The most hyped bargain hunting weekend of the year is upon us. To see it in, consumer group Which? has reported that 60% of popular Black Friday items discounted were actually cheaper, or the same, at other times during the year, urging consumers to look harder at discounts before they buy.
With shoppers becoming savvier by the day, it’s absolutely key that brands test before making those all-important discounting decisions. It’s also vital to check your goals before and make sure you’re hitting all of them and not just the big headline ones.
Normally, when you run an optimisation test the winner is the one that converts the best.
Well, let's consider a publishing business seeking to increase subscriptions to be achieved by securing more email opt-ins, to in turn nurture them through to becoming a subscriber. The business decided to offer an incentive to encourage visitors to part with their email address, two options were tested with visitors randomly offered either a 10% or 15% code.
Now I’m sure you are thinking “this is easy, clearly the 15% offer will have had more conversions”, and you would be absolutely correct. In the test the 15% code generated 27% more sign-ups with a conversion rate of 6.6%.
But if it’s so obvious, why are we blogging about it? And what’s with the title - Less is more?
Firstly don’t forget this is a blind test, the consumers weren’t aware that there were two offers available, each offered to different visitors as they left the site. Secondly, the stated aim was both sign ups and subsequent conversion to being a paid subscriber.
The interesting statistic for us in this test was that the results were almost inversed when looking at the number of customers won. In fact, both offers resulted in almost identical proportions of visitors redeeming the code and becoming subscribers, with the 15% offer being only 0.89% higher than the 10% offer.
When you put both elements together, the 15% discount result gives more email addresses, but a negligible increase in overall sales. However the negligible increase in the volume of sales cost the business an additional 5% in revenue, compared with the 10% offer.
So in this case less would indeed have been more. In assuming each offer was triggered 10,000 times, the 10% discount generated slightly fewer sales, but protected more margin making it the more profitable option.
As both offers converted almost the same number of customers, there was no need to offer more. While it could be said that perhaps those that purchased were more price sensitive, in our opinion it’s more likely the 10% discount was incentive enough to convert on the customer’s existing intent to buy. A win win - an appealing consumer offer and the most viable business option achieving 5% more revenue.
Black Friday is just the start of the biggest annual discounting season. There’s still time to test and tweak your offers before you roll them out over Christmas and into the new year, to make sure you’re offering your customers real value.
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