May 17, 2005, 12:00 AM

What offer testing told

Instinct told marketers at craft and fabric site that customers would prefer the offer of free shipping to the offer of 10% off the purchase of two sewing machines – but a new testing service from Offermatica told JoAnn something else. marketers knew shoppers don’t typically purchase two sewing machines at a time, so when testing that offer on its web site against the offer of free shipping on any purchase, it figured free shipping would get the stronger response – but it figured wrong. A four-week test of the two offers showed that 10% off two machines was the better performer, increasing conversions by 30%, increasing average order value by 137% and improving revenue per visitor by 209%.

“We found customers were pulling their friends to gather to purchase,” says Linsly Donnelly, COO of web site operator, Idea Forest. Without an actual test of the two offers, would have promoted the free shipping offer and left money on the table, Donnelly adds.

To get those results quickly, used a new, hosted testing and optimization service from provider Offermatica. The hosted model cuts the time and staff resources usually required to implement and manage A/B and multivariate testing in-house, the company says, with a simple interface that lets marketers create and run content tests on the site directly, without having to involve IT.

The service allows business users to define offers, e-mails, ads and other page elements to be tested by inserting cut-and-paste Java script into the site code to create a test template. Offermatica servers automatically generate and publish test content to the template according to pre-set rules. That flexibility in the testing process lets marketers try multiple interactions to determine quickly and on their own which are the best for an individual customer or target segment, the company says. While traditional testing requires the creation of multiple new pages and can take months to produce results, the new service allows business users to run numerous tests in the time and cost taken by one traditional test.

Over the six months prior to its launch this week, the service generated an estimated $35 million in incremental revenue for the 20 retailers, ranging from to Restoration Hardware, that participated in the trial, according to Offermatica.

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