5 or 6 Words That Online Stores Use to Earn More

That’s right, with these 5 or 6 words your online store can earn more.

Okay, so that sounds a bit like something you might hear in an infomercial, but it’s true and I’m not selling anything. I’m just passing along something we have learned here at Monetate, something that can seriously improve website conversion rates and revenues for online retailers.

You do not have to use Monetate to use these words, you just need a simple business rule and a way to implement it on your retail website. The rule goes like this:

IF visitor IP address resolves to a state where we do not collect sales tax on purchases from our website, THEN display NO SALES TAX message, ELSE display nothing.

Below you can see this strategy in action on the website of Sheplers, the Wichita-based western wear retailer (www.sheplers.com). You can see the 6 words in the blue box with white border (obviously 5 words if a state name is only one word). So what effect do you think this has on shoppers?

Revenue-per-session increased by 6.48 percent (as measured against a control group). I happen to know the answer because Sheplers is a Monetate client and was kind enough to share that information. But there’s no reason to think these words won’t work just as well if you use some other product or even in-house code to implement them.

(Disclaimer #1: You should always implement such things on a test basis, with a control group, until you are sure they produce positive results–you don’t want to find out the hard way that your online store happens to have the only customers in the world that don’t like to shop tax-free.)

(Disclaimer #2: This blog post should not be read, acted upon, interpreted, or otherwise construed as tax advice. Also note that the messages described here are designed to indicate the possibility of tax free purchases in certain locations, not to promise specific tax benefits to specific customers.)

Depending on the size of your online retail operations, and the number of states for which you don’t collect sales tax, even 5 percent lift in revenue per session can translate into a pretty big jump in incremental revenue. Furthermore, you are achieving that increase without coupons, discounts, free shipping, or anything else that erodes margins.

And the creative does not have to be fancy to be effective. These days, shopping by price is almost synonymous with shopping online. Smart retailers know that many shoppers carefully weigh all the factors that affect the final cost of their purchase, including sales tax. Since the sales tax payable on web purchases can be up to 10 percent and varies by shopper location, letting visitors know up front if their purchases are likely to be “tax free” simply makes sense.

Consider the image on the right. When a Monetate client started displaying a simple message like this in their top-of-page menu the website’s conversion rate increased 176 percent!

That’s because these 5 or 6 words are not only helpful in making the sale, but if you point out the potential savings as soon as shoppers land on your site, rather than waiting until they get to the checkout page, it can reduce bounce rates.

Actually, the creative above, and the one on the Sheplers’ page, are not quite as simple as they look. Instead of creating multiple images, one for each of the states for which their online stores do not collect sales tax, these sites use Monetate’s dynamic text rendering to do the job for them. Dynamic text rendering automatically inserts the name of the site visitor’s state into a background image as the page is loaded into the browser. In other words, you provide an image that fits your site’s design and Monetate adds the text (this is handy when you want to keep creative costs to a minimum).

When a website marketing strategy regularly generates anywhere from 5 percent to 175 percent lift in key metrics, it is clearly a candidate for inclusion in a list of best practices. That’s why you will find geo-targeting of “tax free messaging” in our whitepaper: 4 Winning Website Strategies. This paper lists the four techniques that our digital marketing strategists see working the best, repeatedly producing the strongest lift, across the widest array of retail websites. It’s a free whitepaper, so why not download it today?