Guest Blog: A/B testing and eCommerce: A Natural Match

Thanks to CTO Jean-Noël Rivasseau, from our marketplace partner Kameleoon, for sharing some industry insight. 
 
Creating a successful and profitable eCommerce business is a hard task. Online merchants are faced with an ever-growing list of tasks and choices right from the very start. Setting up an eCommerce solution, coming up with a proper design for the website and taking care of the logistics is only the beginning of the journey. As your business matures, new challenges appear everyday: which payment gateways should I support? Should I setup an online chat to guide prospective customers? Is it the right time to launch a retargeting campaign? With this plethora of options, don't forget the big picture. Each one of your actions should help towards one of the three pillars of eCommerce: acquisition, conversion and loyalty.
 
Acquisition and loyalty are so obvious that they are not easily forgotten. However, conversion is often left out, which can be a very big blunder, especially for mid-sized merchants. Mature businesses know the value of conversion increases: as they try to grow, driving new traffic to their site is getting increasingly costlier, so they need to make sure that conversion is high in order not to waste that traffic. On the other hand, merchants that are only getting started need to work primarily on getting visitors. They become used to it and later continue to work solely on this issue, just to discover too late that their converted customer acquisition cost has skyrocketed. Do not make that mistake, and start working on your conversion as soon as you acquire a decent enough traffic.
 
How to increase your conversion rate?
 
Being obsessed with conversion rates is an excellent thing. In a typical website, many factors influence your conversion rate: the design, the general design, promotions and marketing actions (such as coupons). In the end, it all comes down to how the visitor perceives, unconsciously, your business. Of course, rational elements (such as prices) come into the picture, but it's very difficult to act upon them as they are intangible factors for your business. All the rest is just a matter of perceived trust and personal preference. A given visitor can favor a competitor’s website for the same product, even if it's a bit more expensive, just because they liked the purchasing experience more!
 
To improve conversion, your efforts must go toward changing lots of stuff on your website, and measuring the results of these changes. That's where A/B testing enters the scene.
 

You cannot make informed, correct decisions without obtaining some objective data about your visitors’ preferences.

 
A/B experiments allow you to do exactly that – it's like asking your prospects direct questions, except they don't even know they're being consulted!
 
The invaluable benefits of getting to know your traffic better
 
The real value of testing lies in the fact that, at least in the beginning, you really have no idea what will work and what won't for your given target audience. Actually, as it is a mostly unconscious process, even your visitors could not explain what they like and dislike about your site. If we take back the previous example of a visitor favoring another website, if asked, he would probably say that he felt more confident about your competitor, whereas he feared a rip-off on your own site. But he would be hard pressed to explain precisely why... is it that orange graphic theme he liked better? Or the fact that the customer service phone number was more prominently displayed?
 
So your first changes will probably be made at random: a call to action reworded, a picture modified, blocks moved around your product page... But with each completed A/B test, your intuitions will get better and changes will be more efficient.
You will also get a better understanding of what reassures your visitors and turns them into customers. That can be even more important than the immediate revenue gains in the long-run, because knowing your target audience (even more than themselves) will have positive effects across all of your operations.
 
When to start A/B testing?
 
A/B testing gives such a high ROI for eCommerce that the general answer is “as soon as possible”. However, it does not make sense to A/B test if your traffic is too low, as the results of your tests will not be statistically valid. A good rule of thumb is to run your first experiments when your monthly traffic, in unique visitors, goes over 25,000. In fact, it depends more on your conversions that on your total traffic: 500 conversions per month is enough to get started. Of course, with more traffic and more conversions, A/B testing gets only easier, as your experiments can be run for a far shorter amount of time and still produce actionable results.
 
From an operational point of view, running A/B tests was complex and/or costly just only a few years ago. But the advent of agile, cost-effective dedicated A/B testing solutions such as Kameleoon has changed this for the better. It's now extremely easy to optimize your conversion rates with tools costing around a hundred dollars a month. Ambitious and smart e-merchants will try out A/B testing, and will not look back!  Kameleoon
kameleoonguest's picture
Posted September 22, 2014

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