E-Commerce Benchmarking Insightscleverbridge Client Networking Event, Oct. 3, 2012

• Objectives

• Polling and interaction

• Brief KPI discussion

• General statistics

• Insights from data Browsers

Localization

Payments

• Contact to Order (CTO) rates

• Affiliate sales

Introduction

Statistics

• Stable product pricing (2009-2012)• Conversion rates vary widely based on

multiple factors

Product Pricing and Conversion Rates

Top-Selling Products Conversion Rate

High 80.0%

Median 20.4%

Mean 27.4%

Low 0.50%

Sources: Pricing and conversion rate data: aggregate data of top selling products

Company A

Freemium product that randomly launches full-screen pop-up cart page

Company BCollects email address before cart page

Company CUpgrade discount email offer

Other database marketing

Sample Conversion Rate Scenarios

Conversion Rate

<10%

>50%

>70%

<7%

Regional Variations Conversion Rates and Pricing

Country Conversion AOV Per Capita GDP

Software Piracy Rate

Denmark 28.7% 28 € $37.6K 24%

Japan 26.6% 30 € $35.2K 21%

USA 20.6% 35 € $49K 19%

Germany 17.8% 25 € $38.4K 26%

Brazil 6.6% 19 € $11.9K 53%

Greece 3.5% 26 € $26.6K 61%

Russian Fed 3.1% 23 € $17K 63%

China 1.2% 32 € $8.5K 82%

India 0.6% 27 € $3.7K 63%

Sources: Conversion and AOV: sample aggregate data of selected clientsGDP: The World Fact Book (pub by The CIA)Software Piracy: NationMaster.com

Distribution of Orders on Platform

Top Countries RankUSA 1

Germany 2

Japan 3

UK 4

France 5

Australia 6

Canada 7

Netherlands 8

Italy 9

Switzerland 10

Top Languages %English 46.2%German 29.1%French 5.7%Japanese 5.3%Dutch 2.7%Spanish 2.2%Italian 1.8%Portuguese (Brazil) 1.6%Russian 1.0%Swedish 0.9%

Sources: Distribution of orders: aggregate client data

Sample of Top Languages Used

Brazil %Portuguese (Brazil) 75.1%Portuguese 12.5%English 11.7%German 0.3%Spanish 0.2%

Japan %Japanese 97.8%English 1.9%Portuguese (Brazil) 0.1%Spanish 0.1%German 0.1%

Sources: Conversion rate: aggregate client data

Sample of Top Languages Used

Canada %English 82.9%French 16.4%German 0.2%Chinese 0.1%Spanish 0.1%

USA %English 99.5%Spanish 0.3%German 0.1%Chinese 0.0%Japanese 0.0%

Sources: Language and conversion rate: aggregate client data

Internet Browsers

“Orbitz Worldwide Inc. has found that people who use Apple Inc.'s Mac computers spend as much as 30% more a night on hotels, so the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see.”

Distribution of Orders by Browser

Worldwide % AOVMSIE 47% $44.84Firefox 15% $43.86Chrome 15% $42.99Misc 13% $41.55Safari 8% $49.36Opera 1% $32.40

Japan % AOVMSIE 80% $42.60Firefox 3% $54.12Chrome 12% $47.92Misc 3% $54.72Safari 3% $59.62Opera 0% $47.10

Sources: Browser and AOV: sample aggregate client data

The Wall Street Journal, Aug. 23, 2012

Localization

Pre-Launch Post-Launch

Non-KonbiniKonbini

Uplift in Orders from LocalizationExample: Konbini launch in Japan

Sources: Konbini uplift data: sample aggregate client data

+14%

Payments

Payment Type Trends

Percent of Sales

’07 ’08 ‘09 ‘10 ‘11 ‘12 YTD

Last 5-Yrs Growth (% of Sales)

Credit Card 68% 70% 72% 72% 72% 71% 4%Stable since ’11

PayPal 7% 9% 12% 14% 16% 17% 143%Stable since ’11

Wire Transfer

15% 13% 9% 7% 6% 5% -67%

Direct Debit 10% 7% 5% 4% 4% 4% -60%

iDEAL 0% 0% 0% 1% 1% 1%

Check 1% 1% 1% 1% 1% 1%

Sources: Payment type usage: aggregate client data

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PayPal

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Alipay

Konbi

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Wire

Tra

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Web

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Bolet

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Check

0%

10%

20%

30%

40%

50%

60%

70%

80%

6%12% 14%

19%

33%

44%52% 54%

59%

70%

Order non-Completion Rates

Sources: Order non-completion rates: aggregate client data

• Monthly billing creates challenges for customers who use offline payments

• Enhanced recurring billing capabilities: Direct Debit -- already implemented PayPal -- pilot project (Oct’12)

• Consider providing customers incentives to pay for subscriptions quarterly or annually

Evolution to Subscription Creates Conflict with Offline Payments

Example:

Payment Types Used with Monthly Subscriptions - Germany

Payment Type

% of All Orders

% of Mthly Subscr. Orders

Comments

Direct Debit

21% 41% Recurrent billing already in place

PayPal 35% 28% Recurrent billing pilot Oct’12

Credit Card 25% 22% Authorization recycling in Place

Wire Transfer

17% 7%

Sofortüber-weisung.de

2% 3% This provider is working on a subscription billing solution

Sources: Payment type usage: aggregate client data

Payment Types Used with Monthly Subscriptions - USA

Payment Type % of Monthly Subscription Orders

Credit Card 82%

PayPal 18%

Sources: Payment type usage: aggregate client data

Contact to Order Rates

• What is Contact to Order Rate and why does it matter?

Refunds Customer satisfaction Potentially requires work of client

• CTO rates on cleverbridge platform: Highest: 15.5% Median: 8.0% Lowest: 2.6%

Contact to Order Rate (CTO)

Sources: CTO: sample of leading clients

Top 5 Sources Drive 65% of CTO

31%

12%

10%7%

6%

35% (Other)

Refunds

Redelivery/Extend download link

Tech support (referred to client)

Installation issue

Delivery missing

Other

Sources: CTO: sample of leading clients

CTO Rates by Country

USA 8.3%Japan 6.7%Germany 6.6%Canada 6.3%Netherlands 5.7%Italy 5.4%UK 5.1%Switzerland 5.0%France 4.7%Australia 4.1%

Sources: CTO: aggregate client data

Refund Rates by Country

Japan 7.7%USA 4.3%Canada 4.1%Sweden 3.8%UK 3.6%France 2.9%Netherlands 2.4%Australia 2.1%Italy 2.0%Germany 1.5%

Sources: Refund rates: aggregate client data

1. Refund Authorization

68% of clients authorize cleverbridge to decide on refund request

Benefits: • Increases customer satisfaction • Reduces risk of chargebacks • Reduces client’s processing work

Some Best Practices to Reduce CTO

Refund Rates High Median Low

Pre-authorized 5.5% 1.9% 0.6%

Authorization required 5.2% 1.9% 0.2%

Sources: Refund authorization: sample of leading clients

2. License Keys and Download Links• Download links valid for more than 14 days

(perhaps 60 days+)• Integrate license key generator with cleverbridge

platform to reduce the risk of running out of keys or having to send keys via a separate process

Benefits: • Increases customer satisfaction • Reduces CTO

Best Practices to Reduce CTO (continued)

3. Instructions

Effective and localized instructions for order confirmation pages and confirmation emails• Installation• Registration

Benefits: • Increased customer satisfaction• Reduced CTO

Best Practices to Reduce CTO (continued)

Best Practice ExampleAvast Confirmation Page

Extract for confirmation page for Firefox users

Extract for confirmation page for MSIE users

Advertise Money Back Guarantee

20 out of 25 clients now advertise money back guarantees

Potential Benefits:• Higher conversion rates

(commonly mentioned in the industry)• Higher customer satisfaction

For Your Consideration…

Sources: Money Back Guarantee: sample of leading clients

Affiliate SalesLarge potential upside for many B2C clients

Affiliate Sales on the cleverbridge Platform

2010 2011 2012E

• Affiliates drive 17% of total orders and 15% of gross revenues

250% growth in affiliate orders (3 yrs)

Sources: Affiliate sales: aggregate client data

Portion of B2C Gross Sales from Affiliates

Category % of Gross Sales

Utilities 30% to 40%

Anti-Virus and Malware 10% to 25%

Baseline with Affiliate manager 10%

Baseline without Affiliate manager 5% (or less)

Sources: Affiliate data: aggregate client data

Gain from Hiring Affiliate Manager

Sample Scenario

Current gross sales(includes 5% from unmanaged affiliate sales)

$1,000,000 / mo

5% lift in gross sales with Affiliate Manager $50,000 / mo

Cost of Affiliate Manager $6,000 / mo

Incremental gross sales less cost of Affiliate Manager $44,000 / mo

$528,000 / yr

Statistics • Total Affiliates: 26,000 in cleverbridge program• Percent of gross revenues generated by

cleverbridge-managed Affiliates: 80% by the top 2% of Affiliates 85% by Affiliates with multiple clients

Affiliate Program

Sources: Affiliate data: aggregate client data

• Has multiple clients

• Larger and has more resources to draw bigger audiences

• Multiple ways to monetize their traffic (advertising, etc.)

• Continually tests and optimizes conversions and investments across their clients

Profile of Successful Affiliate

Thank you