CD delivery companies (we have worked with SwiftCD and CustomCD) are always pushing us to have “Delivery on CD” pre-checked. Understandably, because this is bound to sell more CDs and thus bring them more business. And automatically adding a $10 Priority Support subscription is sure to result in more subscriptions to that service.

Sounds good, doesn’t it? Making more money on each sale, who can say no to that?

Unless…
… the sudden addition of extra costs is putting people off. Some customers may even feel cheated. Sure, one can easily (?) remove the extras from the cart, but that’s all extra steps in your checkout procedure. Overall, making people opt-out on your up-sells may cost you sales.

Of course, it’s all about the bottom line: Will the extra profits per sale compensate for the lost sales?
Now we can all have long discussions about what will happen. And I could easily write several articles about the expected effects.

As always, there’s only one way to find out for sure: An A/B split test.

The test: Cart A vs Cart B

The test is pretty simple. The big blue buy buttons on my product pages (see below), either take the customer to cart Version A or cart Version B.

Version A is the opt-in version. The initial cart only contains the software the user select, then he can optionally add extras like the Delivery on CD and Priority Support.

Version B is the opt-out version. The cart automatically contains both extras, but these can be easily removed using the little red “X” buttons.

The results

After one week of testing and 232 sales counted, these are the results:

• Sign Ups: -2.4%
• Sales: -17.8%
• Average First Purchase: +5.6%
• Total Profits: -12.8%

As you can see, it confirms the expectations: the Average First Purchase went up and Sales decreased. But the extra money made per sale is not nearly enough to compensate for the loss in sales quantity.

What does this mean?

So does this mean we should not automatically add or pre-check extras like CD-Delivery and Support subscriptions?
Well, not like I did it in the above test. But I have not given up yet. Here’s a couple of ideas I would like to test later:

• Test with just the CD or just Support auto-checked. Maybe one of them is causing the lost sales. Looking at last week’s sales I am seeing a lot of CD Delivery sales, but very little Priority Support subscriptions. So most people are removing the support option. Is there hope for a design that has just the CD Delivery auto-added to the cart?
• Make it even easier to opt-out, e.g. by making the “remove from cart” buttons clearer and bigger.
• Offer both options as pre-checked check boxes right in the big Buy box on the product page, so that users can uncheck them even before clicking my big blue buy button.
• Offer a “Premium Pack” option on the product home page, that has both extras included in a bundle, with a separate Buy button and the total price of $69.95 listed right there. We have used a similar solution before for a barcode scanner bundle and that was working well.

The reminder email

First let me show you the reminder email I sent out on Saturday. It took me about 5 minutes to write.
And as you can see below, that was time well spent

Two days left to upgrade Music Collector for $14.95

Hi John,

Quick reminder:
There’s only two days left on the special offer for upgrading
your Music Collector license.

Upgrade to version 9 for Windows or version 3 for Mac OS X, for just $14.95:

http://collectorz.com/up.php?product=music&key=123456789012

On Monday May 17, the upgrade fee will be back to its regular $24.95 level.

Don’t miss out. Upgrade your license today.

Alwin
Collectorz.com, http://www.collectorz.com
Facebook: http://facebook.com/Collectorz

The results

Here’s the results of my upgrade week in a nice chart. I have include some extra days from before the Upgrade Week, so that you can better see the effect of the offer.

• The first email caused a huge peak in upgrades. That day we sold about 30 times as many upgrades as in the days before.
• The quick reminder on Saturday, caused another peak that was exactly as high as the first one.
• The drop-off after the the 2nd peak was much less than after the first one, probably because Sunday was the last day (urgency).

If you are doing a limited-time special offer, don’t forget to send out a final reminder email 1 or 2 days before the offer ends. If you don’t, you may be missing out on nearly 50% of sales!

Here’s the email I sent out today, to all pre-v9 customers:

Upgrade your Music Collector for just $14.95 (6 days left)

==========================================================
Upgrade Music Collector for $14.95 :

http://collectorz.com/up.php?product=music&key=123456789012

( offer ends Sunday May 16 )
==========================================================

Hi John,

This is Alwin, with a great (but very temporary) upgrade offer for you.
But first, some news about the Collectorz.com online music database…

In February, when we lost Amazon, we added two new data sources to our
online music database: Discogs and MusicBrainz. This resulted in more cover
images (front and back!) and improved success rates for CD-ID searches.

But because of the added sources, the search results in the Add Albums
Automatically screen had become a bit messy.
This was particularly noticable for CD-ID and barcode searches. These had lost
the laser-targeted effectiveness of single exact matches. Not good.

So 4 weeks ago, we decided to fix all this once and for all.
Robbert and Dinh got to work and rewrote most of our search engine.

Their changes (released 2 weeks ago):
- CD-ID and barcode searches now give you single, auto-checked matches.
- Improved success rate of CD-ID searches: it now recognizes 91% of your CD-IDs.
- Artist/Title searches now return much less and better targeted results.

But we were not satisfied yet.
So while Dinh got back to his iPad project, Robbert focussed on barcodes.
After the loss of Amazon the “hit rate” on barcode searches had dropped to
about 45%. Ouch… But Robbert now has it back up to 65%.
Not good enough, I agree, but a big step in the right direction.

Anyway, why am I telling you all this?

Well, I guess what I am trying to say is that Music Collector is not a
stand-alone piece of software on your PC or Mac. The world (read: internet)
around us is changing continuously. Amazon goes, other sources appear, some
devices go out of fashion (classic iPods), new devices appear (iPhone, Android,
Blackberry, iPad), web-based software solutions are getting more popular…

And the 12-man Collectorz.com team here at the office is constantly updating
Music Collector, our mobile apps and our server-side software to keep you
connected (pun intended) to this ever-changing software landscape.

This year alone we will bring you: mobile apps for iPad, Blackberry & Android,
plus we will finally release the music edition of Collectorz.com Connect.

But you do need the latest version of Music Collector to enjoy our efforts.
And our customer files show that *you* don’t own that version yet.

Because I would hate to see you left behind, I have created a temporary
upgrade offer, valid through Sunday May 16 (that’s just 6 days from now):

* Upgrade your Music Collector for only $14.95 (regular upgrade fee is $24.95)

http://collectorz.com/up.php?product=music&key=123456789012

Need a reminder of what’s new? Go here for full info and screens:
v9.1 Windows : http://collectorz.com/music/upgrade.php?key=123456789012
v3.4 Mac OS X: http://collectorz.com/music/upgrademac.php?key=123456789012

And remember, once you have upgraded you get to download all of this year’s
minor updates free of charge.

This offer ends in six days, so don’t miss out.

Alwin
Collectorz.com

On Saturday, I will sent them a nice “two days left” reminder. Usually, that results in a huge peak in sales, bigger than the first day peak.

Don’t be afraid to keep reminding your “old version” crowd of your cool new version. Eventually they *will* upgrade You have spent too much time and money creating all those new features to just let people get away with not upgrading.

From the shop, via the upsell interstitial page and the name/address page, to the payment details page and finally the order confirmation page. I have written some new back-end PHP classes and am now rewriting all website pages based on those classes, making the pages more consistent, and more importantly, easier to maintain. Easy maintenance is essential, because I am tweaking these pages quite often.

I have already posted about my upsell interstitial page a while ago, which was the first page I based on the new back-end classes. This long Easter weekend I have completely rewritten the first page of the check-out, the shop page.

The Collectorz.com shop

This page has always been a challenge, because it easily becomes pretty complex. We have seven downloadable products, all with a Standard and a Pro edition. For 3 products we also have Mac editions. Plus we sell subscriptions for our 3 Connect web-apps.
Then there’s the Priority Support and CD-ROM delivery options. And of course we offer two types of barcode scanners (a third one will be added soon).

In fact, this page is so complex that for our recommended Buying Choices on our product pages, we skip this shop page, taking visitors directly to our upsell page. But a full shop page that shows everything we sell is a necessary evil, so I keep trying to make it as simple as possible.

What’s New?

Of course the rewrite was a perfect opportunity to implement further improvements. Let me give you an overview of the changes I made compared to the old page. The best way to see how it works is to play with the live Collectorz.com shop, but here’s a screenshot for easy reference:

The changes:

• Cleaner design, using white-space for separation, not borders.
• Both Windows and Mac programs are now visible. The old page showed just Mac OR Windows editions based on the browser agent, but that caused confusion.
• Better handling of empty carts. Now shows “- your cart is empty – ” and disables the Continue to Checkout button.
• Easier switching between Standard and Pro editions. Previously one had to remove the Pro edition from the cart, then add the Standard edition.
• It’s now easier to remove items from the cart (people missed the little red X-buttons in the cart). You can now remove on the left side too.
• Added our iPhone apps, even though they cannot be purchased through our shop, just linking them to the iTunes App Store.
• Prominent random (but recent) testimonial.
• Added images of most important payment methods.
• Prominent 90-day money back guarantee
• Several question-mark icons that open small explanation popups (created with Thickbox). The old page had some “more info” links too, but these linked to other pages on the website, taking people away from the Shop page.
  The new page has popups for:
  • Standard vs Pro
  • Priority Support
  • Barcode scanner comparison
  • Shipping and handling (about delivery times)
  • Coupon Code (with the hint: “Don’t have a coupon code? Google is your friend!” )

What’s next?

Currently, the Shop and the subsequent Up-sell pages are consistent in look and feel. Next up is a rewrite of the other pages, the name/address page, the payment details page and the order confirmation (or “thank you” page). I am planning to make the look of all these pages fully consistent, then add some kind of “Step 2 of 5″ indicator at the top, showing the buyer where he is in the check-out process.
The payment details page is going to require some creative programming (read “hacking”), because that step does not happen within our site, but on the RBS server.

Oh, before I forget, all feedback on the Shop is very very welcome.
Just post below. Thanks!

Technical

Multi-platform development
One of the advantages of web-app development is that you can serve users on all platforms with one code base. We invested a lot of time and money in creating Mac editions of our main 3 products, but for the Connect products we don’t have to. It even works on Linux
Of course, web-development has it own problems: getting your pages to look the same in all browsers. This can be a nightmare, especially if you try to support IE6. But our lead web-developer Robbert had a lot of experience in this area, so we’ve got it covered.

Maintenance and software updates
For online applications, all code runs on your server, which makes it possible to do live fixes and implement small improvements. As soon as you put the new code up on the server, every user is running the latest version. No builds, releases or uploads for you, no downloads and installs for the users. Quick and easy.
However, it’s important to stay alert though and keep rigorously testing your code before it goes live. Because it’s so quick to do fixes, it’s easy to get careless.

The same goes for adding new features, you can do so continuously. There is no reason to “group” enhancements and features into minor builds and major updates. For our Windows and Mac apps, we always try to keep the frequency of maintenance builds as low as possible, because it takes at least an hour to safely release a new stable build. Also, we often with-hold major new features for the next major upgrade, so that we can charge an update fee for it. For online apps, you’re usually charging a monthly subscription fee which includes all updates, so you are freed of the “major update cycle”.

There’s a catch though:
For downloadable, client-side software, users always have the choice of not upgrading to the latest version. Either because they don’t need the new features or because they don’t like the changes you made. Even (or especially!) if the changes are cosmetic.
For web-apps, users don’t have that choice. When you add a feature or change the look and feel of your app, it’s immediately live for all users, whether they like it or not. So for online apps, you should think a little longer before you make changes or add stuff that not every user may like.
(At Collectorz.com, we have removed features from our apps a couple of times, because we found that our software would be better without them. Less is more… If this generated complaints from users, I could always tell them to just downgrade to the older version. Not possible for our online Connect service.)

Live stats on usage
Another thing that has proven useful, for both technical and marketing reasons, is the ability to get live statistics on how users are using your software. Which features they are using, the sizes of their databases, the problems they are running into. Good data to have.

Privacy, security and data safety

For online apps, all user data is stored on your servers. Apart from the technical issues, like hosting, bandwidth, performance and disk space, this also causes some interesting new areas of “concern”:

Privacy and security
If you store user data that could be regarded as personal, then you’d better make sure your server and software are secure and this data cannot be accessed by anyone who is not supposed to see it. And even if you are fully secure, it’s still wise to have a good EULA and Privacy Policy in place. For Collectorz.com Connect, we hired a lawyer specialized in this stuff. Better safe than sorry.

Data safety
Even if the data is not of a personal nature, you still want to take good care of it. For offline software, the user is responsible for his own data and for having backups of it. But online, you are responsible. You really won’t want to loose or corrupt the data of your customers. For Connect, we have implemented a backup scheme that makes a local backup of all user data on a daily basis. And before every risky software update, we make an extra backup, just in case.

Customer Support

Another great thing about web-based applications is the advantages for customer support.

The first advantage is that all users are running the same version, the latest and greatest version that is. No problems with users running into bugs that you fixed ages ago, just because they neglected to update their software.

Also, the user’s software and their data is on your server, so if a user reports a problem you can simply log in to his account and take a look. In general, once you can reproduce a problem, you’re more than halfway to fixing it. And online, most issues are instantly reproducible, even user data dependent problems (and we all know what a nightmare these can be).
In many cases, you can even immediately fix the problem for them or help them live to accomplish a tricky task. Imagine how happy your customers are if you tell them:
“Just hit refresh in your browser now and it’ll be fixed”.

Sales

Last but not least: our experience selling online software, or, to be more precise, selling software subscriptions. Because that is the main difference: you are selling a subscription-based service, not a software product for a one-time purchase price. Huge difference, both for you and for your customers.

Pricing
Of course, the first question you run into is pricing. For regular, client-side software, picking a good price is the most difficult marketing decision already, but I found that I had even more problems deciding on the best price for the Connect subscription fees. And, to be honest, I don’t think I’m there yet.

We started out with a $40 yearly fee, plus a $30 setup fee. For existing customers, we had a 50% discount on the first year and they didn’t have to pay the setup fee.
Soon after launch, we dropped the setup fee entirely, as I felt it didn’t really help to attract new customers to the service ($70 just to get started is simply too much).

Later on, I added the possibility to pay for just 3 or 6 months. At the same time, I started presenting the fees differently. I now list the “regular price” as $4.95 per month (which is indeed what you pay if you just subscribe for 3 months), plus I present the 6 and 12 month subscription prices as “volume discounts”. For instance:

One Year Subscription: Regular Price: $59.40, Discount: $19.45, Now: $39.95

This seems to work a lot better. We are now seeing new users sign-up for all 3 subscription levels (3, 6 or 12 months).

The funny thing about subscription fees is that users seem to think about them differently. I mean, sell a $50 software product and nobody asks what you need that money for, or what you are going to use it for. But ask a $39.95 yearly subscription fee for an online, hosted application and people suddenly start thinking about where that money is going, whether hosting their data online is really that expensive. While the same people never seem to be having problems paying $50 for your Windows software, plus $25 per year for major upgrades.

Here’s an example of one user’s feedback on our Connect pricing:

You want to charge $39.95 a year to simply host LINKS for us in your database (with a subset of personal information). Yes, if I order before October 31st, I get it for $19.95 for this year. Let’s move past the marketing ploys for now because even that is a lot to charge for LINKS and TEXT to be hosted on your servers, especially since I pay $39.95 a year to host UNLIMITED data with UNLIMITED bandwidth and GIGS in mySQL tables with my current web host provider. That of course is in addition to the over 200 GB of FREE data I host on Windows Live and other related resources.

We have seen several forum posts and emails along the same lines. All from existing customers, who are used to our pricing for our Windows and Mac apps. I don’t expect this to be much of a problem for new customers who start off with the online service.

Selling to existing customers
Which brings me to selling Connect to our existing customers. As I posted before, this was one of our goals when designing Connect: to be able to sell it as a sharing / online publishing add-on to users of the Windows and Mac OS X edition. We invested a lot of time creating a smart two-way syncing system, so that users can synchronize their collection data between their Connect account and their local database. Cool stuff.

Up till now, we have sold a Connect subscription to about 4% of all customers owning a license for the latest version of Movie Collector (Windows or Mac). Not bad, but I was expecting to sell more in the first couple of months. Now there are still some limitations in the usage of Connect, especially related to the syncing system, so I expect to sell some more once we resolved all of these. Maybe tweak the pricing…

Selling to new customers
We haven’t sold Connect to many new customers yet. I have just started slowly promoting our Connect editions to new customers using Google Adwords. Slowly, because the Connect website hasn’t received my usual level of tweaking and tuning to optimize its conversion rate. I don’t want to risk loosing too many regular Adwords sales because the Connect traffic isn’t converting yet.
But as I said in my Art of Ignoring presentation, one needs traffic to measure and optimize conversions, so I guess I will have to take that risk soon and start directing a lot of costly Adwords traffic in the Connect direction. Scary…

I will let you know how this is working out. Hopefully I will be able to present some data in my ESWC presentation in a few weeks. See you there.

Here’s an update on our experience selling iPhone apps.

Sales

I was expecting to sell just enough of them to my existing customers, so that we could cover the costs of development. Then after that maybe get some positive effects from the cool looking screenshots on our website, convert a couple more visitors into buying our stuff.

But overall, sales are higher than I expected, much higher in fact. Here’s a weekly sales graph:

I’ll keep the absolute sales number to myself
But for each of the apps you can see a high sales peak when we announced it to existing customers of the respective Windows software. For the movie, book and music apps, there was a second, smaller bump later, when we updated our Mac software with the necessary iPhone export features. And for each of the apps, those first peaks more than covered the development costs. Which was a nice surprise of course.

But what I am even happier with, is the fact that sales are still strong. After the launch peaks, sales have dropped to a nice steady level. The iPhone apps are now generating a considerable amount of extra monthly profits. Enough in fact to make it worthwhile to invest more development time.

It’s hard to tell whether the availability of iPhone companion apps is actually convincing more new visitors into choosing our software over that of our competitors (hi Max!). Partly because of the inability to track iPhone sales. More about that in the next paragraph.
But my idea is that it gives our website an more “up to date” feel. Even if you don’t own an iPhone, you may be impressed by the fact that our company can do this kind of stuff

Tracking

As you know, I love tracking everything. And in this regard, selling iPhone apps is a nightmare.
Apple gives me nothing to work with, I don’t even get instant sales notifications. I have to login to the horrible iTunes Connect system to download my sales stats manually. Initially I did this every day, downloading the CSV reports, importing them in Google Docs, summing the counts to get a nice graph per app. But this was so much hassle that I am now doing that per week only.

But what’s even worse: Apple doesn’t give me any customer information. Just overall sales numbers per day/week/month and per region. So I have no idea who purchased my apps. And I have no way to link iPhone sales to existing customer data.

This means I can’t follow up by email with tips or news about updates. And it makes it impossible to send targeted, segmented email campaigns. E.g. for a new campaign to sell the Clz Movies app, I am forced to just email all Movie Collector users again. I have no way to exclude the ones that already purchased my iPhone app. That just sucks.

Marketing

Two of my favorite ways to sell stuff are Google Adwords, Discount Coupons and Upselling during checkout. But for selling iPhone apps, I’m out of luck on all three.

Adwords lets me bid on terms containing the word “iphone”, like “iphone dvd organizer”, but I cannot use the word iPhone in my ad because of trademark violations. This makes it hard to write high CTR ad copy.
(I read somewhere that if you contact Apple they may give you permission to use their trademarked words. I haven’t looked into this yet.)

Apple’s App Store does not have a discount coupon system. Which is a shame, cause I would love to do temporary promotions for my iPhone apps to specific segments of my customer base. Of course I can temporarily lower the price of my apps, but then everybody gets the lower price. Could be a fun experiment too, but I’d prefer to use coupons. Just gives me more control.

iPhone apps can only be purchased through the App Store on the iPhone or iPod touch itself or through iTunes. It is not possible to sell them yourself, in your own online shop. IMO this is one of the reasons of the success of iPhone apps: having a simple one-stop-shop for all iPhone software, just enter your iTunes password to buy stuff.

However, it also means that I cannot bundle the iPhone apps with my regular software. I mean, how cool would it be to if I could just offer a “Movie Collector plus Clz Movies” bundle offer in my own shop? Or what about having the Clz Movies app as an upsell on my Upsell page. A $10 iPhone companion app would be the perfect upsell…
I am doing the best I can to make all my customers and new visitors aware of the mobile apps, but if they want them, they need to make a separate purchase in the App Store.
Why not allow me to sell some kind of vouchers that my customers can then use to download the iPhone apps? How hard can it be?

Customer Feedback

In general, our users love the iPhone apps. We already have many favorable reviews in the App Store. And we received some great suggestions and feature requests. We are implementing most of those in the upcoming 1.1 updates.
Not all though… some users would like to see the iPhone apps grow into full iPhone editions of our Windows/Mac software, including editing features. But that’s not where I want to take these apps, at least not at the moment. They have been designed as mobile viewer apps, as companion apps for the Windows editions. Adding editing capabilities would complicate everything (both code and UI) and I don’t expect any extra sales from it.

We did get some complaints about the $9.99 price tag. A lot of iPhone apps are cheap, ranging from $4.99 for popular games like Peggle, to $0.99 for small gadgets, to free gimmicky apps.
However, judging from the sales, $9.99 seems to be a good price. Maybe we would sell a couple more if the price was, say, $4.99. But I am sure that we would be making a lot less money

Finally, an interesting effect I am seeing is that users of other mobile devices (Blackberry, Windows Mobile, Android, etc…) are quite upset with us doing iPhone apps only. Some of them really feel discriminated and accuse of of being Apple zealots. We have seen weird discussions on our forum, with Blackberry users bashing the iPhone’s features, bringing up sales numbers of mobile devices, ultimately demanding that we create Blackberry apps too, because there’s more Blackberry devices around than iPhones…
I tried explaining that the App Store has sold more software than all other mobile devices together and therefore it makes more sense to create iPhone apps. But of course, that didn’t help much

What’s next?

So will we ever create similar apps for Blackberry or Android? Windows Mobile maybe? Mmm, don’t think so. I don’t think the extra development costs will ever be earned back. And what’s more important, we do already offer an alternative solution for other mobile device with our Movie Collector Connect web application. Connect editions for books, music, games and comics are in the works.

I’d rather invest more time in improving the iPhone apps, try to sell some more of those. Which is what we are doing now. We are working on 1.1 updates for all five apps, improving the user interface and performance, adding some more fields and a couple of missing features.

At Collectorz.com, we sell seven software products (each available in two editions), five iPhone apps, two different barcode scanners, plus we offer CD delivery and a paid support option called “Priority Support”.

The software products are all related and targeted at the same type of customers, so cross-selling has always been important for us. And with the introduction of the barcode scanners we added some great stuff to up-sell to new and existing customers.

Before telling your about our current solution, let’s look at the various methods for cross selling and up-selling we tried since we added our second program.

Overall Buy page with extra cross-sell interstitial

In an attempt to make every buyer aware of all our software products, we always took them through our overall Buy page, a product-selection page showing all our programs. It had a prominent message about our bundle discount (20% if I remember correctly) pushing them to select multiple products.
Stubborn customers who still dared to select only one program, got hit with an extra cross-sell interstitial page, reminding them that they could add a second product for only x dollars.

This worked great for a while. But our Buy page got more and more complex, because we added more programs, added the barcode scanners and started offering two editions (Standard and Pro) for each of them. Which didn’t exactly help to improve our conversion rate.

Pre-fab 3-program bundles, straight to Checkout

Then, by accident really, we found a better solution.
We wanted to do a special Christmas Offer, so we created a bundle of our three most popular programs (Music Collector, Movie Collector and Book Collector), the laser barcode scanner, a software CD, plus one year of Priority Support. All for just $199.95, at the time that was a $60 discount.

The special bundle was prominently listed on all product home pages, its Buy button taking buyers directly to the Checkout page, skipping both our complex Buy page and the cross-sell interstitial page.

The offer was a huge success, so on December 27, we just renamed the offer to New Year’s Offer, extended its end date to January 31. And it kept selling, like crazy.
This “temporary” offer has been up on our website for several years, we just renamed and extended it every couple of weeks. We celebrated everything, Spring, Summer, Easter, Valentine’s Day, Mother’s Day, Father’s Day, new software versions, big movie releases, etc.. I’ve seen some pretty creative offer names

Single program scanner bundles, straight to Checkout

Last year, Sytske and I were at a Perry Marshall seminar. After out “hot seat”, presenting the Movie Collector product page to the group, our friend Joshua Boswell made the following observation:
The prominent presence of the Special Offer bundle could be diluting our DVD cataloging message. By immediately confronting movie fans with the possibility to catalog their CDs and books too, we may be confusing them, making them check the other software first.

Joshua suggested to have the product page focus more on the specific product or solution that people had been looking for.
“They came looking for a DVD cataloging solution, so sell em Movie Collector. Up-selling to barcode scanners, great. But no immediate cross-selling. Do the cross-selling on the back-end.”
(Both Joshua and Perry are big fans of selling stuff on the back-end using auto responder email sequences. Nothing is easier than selling to existing customers.)

So we did. We stopped doing the Special Offer and replaced it with two new pre-fab bundles, both with Buy Now buttons that took the buyer directly to the checkout.
A low-end bundle with Movie Collector Pro, a cheap barcode scanner, CD delivery and Priority Support, sold for $89.90. Plus a similar package, bundling Movie Collector Pro with the expensive laser barcode scanner, going for the total of $219.95.

Yes, that’s right. That’s $20 more than the old Special Offer, but having only one program instead of three. Okay, by then, we had replaced our laser scanner with a better and slightly more expensive one, but still… No discounts whatsoever, everything full price.

And amazingly, it worked.
That is, I was amazed, Joshua was more like “I told you so”
The changes increased both our conversion rate and our average first purchase value (the front-end sales). Of course we sold less software licenses, but that was great because it left us more stuff to cross-sell on the back-end.

Simpler bundles, via up-sell interstitial page

However, in the past few months, two things began bothering me, issues that I suspected were hurting conversions.

First, the lack of flexibility: some users simply don’t want or need the CD or the support service. Or some do want to bundle the scanner with two programs instead of one. Of course, that was still possible by going through our complex Buy page, but not a lot of users found it (or understood it).

Also, I wasn’t happy with the $219.95 price tag of the laser scanner bundle. While we were doing the 3-program Special Offer, we had experimented with its price and setting the price just below $200 sold best.
But I didn’t want to just lower the price of the bundle, cutting my margin with $20. The only way to get it to $199.95 would be to remove the the CD-delivery and priority support from the pre-fab package.

So here’s what we did: we stripped all prefab-packages down to the basics, either just the program, the program plus a cheap scanner or the program plus a deluxe scanner. Then I made their Buy buttons go to a new interstitial page that offered relevant upsells only (as opposed to the Buy page that just offered everything else).

Of course, the obvious upsells to present there are the CD delivery and the priority support. For software only purchases, both scanners are great entries under “Other Movie Collector customers also bought:”.
And for orders that already include a scanner, I now sneakily try to cross-sell to our other scanner-enabled software, figuring “hey, if you are going to buy a cool piece of hardware, why not get full use out of it?”.

Here’s a screenshot of the upsell page, showing the offered extras based on a software-only order:

Or try it live here. Tip: try adding either one of the scanners.

Now, you know I don’t make drastic website changes like this without A/B testing, especially not for pricing and checkout related changes. You never know what might happen. In this case, I thought there were the following risks and potential benefits:

Risks:
- Less CD and Support sales because these are not included by default anymore. Possible resulting in lower first purchase values.
- Lower conversion rates because of the extra step in the checkout process.

Possible benefits:
- Higher conversion rates because of lower prices of the pre-fab packages.
- More scanner sales because they are more aggresively pushed to people initially opting for just the software.
- More software sales because of the cross-selling to scanner buyers.

So in the past two weeks, I have been testing the old situation (= A) versus the new setup (= B). For clarity:
A: Program + scanner bundles, including CD and Support, clicking straight to Checkout.
B: Basic (and cheaper) program + scanner bundles, taken through the up-sell interstitial page.

Result for Up-sell Interstitial A/B test

This was quite an important test, so to be sure about the results, I let it run for two weeks. During these 14 days I tracked sales for a total of 506 new customers (customers who visited the Collectorz.com website for the first time within this period).

Amazingly, the distribution over A and B was 253 vs 253, meaning that the conversion rate was more or less the same in both groups (not exactly the same, because the number of visitors in B was slightly lower, making B’s conversion rate 0.67% higher).

Disappointing? Not really, because the Average First Purchase Value in group B was 10.3% higher, making the total profits in group B 11.4% higher than those in group A.

Other results: The number of people who opted for CD delivery stayed the same, but Priority support purchases are down somewhat. Also, we sold exactly one Collectorz.com Mouse pad

Conclusion

Don’t hesitate to push people to buy more stuff during checkout, as it can help to squeeze out a couple more dollars. But be careful trying to cross-sell your other programs. Don’t offer them too prominently on your landing pages. Only offer them as up-sells during checkout when they are targeted. Otherwise, leave the cross selling until later and make them aware of your other software by email.

Furthermore, an extra step in the checkout process doesn’t seem to hurt the conversion rate. That is, as long as it offers sensible, targeted up-sells (no mouse pads!) and can be easily skipped. Or was it the lower bundle prices that compensated the loss in conversions caused by the longer checkout?
Mmm… I think I need to do more testing.