FREE…
The prospect of getting something for FREE excites us all!
It is an irresistible pull that most people are powerless against.
However, there have been enough internet scams in recent years that some people will proceed with caution when they see it advertised boldly. So, if you do want to pursue this sales tactic you need to be prepared to be straightforward with the details of the offer to put the skeptics at ease.
Free Plus Shipping offers are simple to understand. The product is sold for $0 and the customer only needs to pay for the cost of shipping.
How can you stay in business by giving away your product for free?
There is a right way to do it, and still make a profit. I will show you how in just a moment.
As with any business opportunity, there are pros and cons.
Free Plus Shipping offers can create lots of new customers and can grow your customer list. Although you don’t typically make a profit on the main offer, the real value comes from additional sales off of a new, larger customer base, and potentially the upsells within the funnel.
Free Plus Shipping offers are not for everyone. If not done properly, they can lose a lot of money very quickly and let customers take advantage of your “generosity”. You need to have clear goals, a long term plan, and an understanding of the economics of the offer to make this work.
Is it right for you?
Revenue is key in any business. It is the ultimate goal of any business, and should be part of every business decision. The goals of your business for today and the future need to be aligned for your products to be successful. You need to keep this in mind when structuring your “Free Plus Shipping” plan.
It is preferable if the main product is:
- Cheap to produce –less than $3.00
- Valuable- retail over $20
- Lightweight and small in size- reduces actual shipping costs
- Market Appeal- has a proven market for the class of product
- Related- availability of related products that can be attached to the main offer
- Branded- drives desire to have your product over generics in the market
Structuring Your Free Plus Shipping Offer For Success
Once you have your main product chosen, you need to look at several other factors to ensure that the structure of the offer will have positive results. Such as:
- Shipping- how much is reasonable to charge? Will you ship domestically and internationally?
- Opt-ins- Consider a way to capture contact info, even for people who do not buy.
- Add-on items- What products make sense as Order Page Add Ons, if any? For how much?
- Upsells- What products make sense in each slot? How many and for how much?
- Continuity- What products can you offer continuity on? Do you have more than one product with continuity? This will help determine positioning in the funnel.
- Traffic- What do you know about the customers that will be seeing this offer? Knowing the source and possible mindset of these potential customers will help structure the offer.
- Follow up- What are the follow up offers that you will be sending out after the initial offer? Will you further segment your customers, and how can you reach those people that did not buy the main offer?
- Economics- Do your prices and revenue result in a positive outcome that align with your business goals?
Let’s take a look at each of these items in more detail.
Free Shipping as a Marketing Tool
This is where the weight and dimensions of your product is vital. Obviously smaller and lighter objects cost less to ship. Ultimately you want to break even when you pick the shipping price to charge the customer.
For example: If your product costs you $3 to produce, and the average domestic shipping and handling cost is $5, then you want to charge at least $8 for shipping. (Since International Shipping rates can differ drastically from Domestic rates, you may need to have a second offer for International customers, or limit the availability of the offer.)
Keep in mind that most people know that you are charging more for shipping than what it actually costs, so keep the amount within reason, or you may be driving away some potential customers.
Email Opt-ins
Asking your customers to take a micro-commitment can benefit the entire sales funnel and future follow up success. It should be something simple, like a first name and email address, to move to the next step, with very little friction.
A free PDF or video with information related to your product are fairly frictionless and inexpensive Opt-in offers that allow you to capture customer info for a very low cost.
E-Commerce Add-ons
Add-ons are positioned on the order page, below the order form. They should be one, or two complimentary products, offered at a desirable discount. Ease of ordering is the key component of these offers. A simple check box to add to order works best for these.
Keep in mind that you should not be adding additional shipping charges on for these Add-on items, so that discount offer needs to be low enough to be a desirable add on, but still high enough to cover the extra shipping cost to the order.
Upsells/Downsells
The number of upsells and downsells in the funnel is dependent on how many other products you have available that will complement the main offer. Start off by thinking of it from the customer’s point of view. What do you already know about the typical customer in your marketplace? What kind of buying patterns have you witnessed before? Make some sense of the order and use of the products that you put behind the main offer.
You do not have to offer only inexpensive items as Upsell. But if you do use higher ticket items in the line-up, couple them with a downsell that is a trial of that item, or a 3-pay option to make the higher price easier to swallow.
Also, you should not be charging additional shipping for these items, so keep that in mind when you do your funnel revenue calculations. See below for examples of these calculations.
Continuity
If your front end, Free, product is something that is disposable and often bought in bulk, it opens you up to being able to offer a continuity offer at the same time as you are giving it away for Free. You need to be very clear to the customer that they are also signing up to receive more of the product for a certain price every month, or you will have lots of problems with returns and chargebacks and very unhappy customers.
Online Traffic
Does what you know about your traffic source match up with your messaging and product offers? It is important to get the right mix of quantity and quality when it comes to traffic. Also keep in mind, if you’re using cold traffic, that these people are coming in cold and possibly know very little about your brand. Make sure that you put enough effort into your sales pitch to convert your traffic into customers.
Email Follow-up
You need to have your follow up plan set before you get any customers coming in the door. The “Free” offer and low resistance opt-ins will get the customer thru the door, but a well-structured follow up sequence can turn them into long term loyal customers.
There needs to be at least 2 sequences set up following the typical Free Plus Shipping off. The first will go to those customers that took the Free Plus Shipping offer, and the second to those that just opted in took the Opt-in offer without making a purchase. The contents and offers of these follow ups will depend on your product assortment and business goals for the long term.
Marketing Economics
The Economics of your offer has some fixed values, but there is a lot of fluidity in it that gives you some room to maneuver. Also keep in mind that you will want to test different variations of the offers to see what converts the best and gives you the overall best revenue in line with your business goals.
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