The online ramblings of Dylan Bland

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.

I found a cool page on Stuff tonight that lets you view graphs from each of the five major polls following the 2008 General Election.

Check it out here

People who don’t know me very well and see me only as a business-owner are often surprised to learn that I’m voting Labour.

Why? Because there are more important things in my life than how much tax I pay.

Independent foreign policy that carefully considers the justification for war is more important to me than how much tax I pay. A comprehensive social welfare system that recognises that some members of our society give back in ways other than holding down a steady job is more important to me than how much tax I pay. Acknowledging that same-sex couples deserve the same right as opposite-sex couples to happiness and family is more important to me than how much tax I pay. Protecting the rights of children and promoting a less violent society is more important to me than how much tax I pay.

I’m sure most people would agree that there’s so much more to life than business, money and taxes. My hope come election day is that we each cast our vote for the party we believe offers not only the greatest benefits to ourselves personally, but the greatest benefits to all New Zealanders across all aspects of our individual lives.

Every single time I visit Wellington I come away impressed, and this weekend was no different. It’s hard to put my finger on exactly what it is, but here goes…

• The people are friendlier. They really are and this is huge to me.
• The atmosphere is more laid back. People care less about what they wear etc and appear more free to express themselves.
• You can walk everywhere. The tight layout of the city creates a pedestrian culture that encourages people out of their cars and forces people to engage with each other.
• Important decisions are made here. Seeing the Beehive and MPs walking around is just hot.
• Internet people live here. Web people living in Wellington have made a real effort to support each other. Trade Me, Xero, Plan HQ, StarNow, Ponoko etc are all based in Wellington and seem to know each other. In Auckland we get Ferrit (yay!)

I’m sure all of this has been said a thousand times before but it’s really struck me how true it is. Wellington has a buzz about it that, colleagues, friends and family aside, makes it feel like a better place to live than Auckland.

Born in the wrong city!

I was amazed to learn the other day that the nzherald developed their iPhone-compatible site in a single weekend. The team responsible went from sketching some designs on Friday to coding it up on Saturday and Sunday.

To be honest this isn’t something I expected to hear about a publicly listed company like APN. What’s more, the site’s really well thought out too and has totally changed the way I consume my local news (now brought forward 10 minutes to while waiting for my morning coffee at the local cafe as oppose to in front of my desk with the coffee in hand!).

This is a great example of how a small amount of work targeted in the right area can have a really big impact.

Nice job guys.

Update: The clever people behind this project are Nigel Horricks (the one and only!) and Justin Matthews. I’ve met Nigel and he’s one of the lucky ones who really gets the Internet. Inspired choice APN…

Last week I posted about the launch of my friend Simon’s online shopping site Mighty Ape.

One of the key reason my money’s on Mighty Ape going all the way in New Zealand is their same-day shipping service, a carryover from GP Store.

Take for example Richard Branson’s new book Business Stripped Bare. The book was released in New Zealand only yesterday – it looked good so I ordered it…

… and today it arrived. That’s the benefit of holding stock and it sure beats the experience of waiting 2-3 weeks for shipping from overseas or battling the inner-city car parks. Go The Ape!

PS: iPhone cameras suck!

BNZ’s old brand.

BNZ’s new brand.

Fail.

My good friend and Zillion business partner Simon Barton finally took the covers off his new shopping site today with the launch of Mighty Ape.

Simon, Matt and the rest of the team at GP Store have been working hard on Mighty Ape for a very long time and I really rate them to go all the way and deliver New Zealand a truly world class shopping web site. The site’s great, they have a warehouse packed full (really full) of stock and a solid team of guys and girls packing and shipping orders quickly (like GP Store, Mighty Ape offers same day shipping of in stock items).

Well done guys. Seriously well done.

Check out Mighty Ape