order cancellation

How to Avoid Order Cancellation with Market Research

How to Avoid Order Cancellation with Market Research

order cancellation

All businesses contend with the negative outcome of order cancellation, some at far higher rates than others. 

Aside from canceling orders, some orders that go through wind up being canceled post-purchase, as 30% of all products ordered online are returned, compared to 8.89% in brick-and-mortar stores

Although it is expected for customers to return products, incurring this rate of cancellation is worrisome, as it represents almost a third of lost revenue. 

Unfortunately, order cancellation doesn’t merely occur within products, as it also rears its head in subscriptions. Nearly 40% of subscribers of any service type​ cancel in less than three months; over half of all subscribers cancel within six.

You can find the root cause of order cancellation, which almost always includes some customer dissatisfaction by conducting market research.

This article lays out order cancellation in its various contexts, its causes, how to reduce it through best practices and market research. 

Understanding the Contexts of Order Cancellation

As the introduction briefly touched upon, order cancellation doesn’t simply occur among product purchases. Instead, order cancellation refers to the abandonment of all products and services that your target market was in the process of buying, along with the reversal of already purchased products and services

In the case of the latter scenario, customers cancel an order they’ve already purchased or received, or in some cases, have already used for a certain amount of time, which often is determined by a business’ return window. 

Customers cancel their orders for many reasons. The root source of order cancellation is customer dissatisfaction, as the number one reason customers cancel an order is due to changing their minds. Customers can change their minds for several reasons and due to various situations. 

The key is to discover the causes of unhappiness among customers when interacting with your business, whether it stems from the products/services themselves, communication issues with your customer service team, or a lack of catering to other consumer preferences

To avoid order cancellation, you ought to fully understand the contexts and causes of it. 

The Causes of Order Cancellation

As aforementioned, order cancellation often occurs when customers experience dissatisfaction and unhappiness. These sentiments do not merely occur after customers have used a product or service, as various factors affect customer satisfaction and customer expectations.  

The following addresses common causes behind canceled orders, whether they are products, subscriptions, or other services:

  1. Longer Deliveries
    1. 38% of online shoppers will cancel their order if the delivery will take longer than a week.
    2. This rate declines when fewer days are required to wait for the delivery
    3. For example, 16% of customers will drop their order if the delivery takes 6-7 days; 15% will cancel their order if the delivery takes 4-5 days and 8% will abandon their order if delivery arrives in 3 days or fewer.
  2. No mention of a delivery date
    1. 24% of shoppers would cancel their order if the business they’re patronizing provides no delivery date
    2. Customers don’t appreciate being kept in the dark about when they’ll receive their purchases. 
  3. Unexpected Shipping costs
    1. 25% of online shoppers will cancel their order due to unexpected shipping costs added to the order just before the checkout. 
    2. In this respect, transparency is key, especially since it involves prices. 
  4. High Shipping costs
    1. 63% of shoppers abandon their orders due to excessive shipping costs.
    2. When customers abandon their carts, they often turn to competitors who offer the same or similar products or services, but at lower or no-cost shipping.
  5. Over-purchasing
    1. 30% of shoppers deliberately over-purchase and subsequently return unwanted items.
    2. 19% of shoppers order multiple versions of the same item, which they use to decide once they’re delivered.
    3. Certain customer personas are prone to purchase more due to income, lifestyle or simply to later compare products.
  6. Loss of interest or need
    1. This can occur among products or subscriptions, whether they are of the physical or digital kind. 
    2. An example of the former includes subscriptions to items, such as hobby items (arts and crafts, toiletries, etc.) and food deliveries.
    3. An example of the latter can include SaaS subscriptions or content websites, such as news sites, trade publications, statistics sites and market research publications.   

How to Avoid Order Cancellation with Market Research

Despite the many sources of order cancellation, you can reduce it by conducting market research. This kind of consumer research allows businesses to understand their target market in greater depth. 

By understanding all your customers’ wants, needs, interests, aversions and customer behavior, you’ll be in sync with your customers, allowing you to properly meet all of their needs. After all, the most ideal way to innovate, market and communicate with your customers is by knowing what they want and expect in the first place. 

There are various market research techniques that you can apply to understand your customers in greater detail. This involves researching their preferences surrounding checkout, shipping and all other topics that involve their placement of an order, whether it is digital or physical. 

stop order cancellationGiven that many cancellations occur before a customer receives or uses their purchases, many of these topics involve your customers’ UX, as they include the usability of placing an order and navigating your website and other digital properties. As such, you can conduct research on this aspect with the UX survey by using the proper UX survey questions

To better understand how easy or difficult it is for your customers to interact with your company at any touchpoint, you should use the CES survey, aka the Customer Effort Score survey. This survey involves using its titular score, which measures the degree or amount of effort that a customer puts into a certain interaction with a business. 

To reduce order cancellation, use it to study your customers’ at any touchpoint that involves an order, whether it leads up to it, or occurs post-purchase. As such, you can ask questions that inquire into ordering something online, over the phone, changing an order, dealing with customer service and more. 

Given that most order cancellations — especially those that involve customers changing their minds — involve customer satisfaction, particularly a lack thereof, you should conduct the customer satisfaction survey and its varieties. 

This survey allows you to dig deep into various aspects of the customer experience in which customers can rate their satisfaction, as well as sound off on what went amiss, what they liked and didn’t like, along with the possibility of providing a recommendation. As for the latter, the best bet is to send an NPS survey (Net Promoter Score Survey), which uses a scale of 1-10, in which customers rate the likeness of their recommending the company to others. 

There are various other kinds of surveys you can use to reduce order cancellation, such as the customer experience survey, which addresses various aspects of the CX. You can use it to zoom in on purchases, orders and customer buying behavior.

When to Apply Surveys to Reduce Order Cancellation 

Don’t forget to survey various customers at various points in their customer buying journey to retain them. When you retain customers, you’ll in turn build loyalty and stamp out customer attrition, therefore lowering the chances of order cancellation. 

The following lists when to survey customers and which points in the customer journey you should pay particular attention to minimize cancellations:  

  1. Customers who have saved items in their cart or wish list.
  2. Customers who have abandoned their cart.
  3. Customers who subscribed to a newsletter or other email messaging service.
  4. Those who have interacted with your UI or other digital properties.
  5. Those who have interacted with customer service, whether in-store, over email, phone, or chat.
  6. Those who made a recent purchase.
  7. Those who went back to change anything in their order, whether it is its quantity, a new item, change of address, delivery method, etc.
  8. Customers who are waiting on a purchase delivery.
  9. Customers who have canceled orders before they’ve arrived or have used them (includes both physical and digital subscriptions).
  10. Customers who have received and used their purchases for some time (ranging from a week to months, depending on their purchase).

Best Practices to Use in the CX to Stamp Out Order Cancellation 

Aside from carrying out market research, you should follow several best practices to minimize order cancellations. These will allow you to build loyalty by retaining your customers and therefore, the order that they make. 

The following list displays the best practices to use to curb order cancellation. It addresses the causes of canceled orders that were highlighted in the previous section. Once you use these practices hand-in-hand with market research, you’ll be on the right track to fostering retention. 

  1. Avoid long delivery times.
    1. Offer quicker delivery options, such as two-day shipping, next-day and even same-day delivery if possible.
    2. This will give customers various delivery choices which they can choose based on their spending power and the urgency of their purchase.
    3. Today’s customers have grown accustomed to rapid delivery options in e-commerce. 
    4. If a business cannot meet that demand, customers will turn elsewhere to buy from a business that can.
  2. Always include delivery dates.
    1. Never leave customers wondering when they’ll receive their items or subscriptions.
    2. Creating uncertainty will only taint their perception and trust in your business.
    3. If you’re not sure because if the delivery service you use isn’t certain either, offer an estimated delivery time.
      how to avoid order cancellation
  3. Be upfront with all shipping and delivery costs.
    1. Aside from hiding the date of delivery, omitting shipping and delivery costs is a major mistake.
    2. Customers want to be in the know of how much they’ll be charged.
    3. Whether you offer a few, a single, or various delivery options, always include all the fees involved.
  4. Keep shipping and handling costs low.
    1. Consider the fact that most customers are investing in your products and services. As such, they will want to keep shipping fees to a minimum.
    2. Additionally, customers have become accustomed to free or discounted shipping fees that many companies offer. 
  5. Offer as many details of each product and service to avoid over-purchasing.
    1. Avoid customers who purposely over-purchase for comparisons by providing detailed product and service copy.
    2. Never allow your end-users to wonder how one item differs from another.
    3. Accentuate all the benefits of each product and service.
  6. Constantly survey your target market to understand their needs and interests better.
    1. This will allow you to innovate appropriately and use data for decision-making properly. 
    2. Study your customers by breaking them down into distinct segments via market segmentation.  
    3. Study them further by analyzing and catering specifically to customer personas. 
  7. Personalize the customer experience.
    1. Build marketing personalization campaigns, as this is a known method for retaining customers.
    2. No one likes to be marketed to; instead, personalize the CX via market research efforts.
  8. Implement various customer retention strategies.
    1. Retention is far more important than customer acquisition, as it costs less and reaps more value. 
    2. Increasing customer retention by 5% can increase profits from 25-95%.
    3. Conduct the customer retention survey to understand customers better and retain them.

Retaining All Your Business

You’ll need to work towards retaining your customers to minimize order cancellation significantly.  Conducting market research plays a major role in both matters, as it allows you to informatively serve your customers by understanding all of their wants, needs, dislikes and sentiments. 

Each customer segment is different, both in terms of its demographic and psychographic makeup. To hyper-target your customers, both as a means of researching them and satisfying them, you’ll need to use a strong market research platform.  

Use an online survey platform that makes it easy to create various consumer surveys. It should offer random device engagement (RDE) sampling to reach customers in their natural digital environments, instead of pre-recruiting them. This removes social pressures in their responses, cutting back on survey bias.

You should also use a mobile-first platform since mobile dominates the digital space and no one wants to take surveys in a mobile environment that’s not adept for mobile devices.  

Your online survey platform should also offer artificial intelligence and machine learning to remove low-quality data, disqualify low-quality data and offer a broad range of survey and question types.

Additionally, it should also allow you to survey anyone. As such, you’ll need a platform with a reach to millions of consumers, along with one that offers the Distribution Link feature. This feature will allow you to send your survey to specific customers, such as those who placed a recent order, instead of only deploying them across a vast network. 

With an online survey platform with all of these capabilities, you’ll be able to reduce order cancellations and retain all of your customers.