Looking to drive sales this holiday season? Offer free shipping. Free shipping has huge perceived value and can pay-off in added sales.

Case in point: one of my retail pay-per-click (PPC) advertising clients that I manage here at JumpFly offered free shipping on any size order for the last 10 days. Business was brisk, to the point that they were running out of the small free gift they were offering on certain size orders. Their free shipping on any order offer ended at Midnight on December 1st, and they went back to their regular shipping offer (free shipping on orders greater than $75). How did sales do on December 2nd? Dropped by 50%.Free Shipping Works

According to Ken Cassar, an Analyst at Nielsen Online, “Free-shipping deals is a minimum cost of entry.” What does that mean? Unless you are the only retailer in your niche, if your prices aren’t the lowest of all your competitors, and you’re not offering free shipping, you have absolutely no enticement for someone to order from you. The Internet is all about comparison shopping. It takes one click to leave your site, and without a reason to come back, you’ve probably lost the sale.

Another case in point, I did an A/B test in Google AdWords for another PPC advertising client where we compared a free shipping offer versus a percentage discount. The dollar savings of the percentage discount was more than the free shipping offer; an end customer would have saved more money with the percentage discount. Surprisingly, at the end of the test, the free shipping offer outconverted the discount by a pretty hefty margin.

So what can you do if you can’t offer free shipping on any order? Offer free shipping on orders over a certain amount. If you already do that, like my client above who normally offers free shipping on orders over $75, than reduce that minimum dollar amount. One option is to figure out your average order size, than make the free shipping offer just a few dollars higher than that. (Think about Amazon.com and their Free Super Saver Shipping. I know that I’ve added another item to an order, just to qualify for that $25 minimum. How about you?)

And if you do offer free shipping, whatever the deal, make sure you highlight it everywhere on your site and in your ads at Google AdWords, Yahoo and Microsoft. Remember that it does no good to have it only on the home page if you’re sending your ads to an internal landing page. Make sure the offer is displayed everywhere, on every page, and on your shopping cart. You still have roughly eight more days of online shopping, depending on when your cut-off is for guaranteed Christmas delivery. Use that time wisely.

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