AS PART OF its efforts to “enhance the consumer experience,” FreeShop.com began testing a limited number of merchandise offers this past winter.
Tim Choate, chief executive officer of the Seattle firm, says merchandise has comprised 15% of the company’s earnings since the test began in January. Some 30% to 40% of FreeShop’s revenue comes from lead generation, while another 30% to 40% is from advertising.
The winter season has been a time of growth for the site (www.freeshop.com). A record 142,000 orders were taken during February; 106,000 transactions were completed in January.
Since FreeShop opened for business, 1.5 million people have completed more than 4 million transactions on the site. Repeat visitors account for 45% of the orders overall.
About 500,000 members belong to FreeShop’s club, and receive twice-weekly e-mail newsletters about special offers and new site features. The list is not available for rental, but advertisers can purchase a sponsorship to contact the subscriber base.
While the company has enhanced the file to get a better profile of its members, it has not yet begun to do different versions of the newsletter for different targets.
“But we’ve reached a size where segmenting makes sense,” the CEO points out.
According to Choate, the average user of the site is age 35 to 50; over half have children and three-fourths are college educated.
Magazines are the largest category of offers for FreeShop. Choate says he sees potential in the areas of finance, automotive, travel and coupons.
FreeShop advertises extensively through Web banners and affiliate agreements with 6,000 other Internet sites, “which gives us a targeted base of traffic,” he says.
Later this year, the company plans to begin offline print advertising in Web-oriented consumer publications.-BN
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