Win Customers With These Shipping Strategies
Did you know that one of the biggest reasons why an online customer does not complete a Web purchase is because she does not like your shipping options?
As an E-Commerce business, you should carefully strategize your shipping. Your goal is to generate more revenue from a new customer over her lifetime than the cost you spent to acquire her.
Here are a few shipping strategies to win customers.
Do your homework
Before testing a new shipping strategy, you first need to calculate how much a customer will buy from you over her lifetime plus the profits that they generate. You then compare this to the cost of your promotion to get that customer (i.e. free shipping). Here’s a quick guide.
- What is the average lifetime value of your customer? To know this, get the average transaction value of your customer then multiply this by the average number of transactions your customer has completed in a year. After that, multiply the result by three to get an idea of her lifetime value.
- What is the cost per acquisition of a new customer?
- What is the percentage of visitors who leave their shopping carts and payment pages without completing their transactions?
- What is your average shopping cart shipping cost? This is your trade price with your carriers. Get this number by dividing your total shipping expenses by the number of completed customer transactions.
- What is your total shipping profit? Get this number by subtracting your carrier cost from your shipping charge.
Try out new shipping options
Try out new shipping options for the same time periods. Run each test independently. The ideal result is an increase in buying customers and a decrease in the number of people who abandon their shopping carts.
The most popular and one of the most effective shipping promotions is Free Shipping. Promote this heavily throughout your site. Another strategy is to reduce shipping rates heavily. You can also match your competitors’ shipping rates.
Analyze your results
You need to look at the conversion rate. This is the number of visitors who convert into paying customers. If you have Google Analytics installed, you can easily look at these data:
- The percentage of visitors abandoning their purchases
- Revenue and profit increase versus the cost of covering the shipping fees
- The number of repeat customers
You can also ask your customers directly and email them surveys to gauge how effective your campaign is. Invest in a franking machine or postage meter to make your work faster and lighter. Once you get a shipping strategy in place, expect to get better results and an increase in your bottom line.
Category: Internet Business Blog |