Jeff Koeze's Blog Good Food, Good Business, and the Good Food Business

2Nov/090

More on “Free” Shipping

This morning I was greeted by emails from a few Koeze Direct customers asking about whether we were going to repeat some of our prior free shipping offers.  A couple explicitly said, "Give me the free shipping, or I'll buy from someone else."   I emailed back to say how sorry I was to lose them.

Like all direct marketers, Koeze Direct loses a certain number of customers every year.  These customers need to be replaced with new ones, and that often requires making some sort of special offer to inspire prospective customers to give our products a try.  We lose money on the first order, but we hope to land a loyal customer and make a profit in the future.

For several years now, a "free shipping" offer has been the #1 motivator for new orders in the direct marketing business, and we have tested these offers extensively.  But such offers can only be successful if we retain those customers and they are willing to pay shipping going forward -- either in the form of shipping charges or in the form of higher prices for our products.  (For more on this, see this post.)

What we are beginning to see is that free shipping has become an expectation from some customers.  If this expectation becomes the norm, it will pose a huge challenge to the mail order business.

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