$300 Million Button: making customers create logins to buy cost etailer $300M/year

"The $300 Million Button," Jared Spool's 2009 article on usability and ecommerce design, is remarkable in that it a) articulates something that anyone who shops widely online already knows; b) is advice that would make a lot of money for sites if they adopted it; c) has been part of the literature for at least two and a half years; d) is roundly ignored.

Spool is recounting the story of an unnamed large ecommerce retailer who had one of those forms that made you register before you could buy anything, and to remember your login and password before you could shop there again. Removing this form, and allowing the option of saving your details with a login and password at the end of the transaction, increased the retailer's sales by $300,000,000 in the first year.

From a commerce perspective, the Internet's glory is reduced search costs for customers. When I was making my office coffee table, I decided I wanted to source some brightly colored anodized aluminum bolts, nuts and washers. I'd never bought these before, but I assumed they existed, and I was right -- a couple searches showed me that they existed and were sold to motorcycle modders. I found a site that supplied them, and ordered sixteen of each, plus some spares. It was the first time in 39-some years I'd needed brightly colored bolts, and it may very well be that long again before I need any more.

So while this specialist bolt retailer is visible to motorcyle hobbyists and can compete for their repeat business with other specialists, they're also tapping into a market to whom they were entirely invisible until the net came along. Periodically, someone like me is going to drop in and spend some money on a one-off basis, and make windfall cash for them. There are a lot of people who, at some time in their lives, want to buy some specialized component or good. Before the Internet came along, we'd likely have just got the non-specialized equivalent. But because of the Internet, businesses all over the world are getting sales from the unlikeliest of corners. And what's more, some of those one-time only customers might discover that they actually really enjoy whatever the specialist thing is, and come back for more. It's win-win.

But the fastest way to alienate those customers and scare away that free money is to make its owner establish a relationship with you before s/he can make a purchase. In the case of the company that sold me my bolts, I was required to create a login and password, and I still get a fortnightly newsletter full of information I don't care to know about bolts (I checked all the opt-out bits, but either I missed one or they just don't pay attention to it).

Spool's research showed that a substantial portion of ecommerce users are even more sick of this stuff than I am -- $300 million/year's worth, in fact. And what's more, of the repeat customers who might have benefited from the faster checkout afforded by creating an account, 45 percent had multiple accounts in the system because they'd forgotten their logins, lost access to the email accounts they'd used, and signed up again with a new address.





The $300 Million Button

(via Beth Pratt)