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How ‘Doing The Math’ Adds Up To Increased Online Revenue

Stephen Cobb
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Last week I saw a pretty impressive number: $1.2 million. That's was the annual incremental revenue that one online business expects to generate just by doing some simple math for its customers.

Here's how it works: You extend an offer based on a purchase threshold, then update the visitor's progress toward that threshold.

do-the-math

You can see the strategy sketched out in the image, which features the fictitious Gear store for outdoor gear but uses a real world example from a major online retailer. When the visitor arrives on the website, possibly driven by PPC ads touting an offer of free shipping on orders over $150, or $9 flat rate shipping, the message is clear at the top of the page. (The offer does not need to be free shipping and the strategy can work on ecommerce sites other than retail.)

Now, I admit that free shipping is a sore subject with some online retailers, but you can ease the pain by tying the free shipping to a minimum order size. Setting a threshold like this is a great way to reduce the bottom line impact of such offers.

However, some customers are going to think the $150 threshold is too high. You handle this in two ways. First, there is the $9 flat rate, then there is the math factor. As soon as someone places an item in their shopping cart, which Gear refers to as Bag, the shipping message at the top of the page is programmed to change and show the amount of additional purchasing required to qualify for free shipping.

Speaking as an online shopper, I find that seeing this information prominently displayed is very helpful. I'm smart enough to "do the math" myself and figure out how close I am to free shipping, but if the website does the math for me that makes my shopping experience just a little less demanding. This website also features a small box on the right of the page that tracks Bag action and reinforces the messaging.

This message also gives the shopper a clear incentive to buy more on this visit, perhaps bringing forward a planned future purchase. And if the shopper adds more items to the cart and crosses the free shipping threshold, that's not the end of the story. The messaging is updated as you can see: Order Now and Get Free Shipping! In other words, since you have now qualified for free shipping, why not buy some more stuff and get it shipped for free?

The psychology here is pretty straightforward, someone who found their way to your site is being encouraged to convert several times over. First by adding one item, then by adding more items to cross the threshold, and finally to just keep shopping.

Obviously, the actual numbers that work best for your online business will vary. And you are well advised to test them to zero in on what works best. For example, does a lower threshold produce enough purchasing activity to cover the shipping cost? Does a higher threshold act as a deterrent?

I'm not saying this strategy will produce a huge percentage lift in your conversion rate, but I definitely think it is worth testing. After all, if you have a popular site, even a few percentage points can generate a lot of incremental revenue, like the $1.2 million I saw last week.


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