Part 2: Customers, usability and ebags success as "sexy"

To succeed as that one player, I know the founders worked without pay for eight months. What kept you going?
When we were just starting out no one believed in what we were doing. And when I quit my job at Samsonite, this friend of mine took me out to dinner and he just kept telling me I was crazy.

But we knew so much about our industry and we knew ten or twelve percent of bags are sold through catalogs. So people do buy them without touching them. We based our company around that knowledge and not just on personal tastes. And we base our site around our experience too.

Let's talk about your site. Do you always have special deals going on, freebies and contests?
Yes, we do that to gain membership and to get people to engage in the site. To start taking action on the site. The more you can get them to play with the site, the more they are apt to make a purchase.

What are the usability problems you've encountered in the use of the site and do you rely on member feedback?
We're constantly trying to upgrade our navigation. We've had an increase in the conversion rate of about .1% every single month since we started.

We use Broadbase, and that software will show everything that is being clicked on your site, so we've updated the site by knowing where people are clicking. There's a big yellow area in the front of our site and we know that 67% of the people will start their navigation from that box. So one thing we try to do is focus always to what our customer needs on the site.

We know where people go, and about 80% of the people work within our tags and the little yellow area. We're constantly optimizing that, since we know that's where they are going.

Do you rework the site layout a little at a time, to avoid the user feeling as though the site is constantly changing?
We do it subtly and only one change at a time. When we change the layout on the site, what we do is change it so half the new visitors see the new site and half see the old site. Then we see which one gets the better conversion rate and we switch to whichever site layout gets the best response. And that's how we've been able to get such great conversion rates.

What are the things you're planning for the next six to twelve months to stay on the path of success?
We have four groups of teams who each have very important jobs to accomplish.

One team just looks at increasing the level of traffic. For instance, we get 1 million unique visitors a week, more than the Gap or Victoria's Secret, so our first team's whole focus is to make sure our traffic level is consistently and constantly growing, and that the traffic is qualified.

Our second team is the database building team, and its job is making sure we engage customers on our site.

And then the third team we have is a conversion rate team whose job is to get a higher percentage of people to transact and actually make a purchase.

And then we have a cost control team who looks at our income statements and makes sure that we don't have any extra expenses. They are constantly asking good sound fiscal questions like:

Do we need to send two people to that conference? Do we really need to hire another person to fill that position when someone leaves? Do we really need to buy that piece of equipment right now? That keeps us aware of those finite fiscal issues.

Jon, you definitely sound like a dot com survivor. Your product is successful and it's such a great idea...
And you know that's funny in a way, because there was a time when I looked at our product and I would just think our company is so non-sexy, our product is so non-sexy! No bells and whistles.

Is that when you were looking at Victoria's Secret online?
(Laughs.) Yeah, really yeah, but it seemed like there were so many companies out there doing all this stuff, like shopping bots and all these flashy sites. I can't even remember most of them now and we weren't doing anything like that. We were just selling luggage online.

But the key is that you're still selling luggage online and you can't remember those other companies' names anymore because they're gone...
That's right, and now it seems like something like ebags is sexy!

Right!