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Sewing Up Online Offers
Test to understand what compels customers to convert.
For the rest of the November 2005 issue of CRM magazine please click here
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The arts and crafts business isn't all scissors and paste, especially when it comes to figuring out what customers want to buy. "From an operations perspective it's a very ugly business," says Linsly Donnelly, COO at Idea Forest, which owns and manages specialty retailer Joann.com. "It's hard to predict what someone will want to do next." The company believes in running ongoing Web-site tests, but the cost of implementing and managing testing in-house was IT intensive and prohibitive, and basic A/B testing added no extra value compared to multivariable testing, Donnelly says. So Joann.com tried Offermatica's hosted testing and optimization service in its most highly trafficked niche: sewing. The service was up and running in a few days and Offermatica worked with Joann.com to help the company understand the different kinds of testing that it could conduct. They brainstormed over what elements were interfering and what messages and promotions were missing. The first test was designed to help Joann.com understand which onsite promotion, either free shipping or buy two sewing machines and get 10 percent off, was the more compelling offer, according to Matthew Roche, Offermatica cofounder and CEO. Joann.com believed the former would be better received, because people don't typically buy two machines at once. The obvious answer isn't always the right one: The company was surprised to discover that the two-machine deal performed better. It increased conversion rates by 30 percent, drove an increase in average order value of 137 percent, and improved revenue per visitor by 209 percent. It turns out customers were teaming up with friends to purchase together. "Guessing just doesn't work, so it's critical for companies to run tests in order to understand what content compels customers to convert," Donnelly says. "With each test, there's a winner that surprises me."
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