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Sep 09, 2009
Case Study

Branded Credit Options Lift Sales: 6 Steps to Increase Average Order Value 18.6%

SUMMARY: Alternative payment methods and credit options can help ecommerce marketers weather dips in consumer spending.

See how a multichannel jewelry retailer got more than 20% of their customers to use a branded, credit-based payment option which also resulted in an 18.6% higher average order value per customer than other customers.

Tim Engle, SVP, Strategic Initiatives, Jewelry Television, is responsible for finding new ways to grow sales at the multichannel jewelry and gemstone retailer. In December 2007, he considered offering customers alternative methods of payment -- particularly lines of credit.

"My experience in my previous roles had been that offering consumers more alternatives for credit without them having to use their mainstream cards could elevate sales," he says.

At the time, Jewelry Televisionís customers could pay using standard credit cards or an electronic check. Sales were made through the teamís website,, and through their call center. The call center received sales driven by the teamís television network, which reaches more than 80 million American households.

But the team had a deadline looming. They needed the new payment option available by October 2008 to be an effective sales driver for the holiday season.


Engle and his team adopted two methods for customers to receive credit rather than pay in full for orders:
o Instant credit for the amount of the purchase price
o A Jewelry Television-branded credit card

Here are the steps the team took to implement the options for the 2008 holidays:

Step #1. Pick credit partner

Offering credit to your customers without the help of a partner is not an option -- unless you have banking and finance departments in your company.

Several companies and banks can offer credit to your customers. These companies are experienced in the legal formalities and complexities of issuing credit.

Engleís team wanted to work with a partner who could:
o Offer instant credit for purchases
o Provide a Jewelry Television-branded credit card that could be used only for Jewelry Television purchases
o Support regular promotions, such as no interest for 90-days
o Integrate with their website and call center
o Offer a better price-per-transaction than competitors

After five months of sending out requests for quotes and listening to pitches, the team selected a partner. Part of the reason for the long selection process was that the rest of Jewelry Televisionís team was not as enthusiastic about adding a credit program as Engle. His colleagues inside the company needed convincing.

Also, Engle wanted to be careful. "Your first big decision is the most important, and that is who your partner is."

Step #2. Protect the customersí experience

The team wanted sign-up for the instant credit or the branded credit card to be a simple, straightforward process.

Also, because the card would be branded with the company's logo, they wanted to make sure that customers would not be mishandled or led astray by the fine print.

"We made sure that we were competitive in terms of pricing the cardís interest rate and terms," Engle says.

The team also instituted a prescreening system that used an algorithm to calculate the probability that a customer would qualify for the card. This system helped the team avoid offering credit to customers who might not qualify.

"It was one of the top concerns. We wouldnít launch the program without prescreening in the call center because we knew that if there were any issues with the card, the customers would look to us first," says Engle. "What you donít want to do is create a line of credit that creates a lot of negativity because people get declined a lot."

Step #3. Build a project team

The lengthy partner-selection process gave Engleís team only three months to complete the project and have it ready for the holiday season. The schedule did not leave much time for snags or delays.

They put together a cross-department team that involved all aspects of Jewelry Televisionís business. The team included members of the following departments:
o Marketing
o Finance
o Customer service/call center
o IT/technical
o Broadcast

"It canít just be an Internet strategy," Engle says. "You have to have everyone behind it so they understand it and how it integrates into the merchandising plan and how they can benefit from it."

The team met once a week to go over the big picture, track weekly goals, and make sure they stayed on schedule for launch.

Step #4. Incorporate credit offer into all channels

The team pushed the new credit options in all its channels to maximize their chance of lifting sales. These were on-going efforts, not one-off mentions.

Here are the key channels:

- Television

The credit options were mentioned more than a dozen times each day on the Jewelry Television broadcast network.

- Email

The team used ad space in its house emails to promote the options, particularly the branded credit card. The ads at times promoted a free shipping option when opening a new credit account with a purchase (see next step).

- Homepage

Ad space on the homepage promoted the two payment options. When clicked, the ads took visitors to a page that explained the payment options, and at times featured a promotional offer such as a 10% discount and free shipping when opening a new account.

- Product pages and checkout

The teamís website mentioned the payment options on almost every page a customer saw when selecting and purchasing an item.

- Telephone

The telesales team used the pre-screening system to gauge whether customers were candidates for the program. Customers deemed low-risk were offered an account. Customers deemed higher risk were not offered an account, but could request an application.

Step #5. Include a launch promotion

The team launched the new payment options in October through announcements on their website, the broadcast network, and in house email.

The announcement included a promotion that offered:
o Interest-free credit for 90 days (called 90-day Same as Cash)
o 20% off the order price when choosing one of the new payment options.

The team also created a direct mail piece promoting the branded credit card. The mailing was sent to about 35% of the teamís top customers, who had been prescreened to ensure a high likelihood of qualifying for the account.

Step #6. Maintain regular promotions

Following the launch, the team continued to promote the new payment options. The promotions included:
o 90-day and 6-month periods of no interest on purchases made through the credit lines
o Free shipping
o Percentage discounts


The team launched its credit program just as the economy fell off a cliff last fall -- and those payment options helped maintain sales during the all-important holiday season and beyond.

"These payment options were a must-have. We did not want to go into the [holiday] season without them," Engle says. "Thatís why October was such a critical date. I don't know what we would have done without them."

Today, more than 20% of customers use one of the alternative credit options. More than 75% of those customers use the teamís branded credit card.

- Average order value among those using the card is 18.6% higher, compared to regular customers.

- Average order value among those using the instant line of credit is "north of 20% higher," Engle says.

- Customers using one of the credit options purchase about 20% more often than other customers.

The teamís use of regular promotions was essential to the credit linesí on-going success, Engle says.

"You canít just build it and leave it alone and expect people to come to it. They wonít. You have to push it."

The team discovered that promotions with multiple benefits tended to perform better than a single discount or benefit. For example, when the team added free shipping to an offer for a 10% discount on order price, the number of customers choosing a branded credit card went up roughly 30%.

Although sales made through these promotional offers increased the teamís transaction costs, the promotions often drove more than enough sales to cover the additional costs.

Useful links related to this article:

Creative Samples from Jewelry Televisionís branded credit campaign

Bill Me Later: The teamís credit program provider

Litle & Co.: The teamís payment processor

Jewelry Television

See Also:

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