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🪄 The magic formula of guided selling

Written by
Simon van Duivenvoorde
Published on
15/1/2024

With a simple formula, at Aiden, we work with all our online stores towards a much healthier e-commerce dynamic.

At Aiden, we use a simple formula against which we test (almost) everything. From new features for our guided selling software, to measure success among our customers (online stores). This formula gives us direction to think and act. Without such guidance, it is easy to get distracted by urgent issues that are not so important, while less urgent but more important things are often pushed forward.

The formula?

Value = Investment x Impact

Okay, it's not rocket science 🚀, but beauty is just the simple thing.

Our starting point is that we should do as much as possible value want to create for our customers. Because, in our opinion, a lot of value = happy customers.

What determines that value? Well, what it costs versus what it brings in. We call the one investment, the other the impact.

Well, go ahead. We're making it even more exciting. Indeed, both parts of the formula have their own sub-formula. The investment consists of the license that you pay and the time that you lose to make, integrate, maintain and improve decision aids.

The impact is determined by the effect that they have decision aids (e.g. better ones) conversion rates, or less pressure on the customer service) and it reach of those decision aids (what percentage of your customers use a decision aid).

So this is what the overall picture of the formula looks like:

Why and how do we use this formula in practice? Well, the formula is at the heart of all three Aiden teams:

  • It product team tests the roadmap against it. For each potential new feature (e.g. a customer request), we ask ourselves: Will it take less time to create or maintain a decision aid? Does this increase the effect or reach of a decision aid? And what should stand in return? Is this feature for everyone, or only for a certain license level?
  • It customer success team tests the customer relationship against it. At every onboarding, analysis call and strategic session with customers, we use the formula to see if Aiden adds sufficient value. Are we unsure? Then, together, we will look at which buttons we can turn to lower the investment and/or increase the impact.
  • It sales team tests new customers there. Not all web shops are a 'fit' for Aiden. When we start working with a new shop, we need to be sure that we can build a lasting relationship. Early discussions about the financial investment, for example, are often an indicator that people are not on edge enough.

How does that work exactly? Let's go through the parts piece by piece.

Investment: What does it cost?

Well, the most obvious is, of course, the license that you pay as a webshop to use Aiden. It is easy to quantify and is quick to pay for (“this does not fit the budget”, “this is cheaper”).

However, just looking at the licensing fees is incomplete. The scarcest asset isn't money, it's time. However, time is more elusive and difficult to express — and is therefore often spent more easily than euros. So let's zoom in on both.

License

You pay a license for our software. The amount depends on how many decision aids your webshop needs.

time

Creating - and maintaining - a decision aid takes time. Precious time. Time that you can also invest in something else. And such a decision aid also needs to be integrated into the webshop. In several places. So he has to join the sprint, where he has to compete against other features, projects and issues.

So it's important that everything takes as little time as possible. Specifically, your decision aid software must therefore meet the following conditions:

  • The software must be easy to use. But really for everyone within the organization (versus, for example, only someone with specific experience/training or an IT background).
  • Because you've never made a decision aid yourself before, someone should be able to help you make the consultations. Which questions and answers are going to work well? Here you can think of a specialized conversation designer or a kickstart by ChatGPT.
  • Speaking of which: you want to automate manual work where possible. Examples include using rules to determine your advice logic, or automatically transferring 'new' products to the decision aid. Or, on the contrary, removing products that are out of stock.
  • It should result in as little work as possible for your (internal or external) development team. Does your decision aid require a custom front end? Then you'll just lose 80 development hours, if it isn't anymore. And last but not least: what are your update options once the decision aid is live? Do you also need developers for that?
  • There must good and well-organized documentation are, so that 98% of your questions have already been answered and you can continue building immediately. Without a trip to customer service or account manager.
  • The software has been designed in such a way that you actively save time on parts you didn't even know were important. Consider, for example, 'testing' the advice. In other words: which products are recommended in which scenarios? If you have 5 questions with 4 answer options each, there are as many as 1,024 possible outcomes. Let's say it takes you 10 seconds per “walk through” the selection aid; so you'll soon need 3 hours to check all the combinations. You don't want that!

time is therefore a component of the investment that should not be underestimated. Let's make this concrete using two scenarios.

  • Screenplay Aiden: a decision aid costs you 4 hours to make and 1 hour of maintenance per month and gives you €10,000 a month → 16 hours a year
  • Scenario Alternative: A decision aid costs you 12 hours to make and 2 hours of maintenance per month and gives you €10,000 a month → 36 hours a year

So one scenario costs you an extra 20 hours a year. And you probably don't want one choice aid, but eight. Or forty. Or forty-eight. So that's a nice touch.

And then we assume that the revenues are the same in both scenarios. But that is not the case. So let's broaden our view and see what decision aids offer us.

Impact: What does it mean?

A lot!

The impact of decision aids is enormous. E-commerce is fundamentally flawed* and decision aids are a fantastic, pragmatic way to change that dynamic.

*The short version: e-commerce is about products, while it should be about people. Consumers are looking for a solution for their problem, situation or need and not for a (list of) product (s).

Exactly what it gives you is determined by how customers behave after using a decision aid, how many people use such a decision aid and how you (the webshop) make the decision aids work for you.

Effect on your customers

With a decision aid, you can bring the advice from the physical store online. You take people by the hand and give them the tool (s) to make the right choice independently. This ensures:

  • Better converting customers: After all, it's easier for customers to find the product that meets their wishes and needs. Our data shows that decision aid users convert at least 40% better.
  • Less customer service pressure: Customers who are well served online no longer need to call, email, or chat with your customer service for advice.
  • Fewer returns: Good advice ensures that customers buy products that are well suited to their wishes, needs and situation. This results in a lower return flow, because customers are less likely to buy the wrong product.
  • Less price-driven sales: Who doesn't recognize the feeling that, after visiting a physical store, you still come home with a slightly cooler version of the product than what you originally planned to buy? Chances are that this was because of the store employees who helped you choose. After all, good advice is about your wishes, needs and situation. By plotting it on the product range, the price of a product is suddenly much less central.
  • Happy customers who come back more often: The number 1 webshop in NL is the one with the most products and the most price competition: Bol.com. Number two? The one that is most customer-focused and “Does everything for a smile”: Coolblue. (Which, by the way, make extensive use of decision aids that also have a much better can — Pieter, call us!). Good service and expertise has always been a distinctive proposition. Customers are willing to pay for this and they will come back for it. So ask yourself: do you want the Bol.com or become the Coolblue of your category?

Scope of decision aids

Employees in a physical store that you can't see (“are they there?”) — as a customer and as a store, that's of little use. Especially when they are there. This works no differently with decision aids. If you want your customers to benefit from the convenience of decision aids (and you want to; see the effects above ⬆️), you want them to be prominent to customers in the moment that matters to help.

So you don't want to put one choice aid for one product category in one place. This gives only a limited number of customers the opportunity to seek advice and dilutes the effect.

So to maximize the impact of decision aids, you need to maximize reach. And for this, you need a tactical success and deployment plan. What should be in it:

Which decision aids do you want to make and in what order? To do this, read:

On which webshop pages are you going to place your decision aids? To do this, for example, read:

Do you follow these steps (with our help) and bid the doubter all relevant moments of help? Then our reach benchmark (in other words: how many customers use the decision aid in relevant product categories) is 25%. The turnover share is then even higher.

Effect on your organization

Decision aids help customers, but did you know that guided selling can also help your company? And not just because of increasing conversion.

Good decision aids are a rich source of customer insight that tell you exactly why customers buy. What are the problems they want to solve? Their goals? Their wishes? Their situation?

  • Are they looking for a protein shake for recovery after endurance sports or strength training?
  • Are they looking for a drill for regular professional use, or for home, garden and kitchen jobs?
  • Do they have pets or not?
  • Are they price-conscious buyers or does quality take precedence?

By having insight into what customers want to achieve by purchasing your products, you can run a much more efficient organization. This way, you can make better, data-driven decisions about the content of your marketing (e.g. which adwords to buy, which content articles to write, navigation choices, newsletter content) and product purchasing/development (if you understand what needs customers are trying to meet, you translate this to a relevant product offering).

Want to read more? Then check:

Value = Investment x Impact

Do you want to understand the value of decision aids? So you have to look beyond the licensing costs and the conversion increase.

The investment is not only about the euros you pay, but certainly also about the opportunity costs of the time it takes to make and maintain decision aids. What value (turnover, profit) can you achieve in that free time?

And yes, decision aids convert better, but for real ones impact we must focus on the scope of the decision aid. So that's what we do. On the one hand, by making it easy to integrate your decision aid in as many places as possible. On the other hand, by making a success and deployment plan together, with clear goals and benchmarks on conversion, returns and/or service.

In this way, together with all our web shops, we are working towards a much healthier e-commerce dynamic. And that is the real value!

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