Send Your AOV To The Moon With Cart-Threshold Incentives đ
Hey Iâm Shane, welcome to another issue of The CRO Weekly where each week I explore how to build a high converting Ecommerce store. If youâre not subscribed you join 1078(!) people that are right here:
A few weeks ago I wrote about the formula for creating a high converting up-sell offer.
If youâre offer is cheap, discounted, has no variants, and applies to your entire customer base â you should be seeing a high take-rate on that offer and a nice boost in AOV.
Instead of stopping there, I like to ask myself âokay how can we take this up a notch?â
The answer to that is cart threshold incentives.
What are cart threshold incentives?
If youâve been reading for a bit you may remember the counter-intuitive results of removing free shipping from a store.
The long and short of it is, there was no negative impact on AOV or conversion rate when you changed free shipping to only be unlocked if customers spend $40.
While that change increased profit-per-visitor by up to 10%, thereâs an overlooked benefit of adding that thresholdâit created an incentive to spend more.
Before, customers just bought as much as they wanted. Now, weâve given them a goal to strive for.
If they have $36 in their cart, and need $4 more to get free shippingâŠ. That cheap, heavily discounted upsell offer they see in the cart looks a whole lot more attractive.
Thatâs the power of cart threshold incentives. But it doesnât have to end there.
Adding tiers to your incentives
$40 is great but how do you get customers to spend $80, $120, or even $200?
Itâs simple really. You need to give people a reason to spend $80, $120, or $200.
So what incentives can you offer for people to spend more?
Strict percentage discountsÂ
An easy one is doing tiered discounts. We can offer 3, 5, and 10% off for hitting our thresholds. Now our tiers look like this:
spend $40 to get free shipping
spend $80 to get 3% off
Spend $120 to get 5% off
Spend $200 to get 10% off
The benefit of this is that the progression is clear and easy to understand. But, strict % off discounts have a problem in that the costs scale with cart size.
If someone spends $200, 10% off is $20 in lost revenue. If someone spends $400, 10% off is $40 in lost revenue!
Of course theyâre now spending $400 so maybe weâre okay with the $200 == 10% off incentive. But for the lower tiers, what can we offer that doesnât cost so much?
Free express shipping
You know whatâs better than regular shipping? Express shipping!Â
Seriously, Amazon has gotten us all addicted to this 2-day shipping thing. Generally most customers understand youâre not Amazon so theyâre fine waiting up to a week to get their package.
But, that doesnât mean they wouldnât love to have it arrive in 2-3 days.
Instead of bemoaning Amazon for corrupting our expectations, lean into it. Tell customers that you can do free express 2-3 day shipping if they spend a certain amount.
For one client I work with, average shipping costs are $7.50. For express shipping, it only costs $11!
That means this free express shipping incentive only costs them $3.50.
If we swap out one of our discounts for express shipping, our incentives look like this:
spend $40 to get free shipping
spend $80 to get 3% off
Spend $120 to get free express shipping
Spend $200 to get 10% off
Free mystery gifts
I was at a bar last week and there was a funky looking vending machine. It didnât have food, drinks, or even toys. Instead, it had âmystery boxesâ.
Everything was a mystery. Mystery earrings, mystery bracelets, mystery stickers⊠and people loved it!
For $10 you could get a cheap pair of earrings that probably cost $.10 to make.Â
While itâs definitely a great business, the point Iâm trying to make is that people love a bit of mystery and you can use that to your advantage.
It doesnât need to be complicated. You can do:
a mystery gift card where people get $5-10 off
A mystery accessory where people get one of your cheap accessories for free
A mystery sticker pack
The options are kinda endless and donât necessarily need to be related to your core product offering.
The beautiful thing about mystery gifts is not just that people love them but that your costs are not what they seem.
For example, you can set the price of your mystery gift to be $10, but 100% off. In their mind, theyâre getting a free $10 product. In reality, this gift only cost you $.30 to add to their order. Letâs add a tier:
spend $40 to get free shipping
spend $80 to get a free mystery gift
Spend $120 to get free express shipping
Spend $200 to get 10% off
We now have a nice mix of incentives that are motivating for customers while not costing us much.
The next question is, how do we display these on our store?
Displaying these incentives on your store
How you design these offers into your cart is going to depend a lot on what the offers are. So, instead of trying to walk you through the process, Iâm going to share a few examples and why these designs work really well.
And if you donât want to, or canât show the incentives in your cart another option is to use a separate pop-up widget. Hereâs what one of my clients is using for their black Friday promotion:
Thatâs all for this weekâs issue. If you have any questions or just want to talk about this weekâs issue, you can hit me up on Twitter.
I hope all of your Black Friday preparations are going smooth and wish you the best of luck in crushing your sales goals this year!