Welcome Pop-up vs Exit-intent Pop-up. Which One Is Better For Capturing E-mail Subscribers And Converting More Visitors?

Welcome Pop-up vs Exit-intent Pop-up. Which One Is Better For Capturing E-mail Subscribers And Converting More Visitors?

More and more online stores have started to use welcome pop-ups offering discounts in exchange for visitor’s email address to increase conversion rates and grow their mailing list. However, many business owners are using these welcome pop-ups without fully thinking it through and testing it. Growing a mailing list is a secret weapon for additional revenue and increasing customer lifetime value, however, using welcome pop-up vs exit-intent pop-up might not be as good as it first might seem.

Why is that so and why are exit-intent pop-ups better for your business?

Too many online store owners go with the flow and use a “let’s market to everybody” approach. As of result, business owners spend a large amount of marketing money on converting visitors who would have bought the product anyway.

Marketing spending where you don’t have to do it is called a subsidy cost. Depending on the business scale, this can turn into one of the biggest hidden costs for your online store.

Exit intent vs welcome pop-up

Why are welcome pop-ups responsible for creating marketing subsidy cost and why should you be better off using exit-intent pop-ups?

The answer is actually very simple. Let’s look at two different scenarios.

Here are the base assumptions for the following scenarios:

Your product is priced at US $40; the discount you offer on your welcome pop-up is 10%. Total product costs (including advertising) make up 30$ (a nice 25% margin).

Scenario#1 (using welcome pop-up)

-> 1000 people visit your site.

-> Everyone (including those who would buy your product anyway) see the welcome pop-up

-> 80 people leave their e-mail and receive a discount of 10%

-> From these 80 people, 40 people buy one of your products and receive a discount of US $4

-> Revenue: 40 x ($40-$4) = US $1 440

-> Costs: 40 x $30 = US $1 200

-> Total net profit: US $240

Scenario#2 (using exit-intent pop-up)

-> 1000 people visit your site.

-> You don’t offer the discount on their first purchase, so only 30 people buy one of your products for full-price (as they were already interested in your product and don’t need a discount to make the purchase decision).

-> Others leave the site and receive an exit-intent pop-up. From these people, 5 decide to take the 10% discount and buy the product. So in total, you have 30 people who buy the product for the full price and 5 people who buy it because of the discount (in total – 35 buyers vs. 40 buyers in the first scenario). Opposite the first scenario, we have fewer buyers. But let’s look at the revenue and profit difference.

-> Revenue: 30 x $40 + 5 x ($40-$4) = US $1 380

-> Costs: 35 x $30 = US $1 050

-> Total net profit: US $330

Although the number of buyers and revenue in the second case is smaller, the net profit is much higher. US $240 vs. US $330 (37.5% increase).

This is a clear example of marketing subsidy cost. The exit-intent pop-up is better than welcome pop-up because we are not spending our marketing dollars (discount codes) on everybody. But instead, we only spend it on those few who really need the push.

However, it is not as bad as it looks.

Net profit vs. E-mail subscribers. Playing the long game.

The first scenario got the store owner more e-mail subscribers. So, should you use welcome pop-up or exit-intent pop-up?

I would highly suggest choosing exit-intent pop-up over the welcome pop-up to minimize marketing subsidy costs. Here are the main pros and cons of both methods to help you choose the best strategy for your own business:

Welcome pop-up

Pros: Captures more e-mails than the second option

Cons: Increased marketing subsidy cost

Conclusion: Good for online stores that are regularly adding new products and could use the mailing list to promote new products. Good for extremely high margin products (where the discount barely affects the net profit from one product sold).

Exit-intent pop-up

Pros: Minimized marketing subsidy cost

Cons: Fewer e-mail subscribers. However, this can be substituted with other methods to grow the mailing list.

Conclusion: Good for online stores that don’t expect to generate significantly more revenue from their unconverted visitors through e-mail marketing and instead, want to focus on quicker gains and revenue turnover.

I hope this helped to ease the decision between using welcome pop-up and exit-intent pop-up. As always, if you have any questions, feel free to ask them in the comments and I will get right back to you.


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