Due to the obvious enticement of the word “free,” the Free+Shipping model became very popular in Ecommerce last year. The people who typically made a lot of money based on this model were those who figured out how to get another sale or order off of the original product they were offering. So how can you successfully use the Free+Shipping business model?
A common problem is that abandonment cart rates go up through this model. People add the free item to their cart, proceed to checkout, see the shipping costs, and then leave the site. For this reason, it’s beneficial to broadcast the words, “Free+Shipping,” on your pages often. This repetition keeps customers aware of how the process is going to work so that they aren’t put off when they go to checkout.
Another thing that many people overlook is listing a “perceived value.” Customers need to know that your item is worth more than what they’re paying in shipping costs. Otherwise, they don’t see the value in paying for the free item. But if customers have a perceived value that is higher than shipping costs, then you’ve most likely secured a purchase.
And believe it or not, your prices can be too low. People will pay for the value that they see. And if you’re offering an extremely low price, it can cause the worth of your product to be questioned. So making sure that your perceived value prices are in the right range is essential in being successful with this model.
Let’s say that you’ve successfully gotten a customer to add the free item to their cart. But from there, you want to increase your average order. Trying to upsell with pop-up offers often doesn’t work in this scenario, although bundling does seem to bring better results. But the best approach is upselling after checkout, once you’ve received a customer’s card information.
A customer adding their card in checkout shows that you’ve earned their trust. That said, once you get their card, customers are simply more susceptible to adding things to their order. You can easily implement a one-click option for, “add to order,” items. OneClickUpsell by Zipify is a good plugin to use when scheduling these upsell offers
You also need to evaluate your messenger sequence and email follow up. We’ve seen an increase in revenue after sending follow up emails about an hour after purchase. It can be an email simply saying, “Would you like to add this related product to your order for just $10 more?” Once you’ve gotten a customer to purchase an item, at that point you’ve already gained their trust and if you follow through on your offer, those customers will come back.
Ultimately, yes, the Free+Shipping model does work if executed correctly. Although it is important to remind customers of your offers, the most recommended course of action is to wait on these offers until after users have put in their card information. So if you’re breaking even on that first free item, upselling another related product can help to increase your profit margins.
Click here for more information on the Free+Shipping business model.
-The Kamozi Team