As part of its efforts to “enhance the consumer experience,” FreeShop.com began testing a limited number of merchandise offers earlier this winter.
Tim Choate, CEO of the Seattle-based firm, said merchandise has comprised 15% of the company’s revenues since the test began in January. Thirty to forty percent of FreeShop’s revenue comes from lead generation, while another 30% to 40% is from advertising.
The winter, overall, has been a time of growth for the site (http://www.freeshop.com). A record 142,000 orders were taken during February; 106,000 transactions were completed in January.
Since FreeShop’s debut, 1.5 million people have completed over 4 million transactions on the site. Overall, 45% of the orders overall are repeat visits.
About 500,000 members currently belong to FreeShop’s club, and receive twice weekly e-mail newsletters about special offers and new features on the site. The list is not available for rental, but advertisers can purchase a sponsorship to contact the subscriber base.
While the Seattle-based company has done enhancements to the file to get a better profile of their 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,” Choate noted.
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 currently the largest category of offers for FreeShop. Choate said he sees potential in the areas of finance, automotive, travel and coupons.
FreeShop currently advertises extensively through Web banners and affiliate agreements with 6,000 other sites, “which gives us a targeted base of traffic,” said Choate, who spoke at the Direct Marketing Association’s net.marketing conference on Monday. Later this year, the company plans to begin offline print advertising in Web-oriented consumer publications.
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