I’ll admit that I’ve never used an e-check or even paid cash for an online pur­chase. The clos­est I’ve come is link­ing Pay­Pal to my check­ing account.

But today I read an Inter­net Retailer sur­vey sug­gest­ing that 50% of online mer­chants now accept alter­na­tive pay­ment meth­ods such as e-checks, cash, and deferred billing. And that in some cases, these pay­ment meth­ods amount to 20% of their total online sales! Go fig­ure. Equally inter­est­ing, the sur­vey found that more and more mer­chants expect to offer alter­na­tive pay­ment meth­ods to con­sumers who may have — until now — been gun shy about eCommerce.

But what really sur­prised me was that 30% of these retail­ers *didn’t know* if offer­ing alter­na­tive pay­ments increased their sales. In this day and age of web ana­lyt­ics, one in three retail­ers sim­ply didn’t know.

This stat is the inspi­ra­tion behind today’s blog on offer­ing alter­na­tive pay­ment pro­grams and how to eval­u­ate their success.


For­tu­nately, with Omni­ture Site­Cat­a­lyst, eval­u­at­ing pay­ment pro­gram suc­cess is quite easy. When cus­tomers are going thru the check­out process, pass the name of pay­ment method into a Com­merce vari­able. For exam­ple, if the cus­tomer selects “Mas­ter­card” on the billing infor­ma­tion page, then pop­u­late your Com­merce vari­able with “Mas­ter­card”. If they select “e-Check” or “Pay­Pal”, then pop­u­late the vari­able with “e-Check” or “PayPal”.

Do this when the cus­tomer has actu­ally selected the pay­ment option — not when they’ve finally ordered (on the Thank You page). This will make it much eas­ier and more valu­able to you.

Now, ensure that your Com­merce vari­able is set to expire after the Visit. Cus­tomers are so deep in the con­ver­sion fun­nel by this point that you do not want the noise from multi-session con­ver­sions (of course, you could ded­i­cate a sec­ond vari­able to this if you were really interested).

Great, you’re done. See how easy was that?

By doing this you’ve now opened a world of analy­sis pos­si­bil­i­ties. You can quickly view how much rev­enue each pay­ment method con­tributed. But this alone shouldn’t be your deci­sion criteria.

Cre­ate a new cal­cu­lated met­ric that com­pares the rev­enue to orders, i.e. the aver­age order value. Cre­ate another met­ric called “Pay­ment Con­ver­sion” — this should be defined as Orders/Instances (of the Com­merce vari­able). Now, build your report Pay­ment Method report to show “Instances”, “Pay­ment Con­ver­sion”, “Rev­enue”, and “Aver­age Order Value”.

Com­par­ing each pay­ment method across these four met­rics will allow you to read­ily under­stand the effec­tive­ness of each option. From this infor­ma­tion, you can run sequen­tial (time-based) AB tests, or split-run AB tests (par­al­lel flight) to iso­late the full con­tri­bu­tion of each pay­ment method.

But don’t stop there — because you’ve pop­u­lated each pay­ment method as a Com­merce vari­able, you can deter­mine which prod­ucts peo­ple are pur­chas­ing under each method. Is this expand­ing your reach? Is this increas­ing cross-sell oppor­tu­ni­ties? Great ques­tions that you can now answer.

Next, do not be shy about tying this to cam­paigns. You may find that under­per­form­ing affil­i­ates or key­word cam­paigns were just frus­trated vis­i­tors look­ing for alter­na­tive pay­ment methods.

Finally, check out cus­tomer life­time value and recency of pur­chase. Credit card pur­chasers may be quicker to pur­chase, but which pay­ment type is attract­ing the most valu­able cus­tomers? How are their behav­iors dif­fer­ent? How can you exploit these dif­fer­ences to deliver more value? More great ques­tions that you’re now in an excel­lent posi­tion to answer!

As always, if you have ques­tions about how to improve your online suc­cess, please do not hes­i­tate to con­tact us.

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