program. So you madly research how you can minimise these lost sales by reading articles like “7 Ways To Reduce Cart Abandonment In 2016.”
You desperately want to minimise your cart abandonment rate and boost your sales, but like every good business owner, you want to know the stats before taking action. The problem is, you don’t even know your cart abandonment rate.
Before you go making any changes to your checkout process you need to have a baseline. To establish this, you need to work out your current shopping cart abandonment rate.
How To Calculate Your Cart Abandonment Rate
Before you can calculate your cart abandonment rate, first you need to determine some other important numbers.
- The number of transactions completed
- The number of transactions initiated
Discovering the number of “transactions completed” is fairly straightforward. This is the number of finalised sales, or to put it even more simply, the number of people who have gone through the entire checkout process and paid you money.
The number of “transactions initiated”, is the number of carts that have been created. This number is found by taking the current number of carts in the system that have not been finalised plus the number of finalised sales.
Your cart abandonment rate is calculated by taking the number 1, minus the number of successfully completed transactions, and dividing them by the number of initiated transactions. This will equal your abandonment rate. It should look something like this, where AR is your Abandonment Rate:
This formula will give you your shopping cart abandonment rate as a percentage.
So How Do You Use Your Abandonment Rate To Make More Money?
You now know what your current cart abandonment rate is. So what do you do now?
The average rate of cart abandonment is 68% according to the Baymard Institute.
Every store is different, and there are a number of reasons why customers abandon their carts. Of course, you can’t fix all of these reasons, but you do want to make sure that you do everything in your power to minimise these lost sales.
If your current rate is hovering around 68%, while this seems like a lot, you’re on par with most other E-commerce stores. If it’s less, then congratulations! You are doing better than average (but there’s still a lot of opportunity to make more sales).
If it’s worse… well you may need to take another look at your conversion strategy.
If you have Google Analytics set up, you should be able to find out your cart abandonment rate quickly. If you don’t, make sure you watch this video and get it set up right away.
Regardless of where you currently stand with your cart abandonment rate, there are always ways to improve. Now that you have a baseline, you can start testing changes to your checkout process and minimise shopping cart abandonment on your site. This will help you convert more visitors into customers, and make more money.
Want to know how your cart abandonment strategy measures up to our best practices? Take the cart recovery survey here! We’ll send you your results to give you some more ideas about winning back more sales.