Drake’s love of Free Shipping just may be the most instructive meme in the history of conversion rate optimization. What at first blush seems like a fun observation that all shoppers get intuitively actually packs a ton of insight into the irrational behaviors of human beings—insight you can put to your advantage with your online sales.
To unpack the joke, we all get how the two offers above are logically equivalent but emotionally distinct. Now let’s first get the argument out of the way that the two offers aren’t logically equivalent if a return doesn’t refund the $5 shipping charge. Yes, gold star to the rabble-rouser. Way to derail the fun. Hope you’re happy. Let’s now stipulate that the $5 shipping charge gets refunded. Everyone on the same page now? Excellent.
So why do we love free shipping more? You may think that it’s as simple as preferring the idea of “free” when two things are otherwise equivalent, but in fact, studies show that humans like “free” even when the other offer is, in fact, a better deal. A $4 dollar shipping charge would not change Drake’s love of “free!”
Don’t believe me? Let’s test you—no calculators! Would you prefer a free pair of socks when you buy two, or 34% off when you buy three?
Admit it, you want the free socks, don’t you?
Studies show that you’re not alone1: Most people want the free socks, when in fact the discount saves them more money. Scientists have looked deep into the human psyche to determine why we think this way, and the answer comes down to our deep-seated hatred of fractions. Give us a calculator, and we’ll only hurl it at the discount sign and take the free socks.
We are hopelessly drawn to emotion over logic. We view a 33% increase in quantity as equivalent to a 33% discount in price because 33 = 33 (go ahead and check your calculator: The discount is a far better deal than the freebie).
We are especially mesmerized by double discounts: Give us 20% off, and then an additional 25% off, and we’ll be far happier than a single discount of 40% off (they’re the same. Yes, they are!).
So what does that mean for online retailers? Surely it recommends you make Drake happy with free shipping. But on a deeper level, look at all your pricing to find ways to enhance your perceived value. And in all aspects of your product benefits, emphasize quantity over discount. Your widgets last twice as long, rather than costing half as much per use.
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1Haipeng (Allan) Chen, Howard Marmorstein, Michael Tsiros, Akshay R. Rao (2012) When More Is Less: The Impact of Base Value Neglect on Consumer Preferences for Bonus Packs over Price Discounts. Journal of Marketing: July 2012, Vol. 76, No. 4, pp. 64-77.