After mapping out the customers’ journey and analyzing the conversion rates for each, the PDQ team got to work suggesting upgrades and A/B tests that would dial up results for specific segments and demographics at every stage of their lifecycle.
“Huge uplifts resulting from deep investigative testing, it’s not just one-time ” - Ronak Shah
Some stats
4.1% increase on shopper’s first order’s conversion by offering them free shipping (even below the threshold)
7% uplift + $5 increase in revenue per checkout on 3rd order by offering discounted priority shipping to these returning shoppers
$177 increase in customer lifetime value by ensuring delivery within 3 business days
The Challenge
Brands are often in the bad habit of treating all shoppers the same, but the data clearly indicates that shoppers value different things at different stages of their loyalty journey, and will behave differently depending on how many orders they’ve received and how much they trust the brand.
Obvi wanted to segment shoppers by their order number, and give shipping related offers to incentivize each shopper according to what would be most effective for them.
“These guys are 11/10, they’ve always got something new to optimize” Ashvin Melwani.
The Solution
We optimized the customer journey by showing every buyer the most profitable checkout.
- With first time shoppers, the focus would be on building trust and ensuring a quick arrival. That’s what the messaging focused on, and as an added perk there was a ‘limited time offer’ for free shipping. This led to a 4.1% uplift and 5 figure revenue increase.
- The second order was left untouched, shoppers like what they got in the first order, and came back for a second order. Since conversion was high, there was no discount required to incentivize shoppers.
- The third order, we learned, was vital for Obvi’s trust building. It’s where many shoppers decided whether they were going to be long term Obvi shoppers or not. If their third order arrived within 3 business days, shoppers were much more likely to return for a 4th order.
- An additional test on lifetime value found that the customer’s lifetime value increased by an average of $177 if they received their order within 3 business days. Even up to 7 business days saw a $65 CLV increase.
- In addition, in the few cases where a delivery promise was going to be missed, PDQ’s Gorgias integration automatically sent that shopper an offer to win their trust back.
What else?
PDQ is continuing to run lots of optimizations and tweaks, like testing the impact of lowering shipping rates to increase conversion rates and increase revenues (more than the hit to shipping revenue). So far the results are promising.
And Obvi is taking advantage of PDQ’s other features, like the tracking page with a dynamic discount coupon code in the case of a late delivery.
What’s next?
Besides additional testing and optimizations, we’re exploring a range of correlations with additional tests, for example: specific SKUs and returns. Or Specific SKUs and cart abandonments. Or the connection between time in checkout and cart abandonment.
But first, we’re launching an A/B test to see once and for all which Shopify checkout performs better: the one-page checkout or the three-page checkout.
And lots, lots more.
