My favorite AOV booster

How to use shipping costs to your advantage.

Welcome to the 14th issue of Always Be Learning!

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Today's Marketing Breakdown:

The tactic I'm about to share today is one of my favorites. It's simple, effective, and any brand that ships physical products can take advantage of it.

I'm talking about free shipping thresholds.

It's one of the most basic elements of your sitewide offer strategy, but it is sadly often underused.

What Not To Do:

I see DTC brands make the same mistake over and over again.

"Free Shipping on all orders of $100+"

"Free Shipping on all orders of $75+"

"Free Shipping on all orders of $50+"

They go for the round numbers with no strategic thought at all.

You're leaving money on the table if you do this.

What To Do Instead:

If you're selling multiple products on your site, there's a good chance that 1 or 2 SKUs make up the majority of your first order revenue.

These top sellers shape your first order AOV.

For example, let's say the AOV on your site is $53 and that is mainly comprised of 2 top sellers.

If you were to place your free shipping threshold at $50, you are throwing away money.

Most people are already hitting that $50+ mark, so the free shipping adds no major incentive to place the order.

Instead, raise your free shipping threshold slightly above your AOV.

Placing your free shipping threshold at $59+ accomplishes a few things:

  • You get the left digit effect of charm pricing.

  • Most customers will need to add one more product to get free shipping.

  • Your AOV increases for customers not hitting the free shipping threshold because they are now paying shipping costs.

  • Your AOV increases for customers who do hit the higher free shipping threshold because they are buying more product.

You can even go a step further by upselling specific products at side cart to help them hit that threshold:

Bottom Line:

If you’re selling physcial products, you should be using free shipping thresholds to your advantage.

Test placing the threshold slightly outside your sitewide AOV and see if you can push your customers to buy just a little bit more.

There you have it! 1 marketing tip to help grow your DTC business.

Here’s what else I’m reading in the DTC marketing world:

Hope this has been helpful!

Joe

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