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Last year, e-commerce retailers spend $21 billion, or 15 percent of their revenues, in online marketing to drive traffic to their websites. The end result — a dismal 2-3 percent conversion rate between visitors and sales.
Mountain View startup Runa, a provider of revenue growth and profit maximization solutions, is looking to help e-commerce retailers to change low conversion rates with the launch of their new conversion marketing solution. The new web application focuses on converting web traffic into sales while shoppers are still on the website. By determining a consumer’s buying intent, Runa helps to deliver more effective personalized sale price incentives in real-time.
Here’s an example of how an e-commerce site might use Runa: Say you’re shopping online and you decide to choose a new table for your kitchen. As you proceed to checkout, you suddenly decide you want to shop around. As you click to leave the site, a real-time pop-up appears offering you a $60 discount if you agree to buy the item now. By agreeing, the $60 is taken off your total price at checkout. A demo on the site refers to this as a “cart abandonment campaign.”
Runa works closely with the e-commerce retailers to determine goals and what they call “business rules.” These rules are pre-determined by the retailer to decide the individualized pricing each type of consumer will receive. Individualized pricing can take several forms including discounts, free shipping, buy one and get one, free specials or no tax.
Conversion marketing is not a new concept. Companies like Omniture, who provide rich data to customers on consumer behaviors, and RichRelevance, specializing in product personalization and relevance, are helping e-commerce retailers find ways to increase sales (there are a number of other companies with similar goals, too). Both companies lack the real-time benefits but are valuable in compiling data over time to help campaign efficiency.
Not convinced? Runa service is offered on a pay-for-performance basis, which means that e-commerce retailers don’t have to fork out any up-front costs, making it a low risk option if they are looking to jack up sales just in time for the holidays.
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