Reel-time analytics

Free tools like Google Analytics and Yahoo IndexTools have made the analysis of website traffic an increasingly fruitful aspect of ecommerce. While such tools provide insight into patterns of online activity, they don’t take the next classic step in business intelligence by providing answers to ‘what if’ scenarios.

Armed with the website data, some organisations are achieving impressive business results by using more sophisticated testing tools, such as Omniture’s Test&Target and Interwoven’s Optimost, to extract meaning and value from the numbers.

LoveFilm, which rents DVDs through its website, sees its success as dependent almost entirely on the ability of its website to attract customers and encourage them to browse and order films.

Since LoveFilm started using ‘multivariate testing’ company Optimost (a specialist recently acquired by content management software firm Interwoven), it claims to have increased conversion rates by 10%.

Multivariate testing involves splitting traffic between different versions of a website, such as showing a different ad, offer or campaign in a particular content region on the home page, then monitoring which variations bring in the most conversions.

“With multivariate testing you can see what is and isn’t working,” says Craig Sullivan, LoveFilm’s product manager in charge of ‘digital and usability’. “We sliced up the homepage into regions and came up with 192 variants to put there, including a few crazy ideas along with some sensible ones. We found that by removing prices from our home page we increased conversion by 5.5%. It was completely counter-intuitive.”

The company ran another test in one of its newer markets, Sweden, where it was using “a nice two-page design” on its web site. “People were signing up and generally were happy,” Sullivan says.

“[But] we ran a test where we destroyed the two pages and put up a single page, and found a 60% increase in people starting the sign-up process.”

Such experiments marked a shift in mentality at the company, Sullivan says, because now customers drive how the content is laid out rather than the business. “It takes the guesswork out of designing the site,” he says. “Now it’s test then invest, rather than the other way around.”

Small changes made to the site can have a surprising impact on results, he adds. “Changing the button colour gave us another 5% [rise in conversions]. We simply changed the text on the button from white-on-red to red-on-white. I could not believe it.”

The company decided to use Optimost analysts rather than run the project in house, which would have meant employing three or four dedicated web developers. The decision also allowed the marketing department to run the testing, rather than IT.

An additional benefit of the technology, and perhaps one responsible for a degree of Sullivan’s enthusiasm, is that it cuts down on unproductive design meetings.

“There’s always someone in an organisation with a mad idea who wants to impose their will,” he says, “but the highest paid person is not the customer. Having this data removes the politics.”

With LoveFilm about to acquire Amazon’s UK and German DVD rental businesses – taking the subscription base to 900,000 – Europe’s stay-at-home movie fans are going to be seeing a lot more of that customer-driven design.

Further reading

Automated e-marketing at online retailer Pixmania
Developing its own market analysis tools has helped drive business growth at online electronics retailer Pixmania

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