Bootstrapping From Germany: Cleverbridge CEO Christian Blume (Part 3)

Christian Blume: What it allowed us to do was put different checkout processes. We didn’t care whether this was checkout processes built on our engine or something that we would compare against—somebody that was running on an in-house solution or an outsourced solution. We really compare how the conversion rates really evolve with the implementation of those different checkout processes. The good part about this was that our engine’s flexibility allowed us to generate much higher conversion rates. Most of the time, we came in there and we were able to bump up the bottom line revenue by, sometimes, up to 20%, which is huge.

Sramana Mitra: 20% bump-up in revenue is huge. If you don’t mind, I’m going to dig deeper. Let’s do a use case. Were you going after large e-commerce sites? What kind of sites were you going after?

Christian Blume: Our target market was never the small shareware publishers who were selling a couple of licenses on a monthly basis. We were going after those organizations who would be selling 100,000 licenses on a daily or weekly basis. It was experienced e-commerce companies.

Sramana Mitra: Was the part of the segmentation experienced e-commerce companies that were selling digital goods?

Christian Blume: Yes.

Sramana Mitra: It sounds like you were drawing into that specific segment.

Christian Blume: Right off that bat, we said, “We want to focus on a very specific target market, which is software distribution.” We never looked at doing any type of physical distribution. We weren’t looking at distributing CDs or food. This was also where we had expertise because all of the team that started the company originated from Element Five or Digital River.

Sramana Mitra: Now we have the segmentation. Can you give us a use case to show how you were achieving 20% lift? That’s very significant.

Christian Blume: I’ll give you an example of what had happened with one of the prospects. This prospect at that time was running separate parts on their e-commerce site. They were focusing on the non-German speaking part. That was something that they outsourced. Then they have the German-speaking part because they were a German company. They’re a very successful company. They have double-digit million dollar revenue on an annual basis. They said, “We’ve been trying to work with an outsourced solution in the German-speaking market.” In the German-speaking market, they required a completely different checkout process. We looked at them and said, “Are you sure?” They said, “Yes.”

This is the piece where most of the people that I tell the story to are thinking, “Are you serious?” They said that in Germany, the most successful checkout process was something where they offered a five-page checkout flow. You would be entering your personal information on the first page. On the second page, you would be entering your email address. On the third page, you would be choosing the payment method and so on. I don’t have the exact steps at the top of my mind. They were actually generating, compared to the outsourced solution, around about 5% more in revenue. That told them that they needed to do this by themselves.

We said, “You’re really lucky because we can facilitate for different geo-locations to display different types of checkout processes. We can configure them in exactly the same way that you would like to see it.” What we did was set up the auto process for the rest of the world compared to the German-speaking part. We put a five-page checkout process in place for them. We actually beat the conversion rate that they were achieving both on the international site as well as on the German-speaking site.

The German-speaking site was very sophisticated already. We had a couple of tweaks because our engine was very quick. There was a lot of traffic that could be pushed to it. The loading plans of the webpages were much quicker than what they actually had at that time. With regards to the rest of the world, this is where we actually achieved 10% lift with this company. This is where you have to go into very specific details around how a checkout process is actually being set up. For example, for a state in the US, you have a zip code that you are displaying. You have to have a certain ranking as to how you’re actually showing this within the checkout process.

The other thing that you wouldn’t be showing as a European-based company would be a VAP seal to somebody that is buying from within the US because they don’t understand VAP and it would be a distraction. It is something where an end consumer would be saying, “I’m a US customer. Why should I be paying VAP here?” This is where we were able to structure it in a way by saying, “If a customer is coming in from a US IP, we would actually display something that would not require the VAP to be displayed. On the other hand, if somebody was coming in from a European country, this was obviously the case where we have to display VAP.” It starts with simple things like this where it causes less of a distraction for the consumer to actually go along and get to the Buy button.

Then, continue on with the different payment methods. At that time, there were a lot of competitors. They would show all of the payment methods that they had available worldwide. We cut down the payment methods only to those relevant payment methods for that specific region where the end consumer originates. These are the pieces that we put together. These are some of the top-level changes that we have made to the solution at that time, which gave us that uplift that we needed in order to prove to our clients that we would actually be the highest-converting e-commerce solution for them.

This segment is part 3 in the series : Bootstrapping From Germany: Cleverbridge CEO Christian Blume
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