Even More Proof Free Shipping is High on Customer Want Lists

Written by  April 8, 2009

I’m always saying how offering free shipping will boost sales. After all, it is one of the most important factors in turning a potential customer who is “on the fence” into a lifetime customer.

Survey after survey reveal that consumers rate free shipping high on their list of expectations from online e-tailers.

So I ran a survey of my own on a current client site which has a number of very nice offers that distinguish them from the competition. I will add that this client has product prices which are on average higher than the competition … in some cases significantly.

We placed an optional “after order” survey on the thank you page of the website so as not to interfere with the buying process and asked a number of questions. The first question was simply “What was the main reason for your purchasing from us today?” The results are below and guess what reason was a leader of the pack? You guessed right if you said free shipping.

free shipping survey results

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Comments

11 Responses to “Even More Proof Free Shipping is High on Customer Want Lists”

  1. Independent Computer Consultant Tips on April 8th, 2009 1:41 pm

    But how do you promote an electronic product such as ebook which by definition has free shipping?

  2. Eric on April 8th, 2009 2:16 pm

    Good question. For digital products, the approach needs to be a bit different. Rather than showcase the “shipping” features, you would showcase the “immediate access” or “immediate download” or even “instant access” features. When a buyer is looking for a digital product they want it “shipped” quickly and the more you play that up, they more success you’ll have (providing the ebook has valuable info in it of course.)

    In this case “shipping” is actually “delivery” to their inbox.

  3. Independent Computer Consultant Tips on April 8th, 2009 5:10 pm

    Good idea, thanks!

    Will add it to my site.

  4. Lis on April 9th, 2009 1:38 am

    Do you think free shipping has as much of an impact when shipping prices are already very low? My shipping costs are only a few dollars for most orders because my products are very light, so I’m not sure that my customers would be as motivated by that type of promotion. Is “free shipping” something that tends to attract new customers or do you use it more for enticing your current customers to buy again?

  5. Eric on April 9th, 2009 12:18 pm

    Good question Lis.

    My initial reply would be to test in order to find out.

    My thoughts and experience tell me no matter the price, free shipping gives you an advantage. It’s not always the fact that the customer is getting a better price, but the more perceived notion of getting something for free which pulls the most weight.

  6. JOhn on April 10th, 2009 8:51 am

    Very interesting survey. Thanks so much for sharing!!

    Just a point of clarification, though: Free Shipping isn’t the leader. Especially if you combine the three elements which really makes a shopping experience good for a customer: customer service, product selection, fast response (quick shipping). Even if you don’t combine those three elements together, Free Shipping still ranks lower than product selection.

    Of course, it goes without saying that Free Shipping is clearly important to a lot of customers. I wonder if, as the online buying public becomes more savvy, they will begin to notice that Free Shipping is never free – businesses usually find a way to recover that cost.

  7. Raquel Hirsch on April 12th, 2009 4:47 pm

    Hi,

    This is very interesting and it generates many ideas in my mind, but I am wondering about two very key questions:

    1. Instead of doing a survey (“So I ran a survey of my own on a current client site…”) which is prone to error as people report what they remember or what they think they need to say, why would you not run an A/B test using a tool such as Google Website Optimizer (free!) and determine with statistical certainty whether or not free shipping lifts conversions?

    2. Since the name of the game, if you want to stay around to see another day, is profitability, isn’t the real question “By how much does free shipping have to raise conversions to break even and offset the additional cost of free shipping for everyone”? Again, the only way to do this is through A/B/n or MVT testing.

    Raquel

  8. Eric on April 13th, 2009 8:01 am

    Good points Raquel. Answers in order below.

    1) Yes this a good point. I do run GA’s Website Optimizer on the site and always run a number of promos on this site to see what works etc… (in addition to the optimizer info). Free shipping promos always produce higher sales conversion on the site. That holds true for both new and returning customers.

    2) Many may be surprised to find out that this particular client has a sustained conversion rate (sales conversion) over the past 2.5 years I’ve worked with them of a whopping 16%. That is well over the industry standard rate of 2.4% conversion. Yes, 16% of those that arrive at the site purchase. Our follow up program is constructed so that we typically get a repeat sale from those new customers about every 2 – 3 months. We’ve got it set to build the base and add new customers every month.

    Here’s the other kicker. Free shipping doesn’t need to boost conversions that high at all in this case … we built the cost of the shipping into the product price. In addition, over 95% of people that come to the site choose free shipping.

    Elaborating a bit on that point, this client uses free shipping with conditions (you must purchase a certain dollar amount of product in order to hit the free shipping threshold.) That was also strategically setup in order to raise the average order value which in turn boosted sales almost overnight.

    After careful analysis and testing we set a threshold that always causes the customer to need to buy a set amount of product. That set amount adds enough to the bottom line that the shipping is always covered and puts added profit in the client’s pocket and is setup in such a way that as mentioned above, the typically come back within 2 – 3 months to repeat purchase.

    The result of this testing and planning has taken the client from no internet presence to over 1.2 million in sales in just under 2.5 years.

    Thanks for the great points and good conversation! Hopefully I’ve addressed your points here and brought a bit more clarification to the topic.

  9. Lloyd Borrett on June 1st, 2009 7:51 pm

    I’d be interested in learning more about the survey questions you used, plus how you added the survey to Zen Cart.

    Cheers, Lloyd Borrett.

  10. Eric on June 8th, 2009 9:46 am

    Lloyd,

    The survey was added via a LINK (url) placed on the Thank You Page (after a successful sale). They could click it if they wanted to fill out the survey, but were not forced to do so. You don’t want to force them to do that.

    The questions asked were basic and some are geared directly to the company that is referenced here. They were:

    1) “What was the main reason for your purchasing from us today?”

    2) “How frequently do you purchase from us?”

    3) “Would you be interested in an “Auto Ship / Delivery” program if offered?”

    4) “How do we rate on the following attributes?”
    1 = Well Below Average , 2 = Below Average , 3 = Average , 4 = Above Average , 5 = Well Above Average

    Customer service
    Professionalism
    Quality of Products / Service
    Understanding customers’ needs
    Sales staff
    Price

    And then we allowed an open ended area for additional comments.

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