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.