…for finding a flat:
Last month while making a handful of improvements to nzflatmates I thought I’d play around with the prices we charge for GOLD Membership in an attempt to increase our revenues. I learned a valuable (literally) lesson which I thought I’d share.
nzflatmates makes over 90% of its revenue from our members upgrading to GOLD Membership, a highly effective upgrade that dramatically increases the usefulness of the site for flat hunters. Three subscription periods are available: one week, one month and one year.
For as long as I care to remember the prices to upgrade have been $9.95 for a week, $19.95 for a month and $49.95 for a year. There was no real science behind it and I just ran with what felt about right at the time.
Anyway, it occurred to me that our $9.95/week option was eating up our $19.95/month option because it was priced too cheap. If a member upgraded for a week at $9.95 and was unsuccessful finding a flat, he or she could simply upgrade for another week at $9.95 and be no worse off. Given that most people (I should really do some proper analysis) can find a flat within a week or two, at $9.95 it’s worth the risk.
The solution? Bump the price up from $9.95/week to $14.95/week…leave the $19.95/month option unchanged. All of a sudden the $14.95/week option makes the $19.95/month option appear like great value (which it is) and serves the primary purpose of pushing members up to a one month subscription period.
The result? Before we made this change 65% of members opted for the one week upgrade and 30% opted for the one month upgrade. Since we’ve made the change, members opting for the one week upgrade has dropped to just 25% and members opting for the one month upgrade has risen to 70%. Despite the small increase in price of our cheapest subscription period (one week) there hasn’t been significant drop in the total number of people upgrading (I’m not smart enough to work this out properly…taking into consideration natural growth, seasonal effects etc), but most importantly revenue has increased by ~45%. It’s also worth noting that this is another one of those changes where the effort/reward ratio is massive. It took seconds (OK, maybe minutes) to change the prices and it would take days/weeks/months to redesign the site, increase listings or make one of any other possible changes that stood a change of achieving a similar result.
Sadly, maths was never my strong point and I’ve learned this valuable lesson the hard way, leaving quite a lot of money on the table in the process – ouch. If you’re in a similar line of business to me, maybe it’s time to take a look at your own prices and avoid making the same mistake!
Last month I felt motivated to A/B test a key conversion point on nzflatmates in an attempt to introduce some science into how we go about designing pages. This was our first attempt at an A/B test so I thought I’d share what we learned…
For those who don’t know, an A/B test (on the web at least) is when you serve two different versions of the same page to find out which one performs better at achieving the goal of the page. i.e. 50% of your users get page A and the other 50% get page B.
In the case of nzflatmates the key conversion page on the site is the “upgrade to GOLD Membership” page where members are invited to upgrade their free membership to a GOLD Membership for a small fee. This is how nzflatmates generates over 90% of its revenue. How well this page performs can be measured by how many people upgrade to GOLD.
Page A
Page B
We served the two different versions of the page by serving page A to members with an even number Member Number and page B to members with an odd number Member Number. The result? Page B is generating 11% more upgrades than page A. Switching every member over to page B will add a few extra dollars to the site’s bottom line each year, for really not a lot of effort.
So if you’re in the business of building or running web sites I strongly recommend giving A/B testing a go! It can be used to test all sorts of pages…sign up pages, upgrade pages, product pages with “add to cart”, checkouts etc etc. Basically any page where you have a clear action that you want the user to perform.
There was a great post earlier this week on Signal vs. Noise about how not to apply for a job.
It’s got me thinking about the importance of attention to detail and using terminology correctly and consistently throughout your web site.
To use some examples from Zillion, an “auction” is how you sell an “item” and an “item” is what you actually sell. You can therefore “win an auction” but you eventually “pay for an item”.
Sellers are not “listers” and pictures are not “photos”. A Member Name (not “member name” or “username”) is how you’re identified on the site and what you use to sign in (not “login”).
Zillion is not “zillion” and happysheep is not “Happysheep”. nzflatmates is certainly not “NZ Flatmates”.
In my opinion, getting this wrong is right up there with misspelling someone’s name, so as a team we try our very best to remember to get it right.
My Dad used to always say to me “good manners costs you nothing” and this is no different. Attention to detail costs you nothing either. Microsoft would never refer to themselves as “Micro soft” just as eBay wouldn’t refer to themselves as “Ebay”.
Just because you’re small, why treat yourself and your brand with any less respect?
And before you ask, yes I’m a bit weird and at times I can be very difficult to work with…but I’m lucky that I’m by no means the only person in the team who shares these values!
A little over a week ago I was interviewed by StartUP and asked questions about Zillion, happysheep, nzflatmates and what it’s like starting a web site in New Zealand.
Having now seen the video and the huge bags under my eyes, I can confidently say I need more sleep!
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