Should I Offer Free Shipping? Weighing the Pros and Cons

Hiring a Marketing ConsultantWe all know how powerful the words “free shipping” can be to consumers. In fact, this report suggests that online shoppers are more likely to respond to free shipping offers than price discounts. And this infographic is full of compelling points as well, including these two gems: people buy more when they’re offered free shipping, and more than one third of online shoppers would NOT make a purchase without free shipping.

But is it a smart strategy for your business? Here’s some food for thought.
Consider the Differences between Standard Free Shipping vs. Occasional Free Shipping 

Free shipping, whether standard or occasional, will impact your bottom line, but that impact is much bigger, of course, if you offer free shipping all the time. Only you and your accounting support staff/team can determine if that makes sense from an economic standpoint.

For the purpose of this post, let’s put aside profit margins for now and consider some of the other pros and cons of standard vs. occasional free shipping.

Standard free shipping
Pros

  • This could be a huge differentiator between you and your competitors.
  • The backend setup is completed once (no turning on/off free shipping offers or having to gear up, gear down during promotional times or holidays).
  • It will be easier for customer service (again, since it’s standard 24/7).

Cons

  • Not all consumers will see it as a savings—some will assume (perhaps rightfully so) that the shipping costs have been built into the cost of the product.
  • The money has to come from somewhere, which means other operational budget costs might need to be cut (e.g. customer service).
  • If not positioned correctly and/or marketed regularly, free shipping could be something that “blends” with the background, especially to repeat visitors. In other words, if you’re going to offer free shipping, you need to trumpet this fact, regularly and creatively. But if free shipping becomes an overused marketing message, it can become “invisible” as well, meaning people might take it for granted or not consider it special.

Occasional Free Shipping
Pros

  • It’s “easy” to market for the life of the free shipping promotion. We put the word “easy” in quotes because nothing about marketing is ever easy, but occasional free shipping allows you to “easily” create programs—email, web, social—around the free shipping offer since THAT is the marketing hook.
  • It offers a great rallying point, especially during slow seasons—you can lure past customers back with free shipping incentives.

Cons

  • You’ll need more backend maintenance (i.e. making sure the shopping cart is responsive/nimble/accurate as you start and end free shipping promotions).
  • It’s more of a burden on customer service.
  • You will likely encounter some unhappy customers when they realize they recently missed a free shipping window and/or they didn’t realize that free shipping wasn’t 24/7.
  • Once you offer a free shipping promotion, some customers might not buy from you until you offer another one.

If you decide to dip your toes into free shipping, here’s what you should keep in mind from a marketing perspective.

Make it special. Remember, many people expect free shipping, so in order to make it sound special, you need to position it that way. This might mean getting creative with the design of your product pages. For example, maybe the product pages are set up in way that shows a red slash mark through the shipping costs with a big graphic that says “FREE.”

Or if the free shipping only applies for a certain time, maybe you add a countdown timer on checkout pages to let people know free shipping expires in x days, y minutes, and z seconds.

Whether you offer free shipping all the time or only some of the time, you need to make both situations seem special to the consumer. Here are some tips for accomplishing exactly that.

Standard free shipping, no disclaimers

  • Add graphics to your website that highlights free shipping. Take the time to invest in the design/layout AND SWITCH THEM UP OFTEN so that they don’t go stale or begin to blend with the background for people who visit your site frequently.
  • Gather testimonials from real people who talk up not only your awesome products/customer service, but also the value of free shipping. Make these stand out by using real names and images of people (read more about creating effective testimonials here).
  • If your competitors don’t offer free shipping, point that out. State it directly: “And we offer free shipping, which you won’t find with any of our competitors. That means you can save an average of X amount every time you order with us.”

Standard free shipping, with disclaimers
You’ll want to do everything outlined above for “standard free shipping, no disclaimers,” but you’ll want to make sure you have clearly explained your shipping policies on your website and that people can access this information in multiple ways. Include the following:

  • A page on free shipping policies
  • FAQs with a section on free shipping
  • Call-out graphics/buttons on product pages and alerts on checkout pages that tell people they’ll qualify for free shipping if additional action items are met (such as buying another item).

Occasional free shipping
Create a complete marketing program—email, web, social—that promotes the free shipping offer. Since the free shipping is for a specific time period, you’ll want to create a plan that:

  • Teases the promotion before it begins
  • Tells people when it has started
  • Reminds people right before it ends

All of these will create a sense of urgency.

Make sure you measure results. It’s easy to think that free shipping will automatically bring in business. This might be true, and even if it is, you need to consider these other factors:

  • Do people buy more or are they just buying one product and leaving?
  • Do they take other actions, like signing up for your newsletter or following you on social media?
  • Do they come back?
  • Are you selling more with the free shipping offers than without?

And, of course, you’ll need to consider the impact on your bottom line. It’s definitely not feasible for all businesses, especially small ones.

What’s your stance on free shipping? If you’re an online retailer, do you offer it? We want to hear what you think. Share in the comments.

Chris Wallace

About Chris Wallace

Chris Wallace on Google+
This entry was posted in Advertising, Brand Awareness, Customer Relations, Sales Strategies, Small Business Marketing, Small Business Resource and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>