OrderMotion Blog

Last week's blog focused on the perils of inaction when it comes to monitoring your online order fulfillment process, this week I’ll address some of the solutions that I have personally seen turn troubled ecommerce clients into operational masterminds. 

In my recent webinar of the same title (click here for recording of webinar) I posed this evocative question in an attempt to raise the awareness of the dangers of being too complacent when it comes to monitoring your online order fulfillment process.   

Customers interact with your brand throughout the entire order process, and much to merchants chagrin, cancellations and returns are part of that process. 

It’s no secret to anyone who sells health and beauty products online just how challenging it is to build customer loyalty.  To be clear, I’m referring to any online retailer that sells vitamins, supplements, diet foods, OTC medications, personal care products, cosmetics or fragrances.  The ugly truth is that health and beauty is a hyper-competitive, highly saturated industry that often competes on price, and the ability to entice customers to purchase from you again and again can be down right daunting.   In fact, some industry experts estimate that 50% of new customers never make a second purchase, which isn’t surprising if you happen to sell lawnmowers or dehumidifiers.  But the very nature of health and beauty products predisposes repeat buying behavior, and if you’re not engaging shoppers in automatic replenishment programs (aka continuity programs) you’re missing tremendous revenue opportunities.   Here are three ways you can take the ugly out of your online business: 

It was back in 2006 when OrderMotion performed its first formal PCI audit.  If you’re not familiar with PCI or more specifically, PCI DSS (Payment Card Industry Data Security Standards), it is an information security standard for organizations that handle cardholder data to reduce credit card fraud.  Any merchant or service provider that processes, stores or transmits cardholder data is required to comply with PCI standards every year.  In 2006, PCI compliance was a new requirement for many organizations, not just OrderMotion.  We upgraded our infrastructure, contracted additional security devices from our hosting provider, developed and implemented many new policies in our organization, and made sure our system met all twelve chapters of requirements outlined in the early years of PCI data security standard. Confident about our compliance, we hired a reputable company to perform the third party audit.  As it turned out, OrderMotion was one of the first SaaS service providers to undergo a PCI audit, and as a result the auditors initially struggled to apply the data security standard intended for merchants to a SaaS service provider such as us. We spent six months educating the auditor, and documenting and discussing what PCI for a SaaS company meant.  In the end, we submitted our first ROC (Report of Compliance) to VISA and promptly received our AOC (Attestation of Compliance). Victory at last!

For example, there are two types of shoppers: the shopper who is unaware that they signed up for a monthly shipment and can’t seem to ever get it to stop, and the shopper who enjoys having their favorite coffee automatically replenished each month and shipped straight to their home.  For the former, continuity programs are a curse, for the latter, they are a welcomed and valued time saver.

Here are three significant blinders eCommerce executives are often forced to wear when they choose homegrown or small market order management solutions and the limited definition of order management these solutions often mandate:

The day before my annual vacation to our favorite Mexican resort, I was asked to contemplate the value of repeat buyers and how increasing profitability and lifetime customer value applied to the Direct Response Industry.  Amidst the numerous tasks I had to complete - tying up loose ends at work, packing, shopping for the perfect poolside shoes - I was now plagued by interrupting thoughts of continuity, increased stick rates and customer retention.  Then, in the middle of checking my personalized, resort-provided packing list for our sixth trip to our little slice of Mexican heaven, it dawned on me.  It wasn't the sunny beaches, impeccable service or even the poolside bar that kept us going back year after year with our hard-earned cash in hand.  It was, in fact, the resort's ability to cultivate and maximize the ultimate gem in the travel industry's treasure chest of profitability:  the Repeat Buyer.  Other industries have long capitalized on a truth often overlooked by the Direct Response Industry:  a repeat buyer is more valuable than any initial customer acquisition. 

Our estimate is that more than half of eCommerce enterprises are integrating backend processes manually or with a "homegrown" system.  Bucking the trend of “buy” winning out over “build” that exists in most business areas where strong product solutions exist, eCommerce companies come to the conclusion to build homegrown order management "systems" for a number of reasons.  For the very small (say <$1M in on-line revenue), although still limiting, homegrown may be all that is required.  For the very large (say >$500M+ in on-line revenue) large IT teams and budgets often exist and integration requirements may actually merit a homegrown solution. In addition, product solutions for the very large market are very expensive.  If a large, sophisticated IT team exists a homegrown solution may actually be cost effective.  For the mid-market, we see eCommerce companies with homegrown solutions for many reasons. The most common combination of reasons we observe is: 1. The limited set of options that existed in the middle market to deliver effective order management when the business started and/or began to grow significantly, and 2. The lack of understanding of the potential for order management solutions to be leveraged beyond order processing to drive revenue growth, increase average order value and lifetime value of the customer. 

I’m amazed every time I receive a plain text email from one of my favorite brands after a purchase, or at any stage of my order’s lifecycle.  Don’t they love me? Don’t they want to engage with me after I just opened my wallet?  I can’t help but feel a little used when all I get is an impersonal order confirmation email.