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May 04, 2001
Case Study

eBags Raises Sales Conversion Rates 150% By Focusing on Testing, Testing, Testing

SUMMARY: Like many ecommerce companies, eBags has had to tighten its belt and focus on profitability recently. The marketing department cut its PR budget and ceased all offline and much online advertising that cost money. Peter Cobb, VP Marketing, says, "It's all about really buckling down." His official goals as of January 1st 2001 were to increase site traffic, build the prospect database and improve conversion rates ... while spending less money. Hear how he's grown site visitor-to-buyer conversion rates by 150%.
Peter Cobb, eBags Co-Founder and VP Marketing, is always one of the most popular speakers at marketing events because (a) he's not a vendor trying to sell something and (b) he gives great presentations packed with numbers, useful tips and hands-on revelations. So we were pleased when he agreed to be interviewed for the Case Study below.

CHALLENGE

Like many ecommerce companies, eBags has had to tighten its belt and focus on profitability recently. The marketing department cut its PR budget and ceased all offline and much online advertising that cost money. Peter Cobb, VP Marketing, says, "It's all about really buckling down."

His official goals as of January 1st 2001 were to increase site traffic, build the prospect database and improve conversion rates ... while spending less money.

CAMPAIGN

eBags got very targeted, very fast. Cobb set up three key committees, each including both marketing and IT staffers who were focused on finding a data-driven answer to improving marketing. Cobb says, "These are SWAT teams."

Each committee meets for an intensive hour once a week, during which time they review the data from the past week's tests, and hammer out plans for the next week's tests.

1. The committee to increase traffic at lowest (or no) cost, while growing the company's prospect database has tested:

- sweepstakes offers to encourage people to opt-in to the email program
- pop-up boxes vs. offers incorporated into the regular screen
- placing sweepstakes pop-ups on 3rd party Web sites who allow them to run the campaign for free in exchange for a co-registration button on the box. ( See an example at: http://www.switchouse.com )

2. The committee to improve effectiveness of the email marketing programs that are sent to the database has tested:

- offers including percents off vs. dollars off, free shipping, and free airmiles
- "cutesy vs. inviting" subject lines
- size, number and lay-out of photographs on screen
- text vs. html
- special offer emails vs. quick travel tips vs. newsy informational newsletters

3. The committee to grow sales conversion through effective site and shopping cart process design has tested:

- Using graphics for navigation on the Home Page vs. a "Yahoo-style" text directory
- site load time
- the colors and shape of the site's navigation tabs
- layout of landing pages when people click through from email offers
- size and placement of photographs on pages
- adding a box for shoppers to enter their zip code into so they can tell when their order will arrive
- every (and we mean every!) possible detail during the purchasing process that might decrease shopping cart abandonment

eBags runs all campaigns using in-house technology, including 12 servers, so it's fairly easy for the Company to split out test cells. For example, if the site committee wants to test photographs appearing on the left versus right side of the page, they can split the site's traffic into two streams, and serve a different version of the page to each. Cobb says you need a test cell of about 10,000 visitors (or emails) to get statistically reliable results.



RESULTS

Back when eBags launched in 1998, the site's conversion rate of traffic to buyers was about 1% -- which is a respectable figure in eretail-land. Now eBags converts an average of 2.5-3% of all visitors to buyers -- which is highly impressive.

Cobb says, "It's the beauty of the Internet. I can put something up and within five minutes I can change the price or the photo, or if it's sold out I can remove it completely. When a print catalog goes out, you can't do that."

Here are some specific test results:

- Out of all the site design tests, the most significant factor by far was load time (the speed at which a page appears on a visitor's screen.) Cobb says, "Conversion rates are 10-20% better on faster pages. It doesn't sound like much but in our business you look for slight increases."

So, the team wound up going with a Yahoo-style home page directory because it loaded much more quickly.

- eBags has been able to reduce its shopping cart abandonment rate by 20% by tweaking each one of the five pages in the purchasing process. Cobb says, "Keep it simple. Show people exactly what they're buying, what they're saving, and where they are in the process." The zip code entry box, which helps people find out when their purchases will arrive, has also helped by "absolutely" cutting down on in-bound customer service calls.

- Although testing pop-up boxes for the sweepstakes opt-in offer was initially controversial amongst eBags staffers, the test proved so successful that the Company has implemented pop-ups on an ongoing basis.

- When the pop-up sweeps offers appear as a co-branded offer on 3rd party sites, an average of 8% of visitors sign up, 75% of whom specifically choose to be added to eBags' list or on both the host site's list and eBags' list.

- These sweeps entrants immediately receive a "thank you" email from eBags. The offer that works the best is a 20% off coupon. 7% of "thank you" email recipients click through to the store and of these a total of 5% convert to buyers. So the conversion rate for these email campaigns is about double the site's average conversion rate!

- eBags' other regular email campaigns to opt-ins and customers generate an average 8% click through rate. These campaigns are responsible for 90% of all repeat purchases!

The special offer messages tend to work the best, but the newsletter style messages also have their fans and enhance the site's credibility. The "cutesy" subject lines were definitely NOT winners though. Bigger pictures tend to work better than smaller ones, but this must be juggled vs. download time concerns.

eBags' buyer follow-up campaign, whereby buyers get an email 30 days after their purchase that solicits testimonials and product ratings (and incidentally also includes a 20% off coupon), has been so successful that the Company just instituted an annual campaign as well. Now buyers get an email a full year later, also soliciting product feedback (plus offering the coupon.)

NOTE: Cobb is interested in partnering with other consumer sites to grow his sweeps pop-up campaign. You'll get a co-branded pop-up for your home page that will help you grow your own opt-in database. Interested? Contact him at peter@ebags.com

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