Why Free Shipping Can Cost You Less — While Boosting Order Size
Test after test continues to prove the response-driving power of a free shipping offer. But here’s the really fascinating thing:
A free shipping offer tends to work better than percent-off sales or other types of discounts — even when it offers a lower dollar savings than a percent-off discount!
Why does free shipping work better, even if it might save the buyer less?
- Percent-off discounts typically don’t work as well as a specific dollars-off discount. That’s because most consumers can’t immediately compute what their actual dollar savings on a $59 item at 15% off will be. But if you tell them, “save $10”, they understand the true value of the offer.
- Consumers know that many items they locate online are also available at their local store. Shopping online saves time — but if I have to pay a hefty shipping charge, maybe that time-savings isn’t worth it. So a free shipping offer can motivate the online purchase.
Consider offering free shipping for orders over a certain dollar amount. You’ll likely find your average order size will jump up — as well as your response.
Test Case: Free Shipping Cost Less, Boosted Average Order Size!
We added a free shipping offer for orders over $75 for a golf balls client. The average order size shot up virtually overnight.
The bonus? The client determined that free shipping would cost them an average of $7 per order. So for any discount of 10% or more on a $75 order, free shipping would actually cost the company less!