A couple of months ago I pre-ordered a pair of the Air Jordan Retro 4 Fire Red.
I already was excited, since this would be my first pair of Jordans.
I got them in and it turns out that they are half a size too big, so I immediately checked the shop’s return policy and to my surprise it turns out that I had to pay for the return shipping.
Since I felt a bit of regret coming up, I decided to email the owner of the store with the following proposition: “how awesome would it be if your postreturn customer spending would go up with at least 150%?”
He replied in 10 minutes.
How to Keep Customers Buying From YOU
I shared with the shop owner the importance of building an email list, especially including the people on it that pre-order products.
Then, I gave him the perfect growth hack for an online business selling products:
send a helpful email telling a little bit more about the history of the brand and how to take care of their product.
Remind people of the following: If they are not 100% satisfied with their purchase, they can return it for FREE to get a full refund.
Let me explain.
How Regret Can STOP Future Purchases
Two researchers, Amanda Bower and James Maxham, conducted 2 real-life studies over a period of 4 years to see the consequences of paid and free returns.
They found that customers who paid for their own return decreased their postreturn spending at that retailer 75%–100% by the end of 2 years.
In contrast, returns that were free to the consumer resulted in postreturn customer spending that was 158%–457% of prereturn spending.
Sales increases were impressive in both studies by the end of 2 years:
- Study 1 (paid return shipping): $620.80;
- Study 2 (free return shipping): $2,552.68
Why Did They Spend Much More When Customers Have Free Returns?
People seek pleasure and avoid pain. Such as feeling regret.
As it turns out our happiness frequently depends not on where we are at the moment, but how easily we perceive we might be elsewhere, or in another = better situation.
For me, that was half a shoe size smaller and I could be just as easily walking around the street with brand new Jordans on.
Instead, you’ve got to make it easy for your customers to say to themselves:
“What would I buy if I knew I wouldn’t have to pay to return it?”
Dialogue Optimization: Create Engaging Ecommerce
I ended up with the right pair of Jordans because I engaged in a dialogue with the shop owner.
Based on the free returns research, the data says that you will increase your future spending with at least 150% when you offer your customers free returns.
So, when you offer a new customer free shipping, but also free returns, and you make this process simple, you’re in playing in the same league as Zappos.
This way you are solidifying yourself as the go-to solution for your customers’ purchasing needs by treating customers right.
All you need to do is either institute a policy of free product returns or at least, examine your customer data to determine how customers’ respond to paid returns.