So here they are, the results of my
Rebate Delivery A/B split test.
And after two weeks of testing, this test is showing the biggest difference between A and B that I have ever seen in any A/B split test.
A/B test results
These are the results of the test, comparing B (with rebates) to A (no rebates):
- Downloads: up 5.9%
- Trial Sign-ups: up 2.7%
- Number of Sales: up 24.7%
- Average First Purchase Value: same
- Profits: up 25.3%
Twenty five percent more profits by offering rebates! That is much higher than I expected. So rebates really help to increase our conversion rate.
I was expecting to see a slightly increased average first purchase value too. This did happen in the first week of the test, but later on that effect disappeared.
Of course, the big question is: Will the increased profits weigh up against the rebates we have to pay out? Let’s look at that now.
Rebate Claiming Statistics
Here’s some statistics I extracted from the RebateDelivery system:
Of all the customer who purchased something that included a mail-in rebate, only 40% actually used their personal link and visited the GetMyRebate website. And of those:
- 25% printed the rebate form (25% of total customers)
- 10% selected one of the alternative offers (4% of total)
- 29% just viewed the page and did nothing (11% of total)
It’s too early to tell how many people will actually send in the printed rebate form and thus get their rebate. It will take a couple of weeks before I have those numbers. Up till now, we have only paid out to 2% of all customers who were entitled to a rebate.
But even if all users who printed the form will actually get their rebate (which is unlikely), the extra profits will more than cover the cost of the rebates (and the RebateDelivery fees).
Finally, what do customers think of rebates? Do they understand the concept?
In general, US customers have no problems at all understanding what a mail-in rebate is, as it is quite common in US retail.
In Europe however, the concept of a rebate is less known. In the first few days of the test (before we had the little question marks with the explanatory popup), we received the following emails, all from European customers:
what happened with the rebate?
I was about to pay for the Movie Collector Pro which was Euro 39.95 and with the Euro 8.00 rebate the cost was Euro 31.95.
But when I was going to pay, it said that the cost was Euro 39.95. What happened with the rebate?
am I eligible?
What is the mail-in rebate?
I would like to purchase your Book Collector Pro and I’m not too sure if I’m eligible for the mail-in rebate.
be fair and honest
When I try to pay I can’t get the Mail-in rabate you write. the payment page said €39,95 even though it up in the right corner on the same page said €31,95. Be fair and honest and I will buy your software.
the cost of sending mail from Denmark
The Mail-in Rebate properly wok well in US, if I have to send a regular mail from Denmark to US the rebate will disappear in cost of sending the mail.
unacceptable and underhand
When ordering, I get a mail rebate of just over €8, so the new total is €31 after the mail rebate. However, when you look at the
total being charged ot the credit card before making the payment, it still shows €39, which is totally unacceptable and underhand.
It gives the impression that you receive a reduction and yet it doesn’t change the amount charged to the credit card.
If you are unable to provide clear and accurate pricing, then I will have no other choice than to find another cheaper software.
Of course, I’ll be switching on mail-in rebates for all customers now. But there is room for improvement in a couple of areas.
First, I am wondering if allowing customers to combine their discount coupon with a mail-in rebate would further increase the conversion rate. Currently we are not allowing that combination. When a customer uses a coupon, the mail-in rebate automatically disappears. I think this is going to be my next A/B split test.
Then, I am disappointed by the number of people who opted for one of my alternative offers. Maybe I need to add more attractive offers or at least work on the presentation of the offers. This could bring down the number of paid out rebates even further.
To be continued…
Quite surprising. Personally, as a customer I wouldn’t like such a promotion because of all the hassle. I know that I’m too lazy to do the printing and mailing, so you’d give me the feeling that I’ve wasted money. Which is worse than offering no discount at all. So I’m not really convinced about this idea…
25% extra profits is not convincing enough for you?
I had my doubts too, maybe its because we Europeans are less used to mail-in rebates, but the test convinced me that this *is* a good idea 🙂
Nice write up, really make you realize how much cash people are leaving on the table by not split testing.
Great write up. Will definitely implement the a/b strategy to my future changes. I really felt like I was missing something and this feels like the key.