Send Your AOV To The Moon With Cart-Threshold Incentives 🚀
Hey I’m Shane, welcome to another issue of The CRO Weekly where each week I explore how to build a high converting Ecommerce store. If you’re 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 you’re offer is cheap, discounted, has no variants, and applies to your entire customer base – 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 “okay how can we take this up a notch?”
The answer to that is cart threshold incentives.
What are cart threshold incentives?
If you’ve 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%, there’s an overlooked benefit of adding that threshold—it created an incentive to spend more.
Before, customers just bought as much as they wanted. Now, we’ve given them a goal to strive for.
If they have $36 in their cart, and need $4 more to get free shipping…. That cheap, heavily discounted upsell offer they see in the cart looks a whole lot more attractive.
That’s the power of cart threshold incentives. But it doesn’t 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?
It’s 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 discounts
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 they’re now spending $400 so maybe we’re okay with the $200 == 10% off incentive. But for the lower tiers, what can we offer that doesn’t cost so much?
Free express shipping
You know what’s better than regular shipping? Express shipping!
Seriously, Amazon has gotten us all addicted to this 2-day shipping thing. Generally most customers understand you’re not Amazon so they’re fine waiting up to a week to get their package.
But, that doesn’t mean they wouldn’t 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 didn’t have food, drinks, or even toys. Instead, it had “mystery boxes”.
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.
While it’s definitely a great business, the point I’m trying to make is that people love a bit of mystery and you can use that to your advantage.
It doesn’t 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 don’t 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, they’re getting a free $10 product. In reality, this gift only cost you $.30 to add to their order. Let’s 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, I’m going to share a few examples and why these designs work really well.
And if you don’t want to, or can’t show the incentives in your cart another option is to use a separate pop-up widget. Here’s what one of my clients is using for their black Friday promotion:
That’s all for this week’s issue. If you have any questions or just want to talk about this week’s 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!