Effect of order form length on AR and EPC in the context of capital management and affiliate portfolio

9 December 2020

12 min read

As we mentioned at the end of Part 1 of this case study, we ordered an A/B test of the order form consisting of the ABSOLUTELY NECESSARY INFORMATION to carry transaction and our company standard order form.

Below we present the test hypothesis, test setup, and analysis of how super short (60% shorter than our company standard) affects the PROFITABILITY OF OPERATIONS on both our side and the affiliate’s side.

As GEO, we chose Switzerland to keep the test representative as before.

Let’s start with the test hypothesis. On the affiliate market, on industry forums, there are many guides/lists of conditions that an ideal form should meet. Short story long – THE SHORTER THE BETTER.

Buying: the decision-making process

But before we start our argument, let’s take a look at what goes on in the customer’s mind before he reaches the order form. Without going into the details of behavioral psychology, THE CONSUMER’S MIND OPERATES ON TWO MAIN MODES:

  1. Logical Mode
  2. Emotional Mode
  3. LOGICAL THINKING
  4. Emotional Vs. Logic

Now let’s take a look at the DIRECT MARKETING BANNERS used in our A/B test which is the start of a trade:

How do you bet on what fashion is the brain of the client who clicks on such a banner? The answer is obvious: he/she uses the right – EMOTIONAL AND IMPULSIVE hemisphere of the brain.

Brain Lateralization

Let’s look at the next part of the funnel – the PRELANDER:

At first glance, you can see that we are dealing with SENSATIONAL NEWS (graphics imitating the news site). When you read the copy, you will find out that a new, groundbreaking method has been discovered, thanks to which you can get rid of the problem that is tormenting you in AN INNOVATIVE, CHEAP, AND IMMEDIATE WAY.

Hope appears in the mind of the prospect, which we know is an EMOTION and has nothing to do with logic. This preheated prospect goes to the LANDING PAGE below.

Although you can see the smiling face of a professional above the fold, don’t let that fool you. The copy is emotional and “heats” the prospect to an EVEN HIGHER TEMPERATURE. Then the “hot”, excited prospect with emotional clashes with the ORDER FORM.

As you can see in the table below, CR DROPS DRASTICALLY with a longer form. It can be said that more fields on the checkout form cool down the customer’s purchasing intent.

If you are a fan of short order forms, hold off opening the champagne – we don’t have their money yet… and ANSWER ONE SHORT QUESTION NOW:

WHAT’S MORE IMPORTANT IN THE AFFILIATE BUSINESS: CR INDEX OR YOUR BANK ACCOUNT STATUS?

Business is a numbers game

To see what happens next, we need to look under the hood of the affiliate platform and see what happens from COMPLETING THE ORDER FORM to the moment of PAYING OUT THE PAYOUT.

The lead you have generated goes to the Lead Bank in the CALL CENTER. The success of the campaign in the Call Center (and ultimately your payout) relates to the:

Quality of leads

Quantity of leads

The key factor influencing the amount of payout is the ratio of leads you generated to sales (often called conversion percentage or APPROVE RATE).

Unqualified leads

At the first stage, Call Center weeds out UNQUALIFIED LEADS which are:

Fake, BOT generated

Made for a joke

The customer’s phone does not respond

The more quickly a lead is acted upon, the higher the likelihood of conversion. Practice shows that interest is highest when a prospect first responds to an offer. THE LONGER A LEAD SITS, THE COLDER THE PROSPECT BECOMES…

All leads you generated are CONFIRMED WITHIN 24 HOURS to prevent them from cooling down. Remember that all orders are confirmed by phone up to 20 calls per order by the call center, so the chances that the lead you generated will be wasted is PRACTICALLY ZERO.

As you can see in the table below, a short order form generates significantly more unqualified leads than a longer one. YOUR AR GOES DOWN, AND SO DOES YOUR PAYOUT RATE.

Qualified leads

There are 2 types of QUALIFIED LEADS that a lead-gen campaign can produce. They are commonly referred to as:

“HARD” leads – high quality, with a strong purchasing intention and high closing potential

“SOFT” leads – of low quality, with a weak purchasing intention and low closing potential

The reasons for the occurrence of “SOFT” leads are:

The customer has changed his mind and withdraws from the purchase

The customer claims he has no money

The customer does not remember or denies placing the order

In my opinion in all these cases prospect probably made his decision under the INFLUENCE OF STRONG EMOTIONS AND COOLED DOWN.

As you can see from the table above, during the test, the short purchase form generated much more soft leads than the long ones. It turns out that the effort put into filling in a longer form acts as a PURCHASE INTENTION FILTER.

Put simply, customers who fill out a long-form and provide their address take their purchase seriously, as opposed to those who only leave contact details.

Once again, despite the higher CR, THE USE OF A SHORTER FORM reduces the AR, and thus the payout.

In Conclusion (part 2)

As I mentioned earlier BUSINESS IS A NUMBER GAME. The marketing effort that pulls the most responses (high CR) isn’t always the most successful, for its conversion to sales that is the true measure of success. THE FINAL COMPARISON of the two efforts in the table below illustrates the point.

As you can see, effort B (short form) would seemingly be more successful if CR were the sole measure. But when CONVERSION TO SALES OR AR is factored in the greatest number of sales actually came from effort A (long form). This is the MORE SUCCESSFUL MARKETING TACTIC.

Funnel A (long form), although it generated fewer leads, gave a 25% HIGHER EPC, and thus your total income also increased by 25%, which contradicts the popular opinion that short order form is more profitable.

Warning

Finally, to be fair, I WANT TO REPEAT THIS: yes, there are affiliate platforms that have a higher payout, often advertised as guaranteed. You should pay special attention to such offers for 2 reasons:

Sometimes these are opportunities to earn good money

Sometimes these are opportunities to lose all capital involved in the campaign and all earned payout

A SIMPLE EXAMPLE: a chain of hypermarkets (intermediaries), thanks to its bargaining power, can demand favorable conditions on a small vegetable supplier and lead him to bankruptcy. We have all heard of such commercial practices.

A SIMILAR SCAM is also practiced by not very honest affiliate platforms:

they force new, inexperienced creators of offers to offer favorable conditions in exchange for admission to the platform

they advertise widely as offering the largest payouts (often too good to be true)

When the creator of the offer inadvertently agreed to the unfavorable conditions for himself, he ceases to be solvent, goes bankrupt – your investments in the campaign and payouts evaporate. Dishonest platform as an intermediary washes his hands. NOBODY IS TO BLAME.

What’s the solution?

I strongly advise you to construct a BALANCED portfolio of offers. According to the Pareto principle 70% of your working capital/traffic/campaigns principle, should be involved in a solid money-making machine like ours. The remaining 30% of marketing efforts and funds can be devoted to HIGH-RISK VENTURES.

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