8 A/B Tests That Actually Generate Profit For Your DTC Brand transcript

you know you should be doing conversion rate optimization for your e-commerce site your DDC site you should you're right you should do it and so right now what I want to jump into is eight split tests AB tests you can and should run right now that can produce real profit growth for your business and let's jump into the first one right away split testing your product page your PDP okay uh you should be split testing your PDP and the mistake people make with almost all split testing including with pdps and this is going to apply to everything I'm about to say all right is that people make small little changes instead of major major changes to their material and they they think they have to behave like scientists where they go and like tweak one little thing and measure it and see if it works like what I want you to think about instead is that the the reality of testing your PDP your product page is that your product page is very close to the point of purchase for a customer and for a lot of customers now you should be thinking specifically about the difference between new and returning customers when you're thinking about this who are you trying to appeal to um probably especially trying to think about how new customers respond to PDP changes but the reality is you should be thinking about content overhauls in your PDP because if you think small on these things you small changes and small tests will lead to incremental and small results like disregard any story you've heard about how changing the button color gave somebody a 30% conversion rate lift that's wrong it didn't happen I guarantee you that story is not true that's not how the world works button color changes don't overhaul your performance for your PDP think about the reality that your PDP is meant to appeal to a very broad range of customers because it is the place where all customers at some point go in the shopping Journey basically and uh and therefore um therefore it has to appeal to a lot of people and think about what do what information do those customers need to make a purchase I would focus especially on Clarity and I would focus especially on the image Carousel and I would think about overhauls to these things and messaging overhauls maybe even full redesigns for PDP stuff um because because um first of all uh everybody who has ever looked at any uh screen recording of pdps and how customers uh interact with pdps all learn the same thing okay which is that uh overwhelmingly customers scroll the carousels before they do anything else so the carousel the image Carousel has outsized value in the potential value can create outsized opportunity for for creating value on your website okay uh so start with carousels because everybody swipes through those things and think mobile first again probably something that applies to everything else I'm about to say so mobile first start with carousels and think about Clarity what information does the customer not have that they need to have to make a purchase and if you start there with your PDP you can make big big wins I actually once had a brand that simply added an image that just clarified some elements of the product when I worked with Goods we made wallets out of old baseball gloves we added an image that showed which parts of the wallet were made out of regular leather and which parts were made out of an old baseball glove it really improved performance overnight and it wasn't about convincing people these were good or anything like that it was just adding imagery that had callouts showing which part of the product was which and we added that to the PDP it made a huge difference okay that's the kind of thing to think about how can I work with um words and images to be clearer and maybe even wholesale um redesign now a whole redesign can be a huge job so it doesn't have to be that that's why I say carousels and major headline copies stuff like that can make a really big impact but think about what are your customers telling you about the product what they love about the product how do you make that clear in the carousels Etc run the split test see what happens okay so that's number one test your pdps it's very close to the point of purchase so it has outsized impact okay number two your total sitewide offer okay your sitewide first purchase offer now the classic one that eCommerce Brands run here is uh like 10% off right so it's like your email popup and it says you know if your new customer get 10% off uh by signing up for your email today now that's not just a popup offer that's the thing that offer often is expressed somewhere else on the website or um really carries all the way through the cart Etc and I want you to think think about this not as a popup test but as an offer test okay the popup is just a mechanism for conveying that I want to talk about pop-ups in a little bit but I want you to think instead about sitewide about offers in general and and how you can do this especially if your product lends to bundling or to ordering more upfront think about how maybe larger percentages off over time larger percentages off as your cart gets bigger creates potential value for the customer and pushes cart size up and profit up okay uh so this can be a really big deal especially because so much of the margin in e-commerce is eaten up by shipping uh and shipping is has an outsized cost for the first thing you ship it's pretty much going to cost at least four or five bucks to ship near anything in the US that is an e-commerce product like it's just really hard to get under that price point you know unless your product is extremely small and extremely light but at at at the very least it's going to cost something like that so if you get like less than one pound of stuff in a package it's going to be about that much okay but if you can get above one pound or if you can get more products forget above one pound if you can get more products into the order then what will happen is it will cost you another 50 cents or a dollar or something like that in price but it will be like a meaning but but that percentage will be much lower as a percentage of your total margin like for example imagine that your that your aov is $50 okay and you can push it to 60 okay and it cost you $5 to ship that $50 order if you can push your um aov up to 60 and it only costs you the same amount or even um only a little bit more on the actual shipping side after that first thing all right number two uh I want you to think about the sitewide first purchase offer okay sitewide first purchase offer and and the classic one that e-commerce Brands run here is 10% off for new customers they'll put that on their email popup or whatever but what I'm not talking about really is the email popup itself I actually do want to talk about that in a little bit but the email popup itself is not the email capture popup is not really a thing I have in mind here that's just a mechanism for conveying that offer okay what I really want to think about actually is what the offer itself is particularly for Brands where there's some kind of upsell add-on or bundling or buy more save more that can happen right like I've seen Zack stuck talk about how he makes big offers on if you add more and more pairs of socks for his sock brand uh that uh that you add more pairs of socks um he gives you a bigger discount because uh there's a real um economy of scale for him in make in shipping more stuff at once okay that's really common for Brands shipping costs have economy of scale built into them fulfillment costs um you know even pick and pack all those things and so you can get a lot of margin back including offering value to the customer and you can make each customer's order a little higher push up your aov and get more contribution dollars on that first purchase if you can push people up it can also just be something that converts better if you get a better offer in place offers have outsized impact in General on the brand again this is very close to the point of purchase um I mean is the point of purchase really and so thinking about how you bundle and um and do like uh uh buy more save more kind of offers for the right kind of brand can really make a big difference on the other hand some brands do 10% off and really don't I've heard Drew sonaki another player has been in the space for a long time talk about how the first thing he would used to do when he would run e-commerce Brands is he would get rid of their 10% off offer because it was what he found was that it was giving margin away to people who were going to purchase anyway and so all it did was just hurt his margin that can go in either direction depending on your brand and you should be testing that okay so think about what your first purchase offer is and how you do it so number one PDP number two sitewide first purchase offers let me pop in and say right here that you should be using intellig to run all the tests that I'm talking about in this episode almost all of them not quite all of them but almost all of them including running offer tests there's a lot of things I love about intellig gems but in my view it is the cro software of record for Shopify stores it is what uh nearly every one of my clients is using intellig gems to split test things on their site and my clients who are growing fast which is actually most of them um they are constantly testing new stuff all the time to see if they can figure out how to make uh create more value for their customer and then generate more value in return and intell is the software to do that with it is incredibly easy to set up it's also incredibly robust you can test basically everything I'm going to say on this episode with intell jams and crucially and this is the really important part if you think about the offer test I just suggested there's a tradeoff here between um conversion rate aov or Revenue per session and margin per session if you give an increasing discount to some customers and you convert more customers right that's fine that you convert more customers but there costs you margin to Discount and the beauty of intellig is you can plug it into all of your Shopify data and it will measure the performance of your split test not just on the basis of aov not just on the basis of conversion rate but actually down to the level of profit and that is crucial so that you can actually be optimizing your store for profit if you don't know where to start with the test that I'm running in this episode go to intellig go to intellig doio get started there today all right test number three price okay listen this is kind of like offers sitewide first purchase offers but I'm going to isolate it because because there is no single decision that e-commerce operators make that has a larger impact on their stores that is made less thoughtfully and less rationally than price I mean you pick your price and it really really matters for how customers interact with your store price has a huge impact and it also really really matters for your margin right one way to get more margins is to raise the price but the reason you don't do that right now is because you think customers are going to revolt or they're not going to convert as much or whatever and so you pick a price out of thin air you haven't done I guarantee you I guarantee you most of the people watching are listening to this have not done a major price study they haven't played around with a couple dollars here and there they haven't even thought about maybe a $20 price change or a $50 price change and it may be possible that your customers are both are either more or less price elastic than you think this is a huge impact on your business the price of your product is a huge impact on your business and if you're a d Toc brand you should be split testing price as long as you have enough traffic to do it basically uh you should be split testing price to see where the optimal point is where the tradeoff is between percentage between higher price lower conversion and lower price higher conversion in in the dream world higher price higher conversion because price does signal value again no decision that is so large for the brand gets made less rationally than this I also see people really really worry that if they um test the price or change the price customers are going to be so mad they are not going to be they are not even going to notice they're so much busier than worrying about your store test your price I am planning on launching a brand I'm working on it right now I am planning on basically from day one split testing my price into Oblivion because uh I want to understand I have a pricing strategy for it I know what I want to start with but I really want to see what the trade-off is between uh price and conversion rate and margin and conversion rate Etc it's a huge deal if you're optimizing for profit test your price okay number four I mentioned it before but the email popup okay now I this is another thing where like building a large own audience is actually a big deal and uh and there's all kinds of things you can do with email and this is another thing that people move through really fast and don't run consistent split tests on I really think you should be testing your email popup and there's one test I want you to try right now okay if you're not doing it already and it's um the micro conversion get them saying yes test it's very simple I'm going to put a version I'm going to put a illustration of it up on the screen here so you can see what I'm talking about if you're watching this and not just listening um but I'll try and describe it if you're just listening okay um you might have seen this right an email popup where there's a first screen a sort of pre- popup question and it goes like this let's say you're doing a 10% off for new customer's offer okay um it would say do you want 10% off on this product yes or no and then the person clicks yes okay uh and then after that then it says enter your email address and then you go to the SMS part of it as well now this sounds like it's adding a step which is going to hurt conversion but over and over and over again in my experience the actual thing that happens is that increases the conversion of your email pop um for all kinds of potential reason that salespeople have written about Etc it just does seem to work I really recommend you try that if you haven't already it's really simple um almost all email popup software can support that kind of um email popup and and can support that kind of uh sort of pre- email capture question so go check that out right now and if and beyond that try other email um email capture you should be doing that all the time it's just kind of a no-brainer usually it's free for most email software um so you should doing that okay number five another really obvious one but I still want to talk about it landing pages for ads okay and there's a couple things I want to say about landing pages for ads okay first of all if you know my content at all you know that I love manual bidding on meta ads okay and that is true I do love manual bidding for meta ads but I find that con that um split testing Landers doesn't very doesn't work very well in meta ads so while I launch all kinds of creative upfront in my meta ads if you don't understand what I'm talking about maybe a good place to start with some of my content would be AJF growth.com beardbrand to see my opening the books with beardbrand talk about how I build an ad account from the ground up but um but running cost controls testing all kinds of creative by just letting meta use basian forecasting to um to not split test right I really resist split testing at the ad level it's basically impossible to do that but at the Lander level for a bunch of reasons I think meta is a uh split testing conversion rate based um performance uh performance efforts in in in meta ads in the dash dashboard itself is actually not a very good way to use the dashboard because of the way the machine learning seems to work okay so um so instead split test it on the back end and this is where also like there's all kinds of things that you learn split testing landing pages that um that are surprising like here's one sometimes landing pages make zero difference at all like you could actually eliminate the landing page send the traffic to the PTP and stop worrying about um creating a landing page for every ad you run or something like that other times it makes a huge difference another thing you could test is like running straight to checkout from your landing page um another one that I see is that people sometimes don't know whether they should send their traffic if they're not running landing pages to the PDP to the collection page to the homepage um the results there can be really surprising and so um just splitting your traffic on on the back end of it to each of those different places can make sense or even to like sort of pre-built collection pages that are sort of almost like landing pages but they're they're really specific sort of AD Lander collection Pages you could do this endlessly and I think the way to do it is in thirdparty Split testing software um building thoughtful um thoughtful funnels doing that uh split testing your landing pages most a lot of people know that but people still don't do it again I will say the same thing I said at the PDP level here when you do this resist the urge to make small changes make big changes make major overhauls don't worry about changing one headline and wondering if that's the thing that affects the outcome you are a marketer not a scientist think about the messaging you're trying to convey overhaul it completely try something new and then um and then see what happens if you run that instead of the other do the thing with your offer on your landing page by the way this is not your sitewide offer like I was talking about earlier think about what happens if you run offer a versus offer B that can have a huge impact um on your page if you're serious about building ads and Landers at scale where you're testing lots of different Landers lots of different offers specifically at the level of your ads you should be thinking about doing that with format you should go to formont commerce.com to look into Vermont firmont is the Ferrari of landing page software it is really unlike anything else I've ever seen it is the highest performing fastest loading landing page software I've ever seen it makes offer testing insanely easy and fast you can control you can see the split testing results right there if you are a supplement brand and um subscriptions as a percentage of orders matters to you um or any brand that's running subscriptions right um You can see that in your actual landing page test because that's a really big factor so that all of the analytics for every test that you're running at the level of AD Landers is right there can also build enhanced custom pdps extremely fast and easy on the back end um of your landing page builds it's just it's just unlike any other software I know of for building lots of landing pages at scale again think here for brands that are like spending a good amount of money on meta or or on other channels you can really run these for anything you're spending a lot of money um and you really want to think carefully about how you build tight funnels across a range of products or a range of value propositions you want to do it at scale you want to do it fast and you want to do it in a high performing way measure it all in for M it is really excellent I've seen one client of mine use it that's had major success and we've really gone pot committed on it to where we're basically running all of our traffic through for we found immediate 50% spend increase when we switched up formont and started using their landing page capabilities so check it out now fromont commerce.com it is really awesome stuff all right test number six this is kind of like your offer but it's a really specific one your free shipping threshold and there's a really specific mistake people make with free shipping thresholds they know again they should be testing this first of all this is another thing where um it's not just about price or conversion rate it's actually about margin because giving away free shipping is actually normally a really low margin offer for Brands to give away like as in it's expensive when you go from charging five bucks or 10 bucks a shipping to nothing you're you're basically giving people like you know five to 10 bucks or whatever it is back in margin it's like a one for one margin exchange unlike discounting where it doesn't quite work that way so it's an expensive thing to give away a bunch of margin it's an expensive thing for Brands to give away and so you should be thinking about this from a profit optimization standpoint not just a conversion rate optimiz ization standpoint or even an aov optimization standpoint but there's actually a huge mistake that people make all the time with free shipping threshold which is that they take the average uh order value of customers across their entire site and they think about how do they raise that number or they set their free shipping threshold just a little above that or a little below that but the average is not actually the thing that you care about what you actually care about is a really specific thing probably which is either a new or returning customer or maybe even more simply just the modal just the the modal shipping threshold okay um if if your brand like most brands is actually disproportionately new customers you should be thinking specifically about the free shipping threshold for new customers and you should be thinking about the modal shipping uh shipping threshold and what I mean by that is what at what point do most customers drop off and where do you need to get them to move so let me give you an example imagine that your average imagine that you are a brand that uh averages let's call it 1.2 units per order okay so on average a customer has 1.2 uh of your products in an order all right what you should be thinking about here is a free shipping threshold uh that the average price there let's call it let's call it $80 for that right um the average uh the average uh let's call it $60 that'll make it easier make the math easier the average uh order value there of $60 is not actually the thing you care about because you are mostly not trying to get a person who is added two products to cart to add a third what you are mostly trying to do is get is get more people to add that second second product to card the V so so the actual modal uh order value is probably closer to like $50 let's say your product cost $50 and because 20% of people have a second order in their or a second unit in their order it pushes the average to 60 so you would you would think that what you need to do is make maybe make a free shipping threshold like 60 or $65 or whatever but uh but maybe actually you want to set it at 55 so that customers who have only added one thing are going like okay I really should add a second thing to get free shipping it makes just makes too much sense okay you get the idea that example might not pencil out exactly right but the idea is most customers are actually ordering a different order value than what the average says so think about the modal order value not just the average when you run a shipping test and then measure based on profit but again this can actually make a really big difference because that shipping charge can really be a huge issue and it's again right right next to checkout number seven this is something especially I want to think about for apparel Brands High skew count Brands and that is your collection page merchandising merchandising has another thing that has a huge impact basically for any brand there's a lot of browsing of your site you know there's there's like funnel Brands where it's like give people a problem solution drive them through a funnel but then there's also like browse Brands where you have a lot of different products and you want to um and customers want to the way they engage with you they want to go look around at a whole bunch of different ones well that means that what products you show somebody in your main collection pages that people are browsing can make a really big difference in the order you show them in because they're gonna some people of course are going to go look for a really specific thing I want a red jacket right and that's they go get okay but other people are just looking around and so what products you show them first can make a really big difference and so thinking about merchandising um can really matter now again I would think about all kinds of factors here I would think about um Inventory management skew management right if you have like a product that you have a whole bunch of and is like a reasonably fast mover move it to the uh and is decent margin move it to the front move to the top of your landing page your collection page okay if you have something that is a really a pretty fast mover but you actually are starting to run out of stock you might want to move that down the page a little because at some point you're going to stock out of it right now that's a really like you know one at a time kind of thinking that's time bound based on inventory cycles and some of those things but you know you get the way that I'm thinking about this here it's not just about um conversion rate it's about thinking about how cash moves through your business and all those things and again there's another area where i' think about margin specifically right if you have two products that people like a lot one of them is $200 and has 80% margin one of them is $150 and has 70% margin start with the $0000 one okay because you want to push people towards that one and see split test that collection page see if um promoting that one near the top of the page makes much of a difference on that all right so um collection page merchandising think about how to put your products in front of people in a way it's going to create the highest conversion rate Drive the most margin back to you and again measure with margin not just conversion rate and aov all right number eight finally uh a full website redesign now I'm actually not necessarily going to suggest that you do this it's a huge job and it's an expensive one but if you do here is what I'm going to say test it before it goes live I can't even tell you how many times I have seen Brands uh launch new websites overhauls to their websites and the conversion rate immediately tanks I can't tell you how many times I've seen that where like you think it's going to be great but like there's all kinds of reasons this could happen but you should test it before you run it um I mentioned intell GMS earlier as a sponsor of this uh of the interfer podcast they actually allow you to do full Shopify theme tests it's that robust of software it's crazy um and and it's something where I just wouldn't do this at this point without running some kind of tests all right because it just is too big of an impact it's expensive and it can really really hurt brand I saw brand recently do this they went to a new website it hurt their conversion rate they had to they had to um revert the site back to their original and then they did something really smart which they started testing individual Pages at a time to try to isolate where the issue was and at some point they could go full theme test if they wanted to see if they did if they uh if they could solve the whole thing because they did want to get to the new design they like the new design brand wise all those things okay um so if you're going to do it that's the main thing I'm thinking about and and that's really what I'm saying here again I'm not necessarily suggesting you actually do this I just think you should test it before it goes live people are wrong about their design ideas all the time and you got to think carefully about them it's really important all right so there it is eight of them let me run right back through them just so that we have them all straight PDP with a focus on content and Clarity in the carousel there's three C's there that's good number two sitewide first purchase offers you know buy more save more or even eliminating your 10% off offer number three price test your price stop pulling it out of thin air it makes a big impact in your business uh number four email popup especially get them saying yes with the micro conversion um before they have before you ask them for their email address number five landing pages for ads the key here is do it in landing page software do don't do it at the ad level in meta number six free shipping threshold look for the modal order not just the average order number seven collection page merchandising think about profit when you do this think about inventory when you do this number eight full website redesigns ought to be tested before they go live there you go um I see great brands that I work with care a lot about this and you'll notice what I didn't say I didn't say moving around uh menu bars thinking about that kind of stuff like that's not the stuff that's going to move needle I'm talking about major content marketing changes seeing what's going to work that I think is where all the impact is that's where you should put your focus all right if you like this episode you should subscribe to this show wherever you're watching or listening because I do all kinds of stuff like this all the time I'm trying to think about how to is how to actually practically tactically make your business more money and more profit as you go uh and so hopefully this is some help to you again if it was subscribe there's a lot more content like this on my channel there will be more in the future as well do you have any thoughts thoughts or questions about this you should email me podcast a.com or you can go to a.com to see absolutely everything I'm doing you can also reach out to me on X where I'm pretty active at andrewj Ferris um I'd love to hear from you in any of those places including in public if you want to yell at me in public that would be awesome if this episode is helpful to you the number one way you could say thanks besides subscribing of course and rating reviews and stuff like that is to share it with somebody send it to somebody who you think would help as well that would be great don't forget to follow up with my sponsors for this episode intell gems and formont both great I love them both you should use them both or whichever one you're ready for at the time they're both really awesome I think most brands when they get into the mid low midate figures I think a lot of Brands will be using both those side by side uh because they'll get into a mindset of testing lots of different stuff and building the best funnels and flows they possibly can best customer experience as they possibly can uh those are two amazing pieces of software that will help you do this my own clients use them that's why I recommend them to you thanks for watching thanks for listening I'll see you next time [Music]