In Part One of our Subscription Sales blog series we covered why you should consider adding this offering to your eCommerce platform. Here in Part Two, we’ll talk more about how you can make such an offering a reality for your customers.
(Here’s the 10-second recap from Part One: Subscription Sales are booming in popularity for eCommerce competitors because they can create a recurring revenue stream that makes customers happy and, once operational, require little additional management oversight. And here is the full first article if you’d like to catch up.)
Let’s take a look at solutions offered by two of the most popular eCommerce platforms, Magento and Big Commerce, in supporting a Subscription Sales option for you.
Take Your Cues from 2020
The logical place to start in planning a strategy for your 2021 holiday season is a look back at your site’s performance during this same span in 2020.
No doubt, 2020 was a year unlike any other we’ve seen in the brief history of the eCommerce era. Fueled by the realities of the pandemic, online holiday shopping spending surged by a whopping 32% last year.
You surely looked at the good that came to your site once the holidays passed, but did you do proper diligence examining negative issues like fraud? That kind of analysis is the place to start for your 2021 holiday planning. The site Payments Journal suggests two very good questions you should be asking:
- What kind of transactions generated the most fraudulent activity on your site and through what channels did they come in from?
- What negatives resulted from this activity that hindered your ability to serve your legitimate customers?
You need to be looking at the act of prioritizing fraud prevention for the 2021 holidays now as what it really is — a way to safeguard all your business transactions, for the benefit of both your business but also your true customers.
Is Fraud on Your Radar Now?
We’ll take it as a given that you are deploying some level of fraud protection now. Yet, it’s important to ask yourself what you are learning from those efforts. Do you just accept that a certain amount of fraudulent activity comes with the territory, just as any business is going to have some losses? Or are you taking a bigger-picture approach and considering how your efforts to prevent theft could also be spilling over to prevent sales?
A perfect example of where this can occur is in activity known as false declines. It occurs when an actual paying customer gets blocked from checking out because something about the transaction has tripped your fraud protection. Data from Magento shows just how damaging this can be — your newest customers, the ones you have worked so hard to attract, are 5-to-7 times more likely to have transactions declined by fraud tools, and up to 40% of those who go through this ordeal will go on and make their purchase from one of your competitors.
Clearly, this is a vulnerability you want to have a handle on going into the holiday shopping period.
Striking the right balance when it comes to chargebacks is another challenge. You have banks and credit cards on one side who are monitoring your chargeback ratio to make sure you are being vigilant in protecting against fraudulent sales. On the other side, you have the interests of customers, who have high expectations to get through the buying process with as little friction as possible.
Because so much is riding on keeping parties on all sides of this equation happy, you need to be frequently monitoring this component of your business. And the odds are that if you don’t have a good strategy and are struggling with this in August, it could be a much more troubling problem when sales volumes skyrocket in November.
Magento considers this kind of risk one of seven problems they identify as growth-killers for eCommerce operations.
Other Action Steps on Fraud to Consider
Limiting the damage that comes with fraud has human elements to it.
You, of course, want to have a high-performing anti-fraud component built into your eCommerce operations. Most of the time today that is going to involve some level of AI technology. However, you can’t simply expect to let that technology run on autopilot and consider the matter fully contained.
Your customer service personnel can be an important part of your fraud defenses — if they are being trained in what to look for. Now is the time for that training to ramp up. A customer service rep well-versed in how your site operates and also in the type of tactics that fraudsters often resort to can be a key aspect in your anti-fraud efforts.
The value of human involvement also goes up another level in your operations when you make fraud identification a priority Those whose jobs involve monitoring business flows and trends for your eCommerce operation also have a role to play. In their case, they need to be aware of how your anti-fraud programs work. They also have to be able to recognize unusual activity and discern when trends are developing that are pointing to a possible increase in fraud.
The best backstop you can offer in successfully supporting both your anti-fraud software and your employee efforts is to review your operation’s anti-fraud policies and make sure they are appropriate for the kind of business you are engaged in. It is not a one-size-fits-all type of consideration. Those opportunists looking to commit fraud would love to find loopholes in your operational policies that make their efforts easy. It’s part of your job to make sure you aren’t helping them in this regard.
Work Now So You Can Fully Enjoy the Holidays Later
You’re hope is that you are going to be very busy once the holiday season rolls around. And the odds are great that you will be, one way or another. You will be busy selling your products and building your customer base by making people happy, or as the alternative you don’t want, you’ll be busy putting out fires because your sales process is falling victim to those engaged in fraud.
One study from last year showed that fraud attempts in eCommerce were up by 69% year over year. Simply relying on the same anti-fraud approaches you used during the 2020 holiday season will likely leave you at risk for becoming part of that sad statistical group later this year.
Now is the perfect time to make sure your exposure is as limited as you can reasonably make it. Make it your goal — have your updated fraud strategy fully ready to roll before that day arrives when you see the first Christmas decorations of the 2021 season showing up in a store near you! If you would like assistance with that effort, we’d be happy to help.