Test #009: Increasing Incentive through Subscription Discounts


PARTNER: TED'S BRAIN SCIENCE PRODUCTS
COMPANY TYPE: PAIN RELIEF-HEALTHCARE, ECOMMERCE
EXPERIMENT QUESTION: IF WE PROVIDE A SUBSCRIPTION OPTION THAT DISCOUNTS THE PRODUCT, CAN WE INCREASE INCENTIVE AND ECOMMERCE CONVERSION RATE?


Introduction:

Ted's Brain Science Products is a Dallas-based healthcare company that specializes in developing pain relief solutions. They found that two natural ingredients–methyl salicylate from the wintergreen plant, and resveratrol from grape leaves or Japanese knotweed–appear to work together in a brand new, previously unknown way. There flagship product, Ted's Pain Cream, is the first of it's kind.

After taking a close look at their historical eCommerce data, and after receiving feedback from regular purchasers, Ted's Brain Science Products decided to create a subscription program for their most popular product, Ted's Pain Cream. After developing a 'subscribe' option, they wondered what the net impact of the 'subscribe' option was on their product pages. They asked: Will providing a subscription option that offers a discount increase incentive and eCommerce conversion rate?

 

 
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Control

This is the main site's control version of Ted's Pain Cream 'Product' page. This page does not contain a 'subscribe' option. Here are the results observed for the control page:

Control: 1,318 visitors, 157 conversions (12.1% eCommerce Conversion Rate)

 

 

 

 

 

 
 
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Treatment

This is the treatment version of Ted's Pain Cream 'Product' page. We added in a subscription option directly under the 'One-time Purchase' option that included $2 off. Here are the results observed for the treatment page:

1,412 visitors, 163 conversions (11.6% eCommerce Conversion Rate)


RESULT: INVALID TEST RESULTS


 

Analysis: 

This experiment did not cross the 95% confidence threshold, and therefore did not validate. Despite not showing a valid increase or decrease, this test still proves to be an important learning for Ted's Brain Science Products.

During the span of this experiment, we found that adding a subscription option to the product page made essentially no difference in the user's likelihood to purchase the product. It's clear that the ability to enroll in a subscription program to regularly receive the product did not hinder or improve the product's pages ability to convert visitors into customers. 

That fact that the addition of the subscription option did not hinder performance is worth focusing on. Even though it did not increase the initial eCommerce conversion rate for page viewers, it did increase the number of guaranteed return buyers. In other words, Ted's Brain Science Products was able to increase the number of individuals who (by means of a subscription) purchased the produce more than once. 

There's a few questions that we need to consider when understanding the true impact of these results: 

  1. Is it worth discounting the product by $2 in order to add a new subscriber?
  2. What is the average number of orders experienced in a 'subscription' before a cancellation takes place? And how does that compare to average number of order for normal 'non-subscribers' ?
  3. Finally, what is the net cost for signing up a new subscriber, and/or upgrading existing customers to the 'subscriber' status?

A deeper analysis into Ted's 'Subscriber' customer behavior will help us answer these questions–and it will take some time to fully understand the subscription cycle. For now though, we know that at least 50 new subscribers were added to Ted's subscription program. 

Concluding thoughts: 

Sometimes in testing, an invalid or statistically insignificant result is OK. In this case, we were hoping to see that the eCommerce conversion rate remained, at the very least, unchanged. We found that to be true here.

It's likely that a regular subscriber has a higher lifetime value than the normal 'non-subscriber' purchaser. If we can add more subscribers into the program without hurting our eCommerce conversion rate by simply offering page visitors the opportunity to subscribe, than we definitely should. These results could also potentially impact the way Ted's Brain Science Products seeks after new customers and the emphasis they place on their subscription program.

Grant Klembara