Thanks to Jumia and Konga, we can now buy something online and expect it will be delivered free of charge. The best part about Pay on Delivery is that we don’t even have to worry about paying for the good if we don’t like it anymore. Meaning that we can simply change our minds, anytime.
This leads to impulse decision which you don’t have to back up with your money. This is because, as CEO of Gloo.ng said; “ the two AAs have spoon-fed us” and the Africans in us also got the better of us to believe that “seeing is believing” before we part with our money.
But, as a startup, imagine your delivery guy showing up once, twice and three times to deliver an already ordered item only to be turned down; being told that the item is no more needed. The pain is that your bootstrapped startup and the unlucky delivery guy just incurred another negative expense. Shame ☹
I don’t have any data to back up how often this scenario happens, but I am not the only one pissed off by it. One guy who is pissed off with this fragmented process is the CEO of Drinks.ng. He shared his thoughts on a recent interview. I agree with him that the eCommerce business model of Free Shipping and Pay on Delivery bleeds the startup of cash and can kill your business in a flash.
Do you agree? You should, if you run one
So how do turn your business model around?
How do learn to ask your customers for money before you send their orders? How can you give them an irresistible offer that Pay on Delivery will not matter again?
Let me divert: I want to “show” you something……..
You see, one of my mentors was sharing in a seminar that one of the best ways to sell is to change people’s belief and then pitch your product to sustain that belief or make it as the fulcrum. So, if you want to sell a drug to a HIV/AIDS patient; first make him believe it is curable; then shown him your drugs. Simple. Let see how these two eCommerce guys use this super smart marketing principle.
The Indoctrination Manoeuvre
When the guys at Supermart profiled their customers; they made them believe that they are high-class who should consider SPEED of delivery because of their busy lifestyle. With that understood, it is easier to ask them to pay before the orders are sent. People will pay for speed.
Recently, Supermart started a subscription programme that provides free monthly delivery for all orders. This is similar to Amazon Prime, a model that increased consumer purchases by 6X and was reported to have disrupted the consumer path to purchase and altered the competitive retail landscape in US.
One more thing; I love almost every issue of their email marketing. Psychologists know that the easiest way to make someone part with his money is selling you a dream. These guys do that every morning. Their mail hits my mailbox 5:47a.m each morning. With those emails, they have put me (and you) in the buying mood. Then it becomes easier to make us part with our cash before we see the goods.
The Money-back Guarantee
I read about Gloo.ng in a recent interview and love what they are doing with their subscription model. It is so tempting not to join it.
Take for instance, for every item on the store, there is a special price for the VIP buyer.
Secondly, do you know how effective a money-back guarantee is to your customers? With a guarantee, you are assuring that whatever happens you have their back, even at your own loss. Customers like that a lot. Statistics showed that guarantee is ZBCD. That’s the message Gloo is sending with it Insanely Easy Returns program.
Let’s assume you have products which are in short supply and will be available over a short period of time, you can get your customers to pre-order and frontload this with massive benefits and bonuses that are exclusive to early payment.
Borrow a leaf from Crowdfunding campaigns and see if customers will love to have exclusive bonuses and the benefit of low prices. Take for example, this product that generated almost $1Million dollars in pre-orders by leveraging Kickstarter.
Let’s be realistic, consumers have their worries too. It is deep seated in our beliefs. What smart businesses do is not to waive aside these concerns but to address them well.
Are you surprised that the co-founders of Supermart were once with Jumia (in fact, they are the same guys that pioneered PoD at Jumia. So, how were they able to transition effectively?
Fagbure explained that building and sustaining trust is the single leverage that helped them to transition from a PoD to asking for cash.
5 ways to build trust for your platform.
Let them know they can have their money back: have a clear return terms and polices that is user friendly.
Address psychological objections ahead by curating testimonials of satisfied customers and user success stories.
Your website design should communicate trust. A Research by Gartner shows that websites rank as the most important factor for marketing success. Based on this, you want to optimize your website for mobile as over 55% of ecommerce now begins on the Mobile device.
Offer clear payment options
Offer your customer an instant easy option to pay for your products. If you are bootstrapping, you can try out Paga, SimplePay and VoguePay. VoguePay has this additional benefit of having several tools for developers and free integration plan for multiple CMS including WordPress, Drupal and InstaCart.
Sell over email
Most people don’t buy on first visit. So you should develop a system to collect their emails and nurture them through your sales cycle. Use email marketing to indoctrinate your prospects. Nowadays, there are technologies you can use to send behaviourally targeted emails to coincide with the actions of your users; for example, you can have a series of emails targeted to someone who abandon her shopping cart without checking out or you can use email for customer on-boarding.
These are all my thoughts…….what are yours????
(For a related piece on the topic: read Yinka’s treatise)
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Nigerian startups raised $377m in 2019, more than twice what they did in 2018. Find out more when you download the full report.
Wole Ogunlade is a business growth strategist for early-stage startups and consultants in Nigeria. As co-founder of Probityfarms.com, he is passionate about agTech platforms in Nigeria. You can download his free ebook + email course, “11 Secrets of Startup Growth” for free on his personal blog, Hackgrowth.ng