In 2004, John Howard had a problem. He had earned his nickname “The Carrot” for his red hair; in fact, when he began selling printer cartridges over the Web in 1998, he named his company Carrot Ink. But by 2004, it was his company’s ink that was threatening to turn red, with increased competition and return on investment down sharply from its former 50% peak. Howard needed to find a way to convert more sales at his site, and quickly.
The problems came from a couple of sources. For one thing, Carrot began marketing on the Web under pop-under ads in 2001. Those worked well for a while, but now prices for such contextual ads are rising at the same time that about 20% of them are being blocked by consumers’ firewalls, browsers and anti-adware. “They just weren’t working for us anymore,” Howard says. “We were witnessing the demise of the pop-under ad.”
What’s more, the company found that 72% of the visitors who clicked through those ads to the Web site were leaving it almost immediately. That meant all they saw was Carrot’s first page, with no chance to receive any offers or check any prices. The company stocks 700 ink products, sized to fit about 1700 different printer models. So no one brand of cartridge was enough of a draw to feature on that home page. Customers want the cartridge that fits their specific printer; they’re not about to be tempted by a good price on ink they can’t use.
So Carrot’s home page was failing to lead customers into the offer pages appropriate for their printer. “To me that’s the tell-tale sign of whether someone is a genuine visitor—to see whether they get into the site deep enough to see a price and decide is we have a compelling offer,” Howard says. The company needed to bring visitors more deeply into the Web site faster.
Getting that job done started with a complete revamp of the Web site in early 2004, with the help of Columbus, OH-based e-commerce consultant Resource Interactive. The navigation solution that resulted was what Howard calls “BOB”, short for “Big Orange Box.” This is a design element that appears in the upper left of every page. On the home page, it serves as a tool for getting the visitor to his proper landing page in three clicks. Users select their printer brand from a pull-down menu of eleven choices; then they select the family from within that brand. Finally, they select the proper model from within the family, hit “submit” and move quickly to the exact page for their needs. This replaced a structure that required visitors to drill down through four different pages to find the right item. “Now we’ve got it down to one page load and four clicks to find your product,” Howard says. “I think it’s not the clicks but the page refreshes that kill sales. They take time, and there’s a brief instant during each one where visitors are not engaged and can be distracted away from your site.”
The results following the February 2004 redesign were impressive. Thanks to the advent of BOB and some other clean-up changes, Carrot saw a 78% increase in its conversion of visitors to active shoppers on the site when it went live in October 2004. Visitors’ penetration of the site also improved tremendously. Any online merchant would be pleased with that improvement, and probably satisfied.
But a notion presented itself to Howard and his team: If those changes could produce such dramatic results, perhaps there were other changes that could do nearly as much to hike conversions and shore up ROI. “We went through this dramatic site re-design and were fairly pleased with it,” he says. “But the question still came up: Was this the optimal design?” Specifically, did the creative content—the tag lines, graphics and call to action—work as hard as it could to hold visitors and bring them deep into the site? The question was complicated by the fact that Carrot Ink had not done any real metrics prior to the redesign, so it had no detailed way to compare performance of the old and new sites.
Howard and his marketing team came up with a number of content options whose effectiveness they wanted to test. For example, what worked best as a headline for the home page: a gene4ral welcome message, a specific offer (“Save 30% to 70% on printing supplies”) or a memorable, grabby tag line? And what was most effective at the top of the orange navigation box: “Buy ink for less” or simply “Find your cartridge”? All told, they arrived at three possible creative options for each of four points on that new home page. To decide which choices produced the deepest visits and the highest sales conversions, Carrot turned to a new alliance between Web analytics provider CoreMetrics and Offermatica, a firm providing hosted Web testing services. Three choices of creative in each of four places mean 81 possible combinations, if you do the math. That’s a lot of time-consuming testing under the classical A/B process. Instead, CoreMetrics and Offermatica approached the task as a job of multivariate testing. CoreMetrics would use its platform to measure and then analyze the behavior of individual visitors to the Carrot Ink site. Offermatica would then hook into that data and provide Howard with a way to look at multiple versions of the choices simultaneously to see which ones captured the most visitors and produced the most conversions.
“Offermatica calls their approach the ‘cookie recipe’,” Howard says. “You figure out all at once how much brown sugar, white sugar, butter and chocolate chips, to get the ratios right.” Eighty-one combinations would have meant a lot of traffic and a lot of time to test them all. But using their method, Offermatica was able to test only 11 different recipes and find the most effective one.
“A guy like me likes throwing pieces up in the air and seeing what lands in the pot,” Howard explains. “This method let me do something of that.” Visitors to the site during testing, which took place in November 2004, received a cookie that ensured they would see the same creative if they came back again, to make the test measurements more accurate. One finding of the process was that people didn’t perceive the big orange box as a sufficient call to action in itself. So the strongest command at the top of the box—“Find Your Cartridge Here”—turned out to be the most effective copy. And a statement of value proved to be more effective on the home page than a straightforward greeting. So the Carrot Ink home page now leads off with the slogan, “Ink Shouldn’t Cost More Than Your Printer.”
Making small changes like these on a home page that had already been successfully rebuilt allowed Carrot Ink to uncover an additional 18% increase in shopping conversions. “Testing with CoreMetrics and Offermatica was a way to fine-tune this new Web site we’d rolled out,” Howard says.
Now Carrot Ink is using the CoreMetrics/ Offermatica partnership to test changes in its checkout scenarios. Howard gets reports on what value and what kinds of products are abandoned in shopping carts, and the figure is too high to suit him. “I get a couple hundred thousand dollars a week in abandoned carts,” he says. “This is a family-owned business with 10 employees, so for us that’s real money. If I can get 10% of that back, on standard margin that’s $5,000 that goes to the bottom line every week. That’s huge.”
So Carrot is considering a few options to reduce those abandonment rates. Right now the company has the “submit” button below the fold of its order form, with a note at the top reminding customers that their order isn’t complete until they click that button. Howard thinks that may be where some of the visitors fail to convert, so Carrot will test a single-screen checkout form. And Offermatica will handle the testing, throwing some customers into the new version while allowing the control group to use the old system. Howard the veteran Web entrepreneur– who used to dash off his own pop-under ad copy and whose first site “looked like something that operated out of a garage”—is now firmly converted to sophisticated testing at every step of the Web sales process. His customer acquisition problems are not solved, and he’s not certain what options are open to him beyond the pop-up ad. But now at least he’s sure that once customers get to his site, he’s optimized the experience and stands a good chance to turn visitors into buyers. “I read an interview with the head of Omaha Steaks where he said that this business is just constant testing, testing,” he says. “And I hated to hear that, because I’m a guy who wants to figure something out, set it up and then go play golf everyday. But Omaha Steaks has been in direct marketing a lot longer than I have, and I believe them when they say that constant testing is the key.”