PERFORMANCE INSIGHTS: How Vinomofo answered a fundamental business question with a simple data trick

Vinomofo’s Justin Dry.

When Aussie wine startup Vinomofo first launched their website in 2013, they faced a dilemma – should their website be open or force users to register?

It’s a question that a lot of e-commerce businesses face. Having your site open means anyone can come and look. It maximises exposure to what you have to sell. But it also means the average browser has little loyalty. They haven’t given you any of their details.

On the other hand, putting even a small barrier in the way, like a sign-up page, means you can collect some details. And it creates some level of commitment and therefore, sales.

That’s the theory at least. But Vinomofo co-founders Justin Dry and Andre Eikmeier weren’t sure. So they decided to put it to the test.

“We did really lean towards making it a private members club because we thought that feeling of community was really powerful,” says co-founder Justin Dry.

“It was a huge decision in the early days because it will shape the way we do business. This was what we were going out to the world with. This is the opportunity to make some noise.”

So Vinomofo set up a split test — half of the users were directed towards an open site, and the other half were directed towards a member’s only site with a sign up page.

The test was unambiguous. For every one person who bought something on the open site, six people became members on the closed site. And those six members were much better customers in the long run.

“Of those six people that became members, four of them would end up becoming customers. So the results are actually 4 to 1 as far as customers,” says Dry.

“Those that had to go through the blocker and become members ultimately, over their lifetime, bought more wine.”

The Vinomofo story

How Vinomofo used data to solve a fundamental problem

Should Vinomofo be open or closed?

It worked

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.