Unlock Your P&L's Growth with Experimentation

When we think about CRO and Experimentation, our minds immediately jump to the website. Buttons, copy, designs...

But there's an entire world of opportunity beyond UX that we're completely overlooking.

And the best place to find these untapped opportunities?

Your P&L statement.

The Problem With Today's Experimentation

Most Experimentation and CRO teams are obsessed with improving user experience.

And for good reason – better UX, more compelling social proof, and a clear value proposition are fundamental to growth.

But here's the problem:

Often the real bottleneck isn't on your website, but off of it.

For example:

• A payment processor charging 3.5% when alternatives offer 2.8%
• COGS eating up 45% of your price when competitors operate at 35%
• A return rate of 25% when the industry benchmark is 15%

Some of these changes should be implemented immediately. There's no space to test better terms with your suppliers.

But for changes that carry risk – like raising prices or switching payment processors – there's the perfect tool to minimize that risk...

Experimentation.

Putting Experimentation to Work for Your P&L

Variable Costs

Variable costs increase proportionally with sales. And while it might seem there's no room for experimentation here, the reality is quite different.

Payment Processors

Is your commission rate too high? Experiment with alternatives:

• Add more inexpensive payment methods
• Try removing expensive options like Afterpay (which can charge 4-6%)
• Experiment with different prices for different payment methods

You might be asking, why test this?

An experiment run by Speero showed that a new payment processor with lower fees decreased conversion rates by 3.86% in Transactions with 99% statistical significance.

Yes, there's always risk involved. That's why it's so important to test things.

High COGS

Cost of Goods Sold is one of the biggest expenses in eCommerce. Here there are some options to improve it:

• Test different price points
• Reduce product quantity while maintaining price
• Experiment with fewer discounts for new customers
• Test cashback instead of direct discounts

HexClad, the cookware brand, conducted a very interesting experiment that their CEO shared on the OPERATORS podcast: they reduced their premium set from 13 to 12 pieces without changing the price.
The result was surprising: conversion remained stable while costs were reduced and gross margin increased.

Returns

A high return rate doesn't just impact margins – it affects customer experience. You can:

• Test offering 110% store credit versus 100% cash refunds
• Create flows that encourage exchanges over returns
• Experiment with different sizing guides: videos, comparison tools, and size quizzes
• Test different copy in your return policy to find the balance that minimizes returns without hurting conversion

Tradinn, for example, managed to decrease returns due to incorrect sizes by 28%, which can mean hundreds of thousands of euros for a business.

Shipping Costs

Shipping can eat a significant portion of your margin. Some ideas:

• Test different free shipping thresholds in $5-10 increments
• Experiment with how shipping costs are presented throughout the buyer journey
• If you offer local pickup, try different incentives to drive adoption

True Classic, for example, experiments with various free shipping thresholds and adds gifts to continue increasing the average order value and diluting shipping costs.

Marketing

Marketing costs are among the largest in eCommerce. You can:

• Test different post-purchase sequences designed to improve 60-day LTV
• Run incrementality tests to determine the true value of each marketing channel

Jones Road Beauty doubled their new customer orders after increasing YouTube ad spend, proving platform reporting was understating performance by showing ads drove 1.82X more orders than tracked via click attribution.

The test demonstrated that doubling YouTube spend resulted in 2.26X more new customer orders, giving them confidence to increase spend efficiently on the platform.

Fixed Costs

Although fixed costs don't increase proportionally with sales, there's still room for experimentation.

Customer Service

• Test AI agents versus human support for different ticket types
• Experiment with enhanced FAQs and self-service options
• Try changes to unboxing experience to decrease support inquiries

Organic Basics implemented DigitalGenius - an AI customer support platform - to automate customer service and within four months achieved 41% ticket automation with a 69% full resolution rate, particularly for order change requests that are now automatically fulfilled.

Marketing Teams

• Test AI tools versus traditional methods for creative production
• Compare AI-generated product images versus traditional photography for certain uses
• Experiment with different team structures: specialists versus generalists

Icon.me is revolutionizing the advertising space by optimizing the marketing team's processes, from ad creation to audience research.

Office Space

• Test productivity across remote, hybrid, and in-office work models
• Measure employee satisfaction and retention rates for different approaches
• Experiment with office configurations to optimize your real estate costs

A study by Stanford University involving 16,000 workers over 9 months found that working from home increased productivity by 13%. This increase was attributed to a quieter work environment, more convenient working conditions, and fewer breaks and sick days

A New Horizon for CRO & Experimentation

The possibilities are endless. It all comes down to a simple process:

1. Analyze your P&L with the finance team to identify the largest cost categories
2. Prioritize opportunities using a framework like ICE (Impact, Confidence, Ease)
3. Design controlled experiments that produce reliable results
4. Implement only what works

Experimentation gives us the perfect framework to make informed, data-driven decisions, not intuition-based ones. It reduces risk while potentially unlocking massive improvements to your unit economics.

And while improving UX will always be important, it's time to expand our horizons and use experimentation to tackle the real bottlenecks in your business. Button colors might move conversion by 2%, but optimizing your COGS percentage by increasing prices can unlock new frontiers of growth.

Experimentation and CRO shines when it's holistic and embraces the financial aspect of the business too.

Your P&L is waiting. When will you start?