Guest Checkouts and Opportunity Cost Analysis – Part 3 of 3


Sometimes is not easy to change your checkout process to go from registration required to guest checkout. This article describes how you could forecast how much you’re losing if you don’t offer a guest checkout option. The method is an approximate but can help you with the number$ needed when making the case for the guest checkout to your boss. The concept behind it is to forecast how many people will not proceed further to the next pages from the shopping cart page, because of the registration requirements.

It will not be easy to gather all the metrics below but I would recommended knowing them anyways, not only for the purpose of computing this opportunity loss, but generally to improve the shopping cart experience and analyze your website performance. Here are the data you need:

1. visitors to the shopping cart page

2. percentage of new and existing customers (account holder) who reached the shopping cart page

3. unique clicks on forgot password link

4. average order value (AOV)

Here are the  supportive research for this method:

a. Forrester Research reports that 23 percent of online users do not buy online because they have to register with a site before purchasing. So, you could immediately deduct 23% of the site exits from the shopping cart page immediately.

b. Around 82% of people have forgotten a password used on a Web site

c. 75% of the people requested forgotten passwords never tried to complete the purchase once requested

Based on the above research here’s a possible flowchart of the process:

analysis of the opportunity loss due to non guest checkouts

Opportunity Cost Analysis for Online Shopping Carts

If a $458.550 loss doesn’t make sense to your boss, you must be working with company generation billions from online sales.

To simplify your work, here’s a excel file you could use to compute your loss. Please keep in mind that this forecasting model is a very simplistic one and it should be used only after analyzing the analytics data on from your account. The only way to accurately derive the loss is to actually run a split test, with and without registration requirements. Enjoy testing!

Pitstop Media offers ROI based internet marketing services such as landing page testing services and conversion rate optimization services. Our A/B and multivariate tests have helped companies increase conversion rates by as much as 75%. Let us increase your conversion rates, too!

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Traian is Director of Search Marketing at Pitstop Media Inc. He has more than 11 years experience in helping small and medium businesses generate and convert organic traffic from search engines. Connect with Traian on Google+. He is also the author of the Ecommerce SEO book.


2 Responses to “Guest Checkouts and Opportunity Cost Analysis – Part 3 of 3”

  1. Max C said:

    Feb 26, 11 at 5:55 pm

    Fantastic article, I’ve been busting my guts over the past few days studying analytics data and trying to figure out why people are not signing up on our property and flats to share site and your statistics just gets me squirming in my seat.

    Wish there was a way to convert a quater of those 23%!…Ours is even worse after registration, they still have to create a profile!

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  2. TraiaN said:

    Feb 27, 11 at 10:50 am

    if you know where you site suck at converting, that’s a great point to start testing.

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