Guest Checkouts and Opportunity Cost Analysis – Part 2 of 3

Guest-Checkout-2-3

This is the second part on the monetary opportunity cost analysis for guest checkouts series (read the first part here).

For the next two parts I will describe a couple of methods that can be used to derive the opportunity loss due to “locked checkouts” – I don’t like to coin terms, but I couldn’t find a suitable replacement for the term “non-guest checkouts”. To cut a long story short, a locked checkout is a checkout that require visitors to login or create accounts to finalize the purchase.

The first described method (which is the one I preferred) will generate more accurate results and will be based on real numbers, while the second is more a forecast based on, well, approximations.

The approach described in this article is the only way to compute the exact monetary gain/loss of the guest checkouts and it is actually a split test strategy. You will set up an A/B test, with a conservative split of the traffic, e.g. 90% of your visitors will see the original checkout process (the version that requires registration) and 10% of the visitors will go through a guest checkout. The conversion page will be the thank you page/receipt page. Keep in mind that to use this method you will need to be able to split the traffic, to two separate paths (URLs).

Let’s suppose this is the first page your visitors will see after clicking on the Proceed to Checkout button. This will be the original (A) for your test. Let’s take a look at how we would modify a real page (books-a-million.com)

books a million non guest checkout

Books-a-million Sign In page

For the variation page (B), you could rename Create New Account to Guest Checkout:

books a million guest checkout

books-a-million Guest Checkout

If you’re not having a re-marketing strategy in place, don’t ask for a password or email ID until the end of the process, on the receipt/thank you page. On that page don’t forget to offer an incentive for users to sign up (10% off for the next purchase, personalized offers for members, etc.)

A very good example is actionenvelope.com, where you can buy as a guest and at the end of the purchase you can create an account:

action envelope thank you page

actionenvelope.com Thank You Page

You’re almost done. Compare the results by analyzing at the revenue and conversion rates generated by each of the two paths you’re testing.

That’s all folks! It’s not really that complicated (except for convincing your boss), all you need is the courage to do it and some chips and soda for the IT guys :)

Bonus: Another useful metric to compare is the number of visitors you lose at the sign in page (create account VS proceed as a guest).

In the third and the last part of the series, I will describe how you could derive the opportunity loss for guest checkouts, without actually implementing a split test.

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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About

Traian is Founder and 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+