Background

Branch Furniture is a NYC-based furniture brand that runs on Shopify Plus. Founded in 2019 to provide office furniture at a reasonable price point, the team had to execute a full pivot when COVID hit - their B2B model of selling to offices would no longer work, so they shifted to a DTC model. In the last 4 years, they’ve had tremendous growth and offer the best value ergonomic chairs and standing desks on the market today.

With products ranging from $250 - $800, customers often take a bit of time to consider their purchase and shop around. For the last several years, Branch has used an Abandoned Cart flow in Klaviyo to nudge these shoppers over the line to purchase. The flow offers a discount to customers who started a checkout but did not order, sending them an email after a day of inactivity.

Challenge

The team at Branch has always wondered what the best offer is for their abandoned cart emails.

It’s a difficult question to answer because there are a lot of competing considerations. For example:

• A higher discount may increase the conversion rate and total revenue, but did that extra discount cut too much into contribution margins?

• Would a % off or a $ off offer be more appealing to customers?

• If it’s a % off offer, how do we prevent this from being used on massive orders to limit financial exposure? (e.g., 10% off a $8,000 cart is pretty painful)

• How do we know if these discounts are generating true incremental purchases vs. pulling forward purchases that would have happened anyway?

They had recently built out a tiered flow in Klaviyo. For carts under $200, they would offer no discount; for carts between $200 - $500, they would offer $10 off; and for carts over $500 they would offer $20 off. This system was good at limiting exposure to very high discounts, but the team was worried that it wasn’t appealing enough to get customers to convert. They wanted to AB test some different options but didn’t know how they would track all of the data.

Key Goals

• Maximize contribution margin in their Abandoned Cart flow

• Run a full AB test on their flow and offers to measure the impact

• Prevent coupon code leakage by avoiding the use of broad discount codes

• Increase conversion rate on the offer by providing a seamless on-site experience for customers who receive the offer

• Limit downside by capping the amount that a discount could be

Solution

With Intelligems Personalizations, the team at Branch was able to split test their abandoned cart discount offers.

They set up an A/B test where they experimented with different discount offers, and tracked the resulting impact on conversion rate, revenue, and profitability.Here’s how they went about it:

1. Designing the test & the offers in Intelligems

First, the team had to decide on what discounts they wanted to test. They settled on trying a blanket 5% and a 10% discount. The hypothesis was that the % off deals would be more attractive to customers. Traffic was to be split evenly across the groups.

There was one issue - a % off deal could get very expensive on larger carts. E.g, that 10% off could be worth $200 if someone was ordering 7 chairs. Shopify doesn’t have the ability to “cap” the discount amount, but with Intelligems’ customization abilities, Branch was able to set up these offers so that they had a maximum discount amount of $100** - protecting their downside.

2. Setting up the on-site experience for customers who get the offer

Intelligems Personalizations gives teams the ability to “unlock” certain on-site experiences when they access an offer, leading to higher conversion rates.

The team at Branch used this tool to set up 2 personalizations for customers who received the abandoned cart offer:

3. Generating a link for the offer - no more coupon codes!

In the Intelligems Personalizations dashboard, the team was able to generate a link that “unlocked” the offer for targeted customers if they click on it. This would go into the email flows - no need to generate coupon codes, or for customers to remember the code that was sent to them in their email.

4. Setting up the Emails in Klaviyo

The Branch & Intelligems teams worked together to set up this test in Klaviyo. While the Branch team updated the creative in the emails to match the new offers, the Intelligems team set up the integration with Klaviyo so that the correct set of emails would be sent to each test group.

Then the Branch team put the Intelligems Personalizations links into each corresponding email and things were good to go!

5. Launching and running the test

After pressing “go” in the Intelligems dashboard, the test started running. As a customer lands on the site, they would be sorted into one of the 3 test groups. If they abandoned a checkout, they would receive the corresponding email flow, which contained the Intelligems Personalizations Link that then unlocked their offer. 

Results

The winning offer boosted profits by 70%!

The Branch team was able to track the test in real time on the Intelligems Analytics Dashboard. They found that by finding the right offer they boosted conversion on abandoned carts by 80%, and profit on abandoned carts by 70% Testing that offer alone resulted in a 105X ROI on their monthly Intelligems plan.