Subscriptions and the power of A/B testing
To drive more recurring revenue, ecommerce brands with subscription models can’t be myopically focused on the present. Innovating on what brands display to consumers, from design elements to checkout flow, is a critical process for engineering and IT teams to fine-tune. And there’s an effective tool to leverage for this task: A/B testing.
Typically, A/B testing refers to how brands can test one experience against another. That test requires changing a set number of elements on each page consistently. At random, most commonly, one user visiting a website sees something else than another, and the site managers keep track of which iteration performs most successfully.
One way to think about it is to consider testing on digital ad copy, where a brand might roll out two different ads but test different copy or design components. The audience isn’t aware that they are experiencing a different variant. They just carry on normally, while the brand collects data from these A/B tests.
An example in the ecommerce space could relate to building a purchasing process as frictionless as possible. Placing the “Buy Now” button in a certain area of the page may lead to more or less clicks than placing it elsewhere. Or what if that button was blue instead of yellow? Or what if the shopper didn’t have to scroll to read product details? Would that decision increase the click-through rate?
Let the data do the driving
The subscription business model is not just about offering. As important as it is to deliver an innovative, unique offering to the market, brands also need to ensure they are able to convert customers during the checkout process and maximize customer lifetime value in the long term. This is where A/B testing becomes crucial.
“A/B testing is important for brands to make the right kind of data-driven decisions, especially in the subscription conversion rate optimization,” says Anatolii Iakimets, Senior Product Marketing Manager at Bold Commerce. Cart abandonment rates are indeed a top threat to ecommerce success, even during a year where the pandemic spurned a surge in ecommerce transactions: for 2020, end-of-year reports put the cart abandonment rate for desktop at 69%, and even higher on mobile at 85%, according to retailer news networks.
Combating these significant cart abandonment rates requires a deep understanding of what your consumers are doing with your digital portals such as checkout and purchasing, adds Iakimets. “Look at the ‘cancel your subscription’ area as well for A/B testing, where you could potentially give subscribers options such as pausing before they decide to cancel for good,” he says.
Another important piece of advice when embarking on A/B testing is recognizing exactly what you want to measure. One target may yield a different metric than another. For example, as The Startup explains, “If you are looking to improve the impact of a homepage or landing page, then you might be looking at reducing the bounce rate, but not the overall revenue per visitor. It should show the direct causal result of the thing that you are trying to do.”
For ecommerce brands with subscription models, they may want to have one A/B test focused on seeing how their upsell pop-up works at one stage of the purchase journey versus another. Or the test could look at reducing the checkout flow from three pages to one, test via heatmaps, how often a customer is scrolling on a certain page.
The API approach
“That’s why API-first approaches are best for A/B testing,” Iakimets says, “because you need that flexibility to create unique checkout experiences from scratch and then test them to optimize conversion rates.”
With headless commerce platforms, an ecommerce brand can stitch together their digital assets with various apps and plug-ins, enjoying the best-of-breed vendors that fit exactly what they want to implement on their stores.
The market has spoken: A 2020 study found that 61% of retailers surveyed were either currently leveraging or planning to leverage a headless commerce architecture that year.
Getting the most out of A/B testing comes down to what’s called statistical significance. Brands need enough visitors to their site to warrant that data collection. For subscription-based brands, that significance requires traffic to be driven to, say, a signup page to test various iterations of the process.
Prioritize your learning
Coordinating with many branches of a brand, such as marketing and UX, is helpful in ensuring everyone is on board with funneling traffic to a certain region of the digital asset in order to generate enough visitors to warrant the A/B tests.
When the results come in, prioritization is key, according to a product manager specialist. Don’t fall into the trap of testing everything first, writes James Coperman, “if the feature or change is an absolute no-brainer, and you’ve validated directly with users, then there is little value in using AB testing to further prove the point. It is in the more marginal decisions that you can really get value from using testing, maybe there is a split decision in your user research, or two HIPPOs who favour different solutions.”
When ecommerce brands seek to level up their offerings, using apps such as Bold Subscriptions, they can take advantage of experiments such as A/B testing so they’re living up to this prescient quote from Gartner executive Peter Sondergaard: “Information is the oil of the 21st century, and analytics is the combustion engine.”