Quick note before today’s issue.
Since I started writing again I’ve been getting asked if I’m taking on new clients. The short answer is no, I’m only working with a couple brands while I work on building my own.
But the longer answer is more interesting — I’ve been collaborating with Kanika on strategy for Bedabeda’s CRO service. While all the twitter bros (myself included) are still following the “traditional” CRO playbook (lots of small tests) Kanika has been innovating on a playbook specifically for DTC brands (fewer, full-page tests). I’ve seen the results. It works really, really well.
You can follow it yourself so I’ll publish a longer form piece breaking it down in detail. But if you’re a larger brand and want to get results, Bedabeda has a couple openings for new clients before the end of the year.
And yes, I have a vested interest in seeing her succeed. When I decided to stop taking on CRO clients I had the opportunity to work with a number of different agencies and software vendors. I chose to work with Kanika because I’ve been genuinely impressed with her for years now:
“A bird in the hand is worth two in the bush”
If you sell deodorant, do you want to sell 2 sticks of deodorant at a discount today, or one today at full price and one in the future?
There’s a lot of theory around not “cannibalizing your own sales.” But the above quote captures my philosophy perfectly. The harsh reality is that you don’t know if that customer is going to come back. Some will, most don’t.
For that reason, I think it’s always better to capture the revenue today than hope for it to come later.
Some people believe that you can have the best of both worlds. Just cross-sell other products instead of ‘cannibalizing’ sales.
To that point, I’m going to paraphrase Moiz Ali (founder of Native) — Cross-selling is the biggest lie in DTC. If someone is buying your deodorant, the thing they are most likely to buy from you is more deodorant. Not some shampoo or conditioner.
Of course there’s nuance here but if you’re struggling in the AOV department I hope I can convince you to give the easy thing a try — offering quantity discounts.
Quantity Discount Tiers
before I get into this, you might think “we can’t do that because X,Y,Z” and that might be true! But feel free to send me an email and I’ll help you think about how you can test this strategy.
Birdie primarily sells one product, and that product is usually bought one time. For them, a bird (no pun intended) in the hand is worth wayyy more than one in the bush because it’s not a renewable product. So there’s no argument of ‘cannibalizing’ sales to be had here.
In order to incentivize people to buy more than one device, Birdie offers tiered quantity discounts.
buy 1, get nothing
buy 2, get free shipping
buy 3, get 10% off
buy 5, get 15% off
This works really well to increase cart size. I know because they’re one of the few brands I still work with.
This technical details are less interesting but important so bear with me for a paragraph. In Shopify you can create quantity discounts in two ways: create new SKUs for “2-pack” “3-pack” etc with a different price OR you can use line-item discounts if you’re on Shopify plus. I always recommend the latter. When you do 2-packs, you have to sell 2 products of the same color or have a SKU for every combination of colors (1 blue 1 red, 1 blue 1 yellow, 1 red 1 yellow, etc etc….). The flexibility of line-item discounts means that you can simply say “if they buy 2 of these products in any color, size, etc, give them X discount”. This makes it easier to create flexible offers and have upsells in the cart, checkout, etc which we’ll look at now.
Adding Discounts to the PDP
For a long time the only mention of the discounts on Birdie’s PDP was below the add to cart button. Once someone added the product to the cart, they got to see the progress bar etc which made it obvious.
Admittedly a lot of people were probably missing it because it wasn’t obvious enough. So thanks to prodding by Ben’s team at Coldbru we’re now testing a bundle builder variation of the product page.
In the old format people maybe added one product to the cart, then they saw the progress bar and thought about buying more.
Now, they see the discount opportunities straight away. The test is fairly new so data is unreliable but we’re seeing a 20% boost in AOV so far. Not too bad.
Another format for displaying quantity discounts (and great if you’re using bundle SKUs instead of line item discounts) is a layout like this:
Here instead of forcing people to “build a bundle” you simply make the discounts they get for ordering larger quantities obvious. Imagine if they didn’t have the quantity offers:
It’s easy to guess that they would sell much fewer bottles of detergent without the offers in place.
The product page is just the start of where these offers should be.
Upsells in the Cart
Remember our idea about how cross-selling is a myth. If people buy detergent, the thing they probably want most is more detergent.
But here we see offers for other products that are frequently purchased together even when you only have one unit in the cart.
Don’t get me wrong, there is an argument for trying to get customers to buy other products. But I believe this is best done in the post-purchase flow where you can offer steep discounts to incentivize people to try new products. I’ll share more on this soon.
Here is what Birdie’s cart looks like. After someone adds a product to the cart, they see the progress bar telling them to unlock the additional tiers.
Embedded in the progress bar is a simple form for adding additional units to the cart.
The bottom of the cart then reinforces the savings they’re receiving:
We’re not going to waste an opportunity to present the offer so it doesn’t stop there.
Extending the offers in the checkout
The checkout has upsells set up conditionally based on what tier the user is in. If they have 1 device, tell them they can get free shipping with a second. If they have 2 devices, show them they can get 10% off with a third device. etc.
These offers were recently migrated so there’s little data but you can see the take rates here. If we only had the offer in the cart, we would be missing out on the 6% of people who choose to go from buying 2 → 3 devices while in the checkout.
Here’s what that looks like in practice:
Do we go as far as post-purchase?
As I said, Birdie is a unique brand. For most brands I would recommend using post-purchase offers to get new products into the cart.
But again, people want more of the thing they’ve already bought. So currently we take one more shot at getting people to add another product to their cart.
At this stage, we can’t have a discount apply to the products they’ve already purchased so we offer a larger discount on this one individual device.
After testing different variations we found that anything over 25% discount doesn’t make a meaningful difference in take rate.
The next issue will be about building a post purchase funnel. By getting creative with tagging customers, I think its the best way to get customers to try new products and strategically grow your LTV.
In the meantime, if you have any questions about how you can use quantity discounts feel free to send me an email!
Great newsletter - thanks for sharing