Most sites promote free shipping offer on cart page like this (red arrow in screenshot below)–
This is a 6, on a scale of 10. This is how Amazon.com promotes their free shipping–
In both cases effective shipping price is $0. But Amazon’s approach is more effective because they have an action element. Amazon first shows the $6.98 shipping fee, and then waives it for me. I’d give this tactic a 9, on a scale of 10.
The human brain is pretty bad at choosing between options, especially multi-criteria ones. I entered dell.com with the idea of buying a desktop computer. I hadn’t thought much about the anti-virus option, but knew not to be lured by Dell’s cross-sell and up-sell tactics (I know how retailers work, after all). And yet, the lure overcame me. Guess which option I picked?
I bet the dell.com team knew my choice long before I reached the page.
Compostumbler.com doesn’t reveal “Sale Price” of their composter immediately. They ask visitors to enter their offer code (blue arrow below)–
If you don’t have the offer code you can get one by clicking “Get one here” link (yellow arrow above). This reveals a form–
When I filled the form and hit Process Request button the “Sale Price” turned out to be $239.00.
Compostumbler.com could have directly revealed $239.00 and saved me the trouble, but by adding registration form they’ve captured the mailing information of two groups– ‘sold customers’: customers that think $239.00 is a great sale price and are ready to buy + ‘on the fence customers’: customers that think $239.00 is better than $431.00 (the original asking price) but still too expensive.
Now that compostumbler.com has the email address of ‘on the fence customers’ they can send a series of emails that gently persuade them to buy the composter. The first email might justify the cost by emphasizing quality, the second email might contain customer testimonials (written and video), the third email might educate new customers on how to use a composter, etc. By capturing contact information the e-tailer has changed something that would have been a snap decision into a long term gentle persuasion decision. If compostumbler.com is a good email marketer they could easily increase unit sales 20%.
Note: This tactic only works if the item you are selling is exclusive to your site. And it only works on higher ticket, longer purchase cycle items.
Sometimes one finds great ideas from the least expected places. The iPhone app world is highly competitive; in order to generate mass appeal app developers are forced to keep prices low (mostly free) but in order to make a living they must generate profits. So they have to think outside the box.
Here is a great example. Last Friday I noticed STREET FIGHTER was #1 in Apple’s Top 25 Apps list. When I visited the product page I was presented a very compelling offer:
They were offering a huge 71.5% discount just for July 1st. How lucky for me, I caught the promo on July 1st.
While the promo is super compelling my fear was that it would cannibalize sales for 7/2 onwards because anyone visiting this page after 7/1 would sense psychological loss for having missed 7/1 pricing. I was curious to know how STREET FIGHTER was planning to solve this. So I visited the next morning and here is what I saw:
People who visit on 7/2 don’t know about 7/1 pricing, therefore they can’t feel a loss. In fact, people visiting on 7/2 think they’re the lucky ones to be getting the best discount. Great tactic. Question is, are you willing to test this strategy on your product page?
Once a serious shopper is ready, their attention shifts to ADD TO CART area. Novica has a 5 course meal laid out for them (numbered in screenshot below)-
Course 1: Today’s Price- 99.9% of shoppers pay attention to the product price, which means they notice this hyperlink. Novica.com uses that click to tell their story.
Suddenly the price becomes a little less important and the human behind the rug comes into focus.
Course 2 and 3: How can a shopper know if $162.99 is a good price? The site does mention ‘real value’ for the item is $305.95, but as a shopper I know this is marketing talk. I know retailers mark up prices and then give discounts.
What I am familiar with are shipping costs. Look at what happens when I click “calculate shipping”-
I believe the shipping price of $2.99 is much more effective than making shipping free. Here’s why: when a retailer makes shipping free my skeptical mind immediately throws this argument, “Why is this guy absorbing all shipping costs? Something doesn’t add up.” Giving a $2.96 discount is different; in this case my mind imagines, “If the retailer was being sneaky he would have taken the whole shipping price off. The fact he only took off $2.96 must mean this is the best they can do.” Note: this is how my mind is interpreting this information. You should run a test between ‘free shipping’ and ‘discounted shipping’.
Course 4: Only 1 left at this time- This line introduces a sense of scarcity and as we’ve seen in other posts (here and here) scarcity lubricates conversions.
Course 5: “Why are quantities limited?”-
In course 4 novica.com made a claim. Now they’re explaining it. I can’t tell you why this works so well on shoppers but it really does. I did a test where we added a “price explanation” link next to product price. On click a pop-up described our manufacturing facility and quality ingredients. We didn’t change the price in any way. Yet, page conversions shot up 41%. General conversion rule: the more shoppers are informed, the more they feel they are driving the shopping experience and the better they convert.
At this point the shopper is ready to ADD TO CART.
Prospect Theory describes how shoppers evaluate choices.
Think your site visitors are rational? Think again- http://bit.ly/prospect-theory-video
In the world of ecommerce free shipping is the killer app …
Got this idea via @minethatdata–
If your average order value is $20, then $5 off a $30 purchase is a better strategy than giving $ or % discount on an individual item. Why? Because $5 off $30 encourages one-time shoppers to browse several pages and get to know what you offer as they decide what to buy. (source: http://www.nytimes.com/2010/12/20/business/20ecommerce.html?_r=1)
If your average order value is different adjust $ numbers accordingly.
What impact do you think these (shown in red boxes below) …
… have on conversions?
At my local grocery store today I noticed they were out of pie crusts. My first thought was “don’t these idiots know they need to stock-up for last-minute Thanksgiving shoppers?” And then, a few minutes later, as I noticed 5 different display tables showing off prepared Thanksgiving pumpkin pies it struck me- these guys aren’t idiots at all. This pie crust scarcity is designed to increase whole pie sales. A shopper who waits till the last minute (today) probably doesn’t have time to drive to another store. In the process the retailer has cleverly increased my $ spend.