By Simon Bird,
Co-Founder and CEO, RevLifter
Every day, retailers make small yet significant decisions on how to speak to their customers. Their choice of words can be the difference between conversion and abandonment.
Unfortunately, these decisions tend to come down to preferences rather than data. Yes, branding considerations dictate whether a retailer will highlight a ‘great deal’ or an ‘exclusive reward‘. Still, generally speaking, there is a real lack of testing regarding how to phrase a promotion.
We at RevLifter thought this made for an interesting area of study and decided to conduct these tests ourselves. Our team studied over 500 million offers to find out which words had the highest click-through rate (CTR), conversion rate (CVR), and average order value (AOV) when placed within an eCommerce promotion.
We wanted to solve a host of debates, including:
- Should you say ‘deal’ or ‘offer’?
- Should you say ‘buy now’ or ‘buy today’?
- Should you offer discounts in ‘£ off’ or ‘% off’?
The findings are in our new Offer Copy Report, which is free to download. But let me take you through some of my highlights.
‘£ off’ vs ‘% off’ – which discount performs best?
With discounts, using ‘£ off’ rather than ‘% off’ can generate more profit. For example, if I sell a product for £120 and take 15%, I get £102. Taking £15 off gives me £105.
The question was, would percentage-off discounts perform better than money-off incentives? Digging into our global data, here is what we found:
- With small promotions, go with ‘£ off’
As we can see, going with a money-off incentive gives you a higher order value and around the same CTR and CVR, too.
- With mid-level promotions, consider conversions and AOV
Bigger promotions saw percentage-off discounts driving more CTR and CVR. However, money-off discounts still generated the best AOV.
- With high promotions, choose ‘£ off’ for conversions and ‘% off’ for AOV
Our data showed a big result for ‘25% off’, driving an incredibly high AOV. Again, though, money-off incentives put in a better showing for engagement and conversions.
We should also raise that a recent test conducted by RevLifter involving US Polo Assn saw very little difference between ‘$ off’ and ‘% off’ discounts in terms of sales, conversions, and order values. As a result, the fashion brand simply switched more of its promotions over to money-off to protect its margin.
Free delivery vs fast delivery
We’ve previously written about the power of using delivery as a discount-free incentive. Showing customers how much extra they need to spend to qualify for shipping is a smart way of driving conversions without giving anything away.
Our data confirms the popularity of free shipping ‘offers’, which return a strong CTR and CVR.
‘Express delivery’ has a much higher order value, but this can be explained by shoppers spending more to redeem this service.
An emerging cart abandonment strategy
In terms of commonly used terms within eCommerce offers, ‘didn’t work’ wouldn’t be an obvious choice. Still, a huge sample group was enough to send us into research mode.
The phrase tends to be used within ‘Error-Code Offers’, which tackle a highly specific abandonment scenario by replacing non-working discount codes for personalized ones. Rather than wave goodbye to customers who can’t redeem a fake or invalid offer, the retailer can remedy the situation with a light incentive.
Data from RevLifter shows Error Codes driving perfect scores for CTR and CVR, as well as a high AOV.
It should be noted that these tend to be reserved for customers spending a certain amount, hence the high order value. But who can argue with the effectiveness?
Conditional offers are hugely popular
Our survey showed that retailers aren’t exactly avoiding discounts but they are making efforts to structure them in a more profitable way.
Case in point: ‘spend’ was the most commonly used word in our report. Usually, this comes from a retailer running a conditional offer, like ‘Spend £100 to get 10% off’.
Many brands are running dynamic offers, where customers are shown how much extra they need to spend to unlock a discount. We’re all for this as an alternative to broad, sitewide offers.
Black Friday vs Cyber Week – which performs best?
Peak season is a crucial time for retailers. Q4 reaches fever pitch in November as Cyber Week and Black Friday roll around.
As expected, offers related to these events converted and engaged well. However, the impact of discounts brought down their order value. Black Friday had the edge in our study, though, highlighting how much of a draw it is for shoppers.
Get more insights
We hope our report inspires retailers to conduct their experiments to see which words, designs, offers, and placements bring the most success.
As Boston Consulting Group confirms, it’s time for brands to think smarter about their promotions. An ideal starting block is to test different variations and see which wins out.