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Thursday, Mar. 25, 2010 at 1:52 pm

Are You Featuring the Right Offer to Optimize Conversion Rates?

By Melissa Burdon
March 25th, 2010

Many FutureNow eTail clients offer free shipping to keep up with the competition.  I’ve also seen some clients offer free shipping to differentiate themselves from the competition (in instances where the competition doesn’t offer it).  In many cases, especially with this economy, I’ve seen free shipping offers increase clients’ conversion rates.  A previous grok post opened the discussion for whether or not customers had come to expect free shipping.  In this post, we’ll reveal what we observed when we asked the questions, “If visitors are coming to expect free shipping, is it having the same effect that it once had?” and, “Should this be replaced with a different offer?”

With these questions in mind, one of my current clients began to test two different offers on their site: “free shipping” versus a “30 day money back guarantee.”  My educated guess was that “free shipping” would win.

testingoffersInterestingly, since launching the test 14 days ago, the results are trending toward the “30 day money back guarantee” as the winner.  We don’t have enough data to say conclusively that the guarantee bests the shipping, and will let this test run for some time before we take any action.  Still, it is worth noting, and not just because we are starting to see signs of a winner.

Whenever a test is running you should ask yourself questions about why results are trending in a particular way, and whether or not this trending calls for further tests. For instance, in the case of my client, should we be testing a version where we combine both offers (free shipping and the 30 day money back guarantee)?

Stay tuned to find out the winner of this test, and until then, think about the offers you present on your web site today.  Are you just offering free shipping because you think that is what your visitor expects?  Is there another offer that may be more appealing to your visitor?  Perhaps where visitors have some hesitation about a product (a lack of brand awareness or a higher price tag), a money back guarantee helps counter the sense of risk involved in the purchase.  What other situations might call for an offer other than free shipping?  What other offers could you be testing?

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Comments (41)

  1. We are currently trialling whether testimonials placed near a checkout button have any effect at all on conversions, as opposed to none at all. Looking forward to seeing the results of this. Seriously thought free shipping would of kicked ass. Exactly why you should never be guessing but always testing!

  2. Oh and out of interest Melissa, are you able to say wot sort of weekly traffic this site gets that you are testing?

  3. Dear Melissa, Our grad department loves your blog.

    However, several grad students have reported that they may be being automatically sent to trash here.

    Have you turned your system over to a third party?

    For example, Akismet has been banned on our campus because it was alienating new prospective clients of several of our entrepreneurial grad students.

    I have removed any website from the website box above in hopes that this comment will not be sent to trash.

    Dr. Ann

  4. Conversion rates are very important.

    However, it is impossible to convert a customer who has been sent to trash before the site owner even has a chance to say hello.

    Several software plug-ins are doing just that, and we hope business owners get the message that that is bad for business.

    In effect, these plug ins decide for the business owner who she will shake hands with at the beginning of a meeting with potential customers.

    No business owner in the world would agree to such a thing, but that’s exactly what Akismet is doing.

    Dr. Ann

  5. The best way to test anything is with testing like this. I wrote an article called “PPC Playtime” in which I simply advocated playing around with conversions and ad placements to get results.

  6. Very interesting article. I would expect the final result.
    Аnother offer that may be more appealing to your visitor can be a gift. :)

  7. Customers nowadays may be thinking more of the long-term effects. This is really a very interesting study. Customers are really getting wise now and not easily woed by free things.

  8. More and more things are becoming free, to attract your visitors. Just a mention that something is FREE, attracts people

  9. How much optimizing is too much optimizing? It goes back to the KISS principle.

    I read quite a few of these articles on how to get more newsletter signups and convert, but after a while, it becomes a heady sense of confusion, at least as a small business owner versus a heavily trafficked corporate site.

    I’ll go with Hotel in Alps with this and go with “Free.”

  10. [...] Are You Featuring the Right Offer to Optimize Conversion Rates? | Conversion Rate Optimization &… [...]

  11. test c

  12. Great article. We could all use better conversion.

  13. Great test, Melissa. It’s always good to see what has worked for other people. And what has failed – we can also learn from a failure.

    The big thing is we all need to run our own tests because what works for one market may not work in a different market.

  14. I have found recently that adding “Free Shipping” above the price on a few of the sites I have worked on, has increased the conversion rate dramatically.

  15. I am too working with an e commerce company.. I have found people still prefer free shipping. many of companies providing free shipping along with 15 days money back guarantee.

  16. Free shipping ofcourse increase the conversion rate.

  17. @Bindaas

    I agree, I’ve seen it do wonders for an online store I run.

  18. The article is very inetresting as conversation is very important. Visitors should not only come to your site once, they should have a reason to come back, and that´s the most difficult part of making a website, I think.

  19. What are the top 10 competitors offering? Free shipping, 30 day money back or both. Not sure how that has been taken into account.

  20. We run several types of promotions and monitor which works best, then we try to improve this. But one thing that does stand out is to give something Free, visiotrs come in droves just to check the offer out.

    Graham Gallagher

  21. It shows that we should not just make an assumption. It is good to have hypothesis versus assumption and then make sure enough testing is done to validate the hypothesis.

  22. Free shipping is a great way to make one stand out positively from the competition (provided that the competition doesn’t offer free shipping).

    I encourage everyone to experiment with different conversion elements to find out what works out best for you and your potential clients. For instance, even the color and design of the “Buy now” button can make a huge difference in terms of CR.

  23. Nice article… shipping is a good choice.

  24. Now wouldn’t that be nice if you could feature a 30 day money back guarantee and still have the same conversion rate as giving away free shipping? That’s gotta help the bottom line quite a bit! Or maybe the guarantee + a flat rate shipping fee would be optimal. There’s so much to test! :D

    And then of course, you could play with the 30 guarantee and offer a 60 day, 90 day, or go all the way like Zappos and offer a 365 day guarantee!

  25. Free shipping, free gifts, discoutns, coupons, it’s all par for the course these days. The way to stand out and add that social/viral effect tot eh benefits of your giveaway is to offer something unique in my opinion.

  26. I agree with JT…it all goes back to KISS in the end. Thinking too much leads to head aches and needless spending in the end.

  27. It is always a good choice to offer somthing free for customer. Customers think that pay the same money and get more.

  28. BE CAREFUL. Offering free shipping may increase conversion–but at what cost to the company’s bottom line? Can your company effectively profit if your cost-per-sale increases by 10 percent? It’s not as simple as just offering free shipping. I advocate services and offers that don’t affect profits as much (money-back guarantees, etc). You may end up with a lower conversion rate–but higher profits.

  29. good article on converting customers. free shipping is always a good incentive to offer a customer

  30. Yes, why no put free shipping and 30 days warranty together?The page optimized is also important.

  31. Very informative article! Knowing how to boostconversion rates is crucial for all online businesses and free shipping could be one of the ways.

  32. Whenever I have offered products the best conversions come from the ones that I offer 60 day money back for. I do 60 instead of 30 because I know the product will work and the customer will be happy with it so I don’t have to worry about paying the money back to them.

  33. thanks it helped alot to clear some stuff about games.

  34. More and more things are becoming free, to attract your visitors. Just a mention that something is FREE, attracts people

  35. I think testing this is inherently tough because it depends on the product and sales cycle. My wife buys all of her skin care products online, and when there is about $50 to be dropped on a bottle of lotion I ask her to do some diligence! Free shipping is always a factor in determining the vendor… Testing this could create some confusion issues, especially if she shops at home then buys when at work (and is served a different offer!)

    I have seen $1 perform better than FREE in several cases- test it yourself!

  36. plywood Testing this could create some confusion issues, especially if she shops at home

  37. I can’t read the commentary alongside graph very well as it won’t scale on my Mac, however, I wonder if the difference in performance is statistically significant. Both lines seem to be tracking almost identically now. I accept the trial’s got a way to go, but wonder about its validity.

    I tend to agree with the comments made above re the effect of free shipping on the bottom line and product and sales cycles.

    Simple correlations are often not helpful in determining actual cause and effect.

  38. hi Melissa,
    I hope you do get around to posting the follow up on whether “free shipping” or a “30 day return guarantee” was better. I’d guess the free shipping would convert better, but there is something to be said for “peace of mind”…
    So again, please post an update when you get a chance! Thanks, Mike

  39. What would be more interesting than the overall stats is to see for different traffic sources what is converting better. GWO is a powerful tool, but the 60,000 ft. view can leave the real gems out. ROIRevolution has a great script that allows you to import multivariate testing into Google Analytics, then using Site Search you can get all the juicy details of your test. There are other ways to do it, but field testing that has worked well for me.

    If you are just running a split test then you can create a separate testing profile. Single out those test pages, create some goals, and see what visitors are causing the most shake-up (both positive and negative). You might find that an optimized mixed of offers per visitor type out-performs just strictly using one or the other. Just a thought.

  40. I’ve actually be quite amazed by the sporadic results we have received from offering free shipping. In some cases our sales have ramped up nicely and in other cases it’s made zero difference. It makes no sense because they are done in the same manner and to a similar audience.

  41. Trends are important, but keep converting above all else.

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Melissa is a Senior Persuasion Analyst at FutureNow.

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