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A/B testing is a way to compare two versions of something to figure out which performs better. It’s most often associated with websites and apps – but it can also be used to perfect your retail finance offering.
For example, you might choose to offer interest free finance to customers, with terms from 3-24 months available. But how will you know which is the most popular term length – and whether its also the most profitable?
Swapping out your promoted offers and analysing how they perform against your revenue goals is a great way to make use of A/B testing. But the success of these tests hinges on having a finance provider capable of delivering the necessary insights and data.
Here’s an example of how forward-thinking merchants are using A/B testing and data analytics to boost sales.
1. Use data to boost revenue
Swyft, a modular sofa brand with a reputation for quality design, adopted retail finance to help customers manage their purchases more flexibly. But as a retailer with high-ticket items, the brand needed a solution that would both improve accessibility for customers and contribute to business growth.
Swyft was offering Zopa’s finance solution, DivideBuy at checkout. Initially, the options available were 3-12 months interest free finance, but once DivideBuy launched its regulated finance products, the retailer was one of the first to trial the new offers.
The business decided to test multiple financing options (including both interest-free and interest-bearing options) over various terms. Doing this meant it could narrow down the optimal financing structures that aligned with customer preferences – and, ultimately, boost sales.
By asking for granular insights from its finance provider, Swyft could track changes in customer behaviour and quantify the impact of each finance offer. This lead to a year-on-year (YoY) revenue increase of 65% within the first month of trialling the new, longer-term offers.
2. Boost approval rates and conversions
Merchants offering financing face the challenge of balancing accessibility with profitability, particularly when it comes to high-ticket purchases.
To effectively run A/B tests on financing products, approval rates need to be high enough to deliver a well-rounded picture. DivideBuy’s credit engine delivered strong approval rates for Swyft, alongside a two-minute seamless credit journey. This allowed Swyft to maintain accessibility and high conversion rates, critical metrics in any A/B testing scenario focused on customer adoption.
Through A/B testing, Swyft discovered that DivideBuy’s longer-term regulated, interest free offers were converting at even higher rates than unregulated short-term options. This meant the brand could focus its marketing efforts on promoting its most popular finance offers to boost sales.
3. In-depth insights and real-time reporting for growth
Commercial rates are often one of the first things a merchant will look at in a finance provider. But don’t underestimate the power of choosing a partner who can get you the data you need to really make the most of your retail finance solution.
DivideBuy’s account management team provided Swyft with detailed reports, giving the business a clear view of incrementality and profitability across different finance offerings. For Swyft, this level of reporting enabled a quick and accurate evaluation of which financing options yielded the best returns.
4. Why A/B testing with the right retail finance provider matters
Implementing A/B testing in retail finance isn’t merely about offering different finance options; it’s about consistently optimizing to find what works best for both the business and its customers. Without a provider who can supply the insights needed to analyse customer behaviour and revenue impact, merchants miss out on opportunities to refine their approach and maximize growth.
For Swyft, DivideBuy’s capacity to support high-ticket lending, combined with their robust reporting, allowed them to use A/B testing effectively. The brand identified that longer-term interest-free options were most successful at increasing customer adoption and revenue.
The value of working with a data-centric finance provider is clear: only with the right insights can retailers understand the efficacy of their A/B tests and make informed adjustments that align with business goals.
Conclusion
If you’re a merchant in the retail finance space, A/B testing can be an excellent way to optimise revenue and enhance customer satisfaction. But to make this strategy truly effective, it’s essential to choose a finance provider capable of delivering high-quality data, detailed insights, and robust reporting.
By partnering with a provider like DivideBuy, you can leverage A/B testing to identify your most successful finance options, achieving sustained growth and a superior customer experience.
Find out more by getting in touch with our expert team today.
