|Testing the Power of Urgency on Offer Pages|
|Friday, 18 August 2006|
Topic: Testing the Power of Urgency on Offer Pages
How to increase conversion rates with real and implied Urgency.
We recently released the audio recording of our clinic on this topic. You can listen to a recording of this clinic here:Testing The Power Of Urgency On Landing Pages
In the world of offline direct mail it has long been understood that creating urgency increases conversion rates. Typically a special offer of some kind will expire on a particular date.
Is the same true of the web?
Do expiry dates or warnings about limited supplies actually work?
And if so, is there a best way to express urgency, and are there pitfalls to avoid?
To answer these questions we recently ran some research tests, and conducted an interview with a senior executive from a low-cost computer parts etailer.
The data we collected provides some important insights into how online marketers should best use urgency as a means to increase conversions.
Section 1 – The fundamentals of using urgency to increase sales
The practice of using urgency as a means to drive sales is well established in both offline and online media.
Whether you are a car dealership buying time on television to announce offers and discounts on all vehicles purchased before a particular date, or you're an online company selling products, information products, subscriptions or courses, using a cut-off date will almost always increase sales.
However, while using urgency is a powerful promotional tool, it should not be used indiscriminately or without forethought.
When we were planning our tests on this topic, we kept the following guidelines in mind:
While simply adding an "offer expires on this date" starburst on your page may seem like a very simple way to boost sales, our own experience tells us that you will do better with careful and thoughtful planning.
Section 2 – The impact of a timed-limited incentive, and how it was promoted.
This research comes from the promotion of our own service – the Marketing Experiments Online Certification Course.
The promotion of conferences, webinars and online courses is never easy. Unless the events or courses are free, there is considerable resistance to paying enrollment fees amounting to hundreds of dollars. Or sometimes thousands of dollars in the case of live conferences.
Offer pages have to work hard to communicate the value of these events and courses, and a large amount of traffic has to be generated in order to make sufficient sales.
Here is what we offered, and how we presented our message
You can see the current version of our offer page here.
NOTE: What we did NOT do is create a large orange starburst at the top of the page announcing the $100 savings. Our purpose was not to secure enrollees through hype and pressure. We wanted and still want people to enroll because they see the value in the course itself.
As a marketer we see our responsibility as being to provide a quality service and present the benefits of the course clearly and honestly. The discount is there to capture those people who wanted to enroll, but hadn't quite got around to it. It was not there to make money from people who didn't really want to take the course at all.
In addition, the early-enrollment offer was an essential tool in helping us manage the course. By giving people an incentive to register early, we were able to better anticipate the total number of people likely to be on the course. This enabled us to plan ahead and allocate the necessary resources.
Here is what happened:
What you need to understand: Sales increased by an average of 992.68% during the three days before the deadline.
KEY POINT: Sales jumped significantly on the day we sent out the email, announcing that the early-enrollment offer was about to expire. The next large increase in sales took place during the final few days before the course itself began.
One thing we didn't track or test was the number of people who came to the page, read the contents, left and then returned at a later date to enroll.
With purchase such as this, where people will likely want to speak with their manager or employer about taking the course, there are likely to be a significant number of people who come to the page two, three or more times before making a decision.
In future we will research this issue and not only determine how many people enrolled after several visits, but also test ways to maximize their conversion.
Section 3 – How to increase sales with implied urgency.
There are many different ways in which to communicate urgency.
Usually marketers use deadlines or claims of limited supplies.
However, you can also achieve considerable success simply by implying urgency.
Here are two case histories that illustrate this point well.
Case History #1: How a computer parts etailer used "date stamps".
We recently interviewed an executive from one of the low-cost leaders in the computer parts industry. With sales of tens of millions of dollars a year, and slim margins, he was always on the lookout for ways to increase sales.
Here is what he told us about how they increased sales with implied urgency.
"We were looking for ways to drive more sales by using our email list more aggressively. One idea we had was to create a page each week that showed the best prices on the ten most popular computer parts and gadgets. We were completely open and honest about it. Our own company was the lowest-cost source of most, if not all of those ten products. However, if some other retailer offered a better price on one or two of the items, we included them on the list.
Then we sent a weekly email to our list and named it "The Lowest Price Survey". We listed the prices and provided links to the site.
The real key to the success of this program was that we date-stamped the list. That is to say, we said something like, "As at 6:04AM this morning, theses are the best prices for these products on the web."
The date stamp wasn't a deadline, but it did imply that these prices might not last. This approach might not work well for every retail business, but in a business where consumers are cost-conscious and aware that prices can change day to day, it worked extremely well.
In fact, during the 48 hours after we sent each of these weekly emails we would see a spike in sales of approximately 10%."
Case History #2: How we increased conversions with a "soft" mention of limited supplies.
For one of our research partners, National Alert Registry, we created and produced a video which showed how vulnerable children are to sexual predators, and also provided guidelines on how to educate children and their parents to be more vigilant.
The video was offered, in DVD format, to NAR subscribers. There was no charge for the DVD, but we did ask people to pay the handling and shipping charges.
We produced 5,000 copies but made no mention of this figure when we first made the offer to the NAR list.
We then wrote a second email, with an accompanying landing page, and did mention that we had 5,000 copies to distribute.
You can see the Safe From Harm landing page here.
We stated that there were only 5,000 copies available, and suggested that people get their copy before they were all gone. So we deliberately generated a sense of urgency.
However, we chose not to add hype to the message by showing a counter with a steadily falling number of remaining DVDs. Nor did we state that once these 5,000 were gone they would never be available again. We didn't say it, because it's not true. If more than 5,000 people want a copy, we'll find a way to produce some more.
This approach falls somewhere in between "urgency" and "implied urgency".
Here are the results:
What You Need To UNDERSTAND: When we mentioned that there were 5,000 DVDs available, conversion rates rose by 508%.(*1)
Section 4 – Eight ways to use direct or implied urgency in your marketing
1. Test urgency messages to your offer pages on your web site.
2. Test urgency within your shopping cart pages and other site pages where you need to encourage immediate action.
3. Test urgency messages in the subject lines of your emails and newsletters.
4. Test urgency in your customer or subscriber welcome emails. Urgency can encourage new members to become more deeply engaged in your site more quickly.
5. Test urgency in shopping cart recovery emails to drive more purchasers back to their shopping carts.
6. Test urgency in subscriber recovery emails when subscriptions expire.
7. Test urgency in your press releases and other offline marketing.
8. Test urgency in your PPC and CPM advertising.
And keep in mind that implied urgency can work as hard for you as direct urgency.
(1)This was a cluster test in which a number of variables were changed. So we cannot attribute the entire increase in conversion to the addition of the "5,000 message" alone. Further testing is planned.
RELATED MEC REPORTS:
As part of our research, we have prepared a review of the best Internet resources on this topic.
These sites were rated for usefulness and clarity, but alas, the rating is purely subjective.
* = Decent | ** = Good | *** = Excellent | **** = Indispensable
Editor — Flint McGlaughlin
Writers — Nick Usborne
Contributors — Jimmy Ellis
HTML Designer — Cliff Rainer