July 13, 2010

Removing friction to increase sales (Amazon Prime example)

Making any part of the buying process easier, i.e. removing friction from the process, will drive sales.

The first version of an e-commerce web site or a media site with a paywall in-front will always have a lot of friction. But with active work a site often double its sales by communicating unique selling points better, making sign-up and payment pages easier to understand and adding additional payment options.

Often most of the work to remove friction is done on the web site, but just having moved to the U.K., I've been able to try Amazon Prime, a way to remove friction from the final stages of the buying process by doing away with delivery costs for individual orders.

By paying Amazon an annual fee of £49, a customer gets next day delivery of the things she buys from Amazon.co.uk without a per item delivery charge. It combines quick delivery and no variable cost.

While Prime is only useful for customers making about 10 purchases or more a year, to those customers Prime takes away the need to even consider delivery costs. The price you see is the price you pay. No extra attention required. Less friction in the buying process after you've found a product you like. For a repeat customer, the process becomes as simple as buying an iPhone app and that must be a good thing for sales.

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