Wouldn’t you like something for nothing?
I know I do.
I wondered how others felt so I put together a quick, informal survey to see what patterns emerged in people’s buying habits.
I asked 247 people this question:
Which do you think is the better deal assuming all of equal value? Free shipping, a discount, or a free bonus with purchase?
In my informal survey, 93% of those that responded stated they preferred free shipping.
Which of these responses sound like they could be your customers? Or you?
“If I’m comparison shopping, free shipping can be a deal breaker.”
“Free shipping makes me feel like I’m getting something for nothing.”
“Spoiled by Amazon Prime. I hate paying for shipping”
In the battle for eCommerce customers, you need to give something to them that pushes them over the edge to take action and buy from you. Free shipping is often that incentive.
A major point of friction for online orders is the cost of shipping. While logically, customers know that UPS and the Postal Service aren’t free, they still see companies like Amazon shipping stuff for free. This sets the expectation that you, too, should be able to deliver their order for free.
Business Realities of Free Shipping
The challenge on the business side is that shipping products to your customers actually costs money! You can offset giving your customers free shipping with slightly higher product pricing. Or alternatively, try to make it up in volume – which isn’t always a winning proposition.
If you have a unique product that isn’t offered elsewhere, you have an advantage. You can lift your base prices to help offset free shipping because there won’t be any comparison shopping.
When you sell a product that is available elsewhere, free shipping may swing the customer to your favor.
Power of Free
There is great psychological power in “free”. As Chris Anderson discusses in his book, there are many ways that “free” can be used in business. If you’re not careful, you won’t make any money. Physical and tangible items still have costs (like shipping) where as digital products and services are rapidly becoming cheaper (or free) to deliver to customers.
If you do offer free shipping to customers, they will grow accustomed to that deal. Be careful when you change a free offering as it will cause customer angst.
Have you had success using free shipping to get customers to buy from you? Let us know in the comments.