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MarketingSherpa Email Summit 2015 - SAVE $700 - VIP PRICING ENDS THURSDAY
Feb 21, 2006
Case Study

How Big Al's Raised Ecommerce Conversions 5% by Offering eBilling

SUMMARY: A few MarketingSherpa readers complained last month when we brought you a Case Study about Newegg.com's Bill Me Later tests. Turns out loads of ecommerce sites are excited about copying this test, but the vendor Newegg.com uses only takes new clients with more than $20 million in annual online revenues. If you work for a small-to-medium sized eretailer, this ebilling Case Study is for you. By the way -- check out Big Al's incredible conversion rates.
CHALLENGE

Be prepared to feel very, very envious.

According to Dan Hamilton, Ecommerce Director for aquatic mail order firm Big Al's, the site got a 10.8 average paid purchase conversion rate, with an $88.00 per average purchase.

Best of all, once a newbie converted to their first purchase, they were likely to return roughly eight more times, spending $750 per year at the site.

"We're really happy with that," says Hamilton. Yet, his team couldn't help wondering if they could tweak the site and get even higher conversions.

CAMPAIGN
First the team reviewed what was already working. Thing is, while it's a nice enough site, Big Al's isn't much different from loads of other midsized ecommerce sites. Except for one thing; the cart entry page promoted a VIP points awards program with the following copy in red "ink":

"Note: Guest orders are unable to earn VIP points. If you have an existing VIP account, we cannot add Guest points to your account after the order has been placed."

This simple two-sentence note proved powerful enough to add many more registered users to the database and hence into the email programs, which in turn grew loyalty.

Hamilton figured, if one small tweak to the cart made such a difference to the bottom line, why not test adding another?

"A lot of people were dropping off at the shopping cart. We did a little survey with our customers and one of the things that kept coming back was security issues: concern about using credit cards. Our demographic is mainly men aged 25-55, who you would think would be comfortable with credit cards. But, we had a lot of customers who were using checks and money orders."

The problem, of course, is processing mailed-in checks and money orders requires more time, work and expense for the site; plus customers don't get the instant gratification they do with ecommerce orders.

So, Hamilton decided to test an ebilling program that allowed consumers to order without submitting a credit card or postal mailing a check. Instead, they could pay the bill online via their personal bank account's online bill pay option. The site would only ship the order when the bill was paid.

The SECURE-eBill offer appeared on the second page of a cart, in the payment information section. Cart users could choose between using a credit card or paying via SECURE-eBill. (Link to screenshot below.)

Those who chose the SECURE-eBill option then saw a bold headline on their order confirmation page reading:

"Your order is not complete. You will immediately receive your bill by email. Log in to your bank site and pay your Big Al's bill the same way you pay your other bills to complete your order. This must be done before 2006-03-07 at which time your order will expire."

(Note the date was always two weeks after the date of the order.)

The emailed bill itself had a very stern subject line: "Ebill, Immediate Payment Required for Big Al's Online."



RESULTS
Due to the SECURE-eBill option, Big Al Online's shopper-to-buyer conversions rose 5% to 11.34% last fall. On the other hand, processing SECURE-eBill orders was 1.2% cheaper than processing Mastercard or Visa orders.

Roughly 6% of all Big Al orders now choose the SECURE-eBill option.

If you're considering offering an ebilling program to your shoppers, Hamilton has two pieces of advice:

#1. Schedule at least 45 days for behind-the-scenes tech to integrate the system with your site. It doesn't take forever, but it's a significant project.

#2. Most consumers have no idea what e-billing is, so you'll want to make sure that you've got great warm-fuzzy FAQs on your site about it. Also train your customer service reps to answer questions, and consider running a high profile discount or free shipping promotion for eBill orders for a couple of weeks when you launch so your routine visitors get used to the idea.

Useful links related to this article:

Creative samples from Big Al's Online: http://www.marketingsherpa.com/cs/bigals/study.html

Moda Solutions - the vendor that powers SECURE-eBill for Big Alís Online: http://www.modasolutions.com

Big Al's Online: http://www.bigalsonline.com

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