Free Shipping! $10 Off! 10% Offer! Free Gift with Order! Promotions like these are common today. They are a growing part of any print and online marketing program, used to drive Web traffic and increase revenue. But do you know the true cost of these promotions and their impact on your bottom line?
The four most popular offers are free (or flat) shipping, a free gift with order, a dollar amount off and a percentage off. Free shipping is always number one followed by a dollar amount off, then a percentage off and lastly, a free gift with purchase. All of these promos will most likely increase sales. Free shipping most often increases sales approximately 20%.
Even the weakest promo, a free gift, will increase revenue about 5% based on the testing we have done. However, in all cases, the contribution dollars and percent contribution are less than the control (no promotional offer) when all costs are considered. That
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