Our blog

Were you one of the many children who saved cereal box tops, hoping to mail them in for a “free” prize? Those free prizes never came free, though; you (or your parents) had to spend money on the cereal in the first place, then include $X shipping/handling…eventually, the costs added up to the point where you were essentially paying the original cost or possibly more than the value of the prize itself. But that’s not what you – or today’s modern consumer – saw. What grabbed your attention then, as now, was the concept of “free”.

Free product or free shipping?

Would you rather be offered shipping for free or an entire free product? What if the product was worth the same as what you’d ultimately pay to ship? Some companies have leveraged this to their benefit: for example, 1928 Jewelry has a recurring sale where the item in question is free, you just “pay only $5 for shipping!”
 

The promo is ingenious: banner images are designed so that “FREE” is the first and main thing that you see. It is colorful, bold, and written in large text. The true cost to you ($5 for shipping) is shown in the smallest text, but it wouldn’t concern most customers since it has been contrasted to the original price. Compare these two offers:

• $5 earrings, FREE shipping!
• FREE earrings (only $5 shipping)!

The savings are the same, but the appeal seems vastly different. Which would you pick?

Free shipping or $$ off?

This isn’t to dismiss the power of a “Free Shipping” offer! In fact, consumers have been shown to often choose this option, even over a potentially higher discount.  Wharton professor David Bell has been famously quoted as saying that “for whatever reason, a free shipping offer that saves a customer $6.99 is more appealing to many than a discount that cuts the purchase price by $10.” Why is this? Many customers’ eyes are automatically drawn to the promise of free, and will usually stay there. 

Multiple studies have demonstrated that those companies that offer free shipping around the holidays pull in substantially higher revenue. This draw has proven so powerful, in fact, that L.L. Bean recently debuted a promise of Free Shipping, no matter the time of year or the amount purchased. Their slogan? “No minimum order, no end date, just FREE.”   They've employed this campaign effectively, including "FREE SHIPPING" in bold letters in their header, so it appears on every page of their site:

The emphasis on savings makes it clear that they know what appeals to their customers. 

Make free work for you

The distinction between “free” and other discounts is more than just a matter of semantics. A/B testing has shown a substantial difference in conversion rates for promos that offer $10 off $100 versus 10% off $100, even though the final savings are the same, for example. The only way you’ll know how this affects your own customers is to test multiple strategies and wordings and assess the response.

So the next time you’re thinking of running a discount or promo, consider making it a “free” one. Just like the kid anxiously awaiting his free cereal prize, customers are often drawn to the thrill of ‘saving’ money even if in reality the savings are minimal.