By | Naveen
Discount pricing and offering deals—if done correctly, help you win customers and earn their loyalty towards your brand. On the contrary, if you execute it ineffectively, of course, you will gain customers only when you offer discounts on your products which can diminish the value of your business.
Offering discounts is undeniably one of thebest eCommerce tools to improve the shopping experience of your customers. However, its advantage lies in using this tool in the right way. You must be wondering what we mean by doing the discounting correctly or incorrectly. Well, the answer is the whole strategy or tactics you apply to the process. You cannot go blind while quoting a discount price because this can set a self-doubting picture of your business or your potential client might think you are not confident about your product value.
The strategy you use in offering the discount is more important than its percentage. In this post, we will walk you through some finest discount strategies that will surely help you increase your conversion rate. But before diving into the concept, learn how discounting strategies actually work.
How does discounting strategy work?
Simply put, a discount strategy tells you why you are doing it, and the tactic you use for offering it explains how you will do it. Your discount strategy should clearly show what you are targeting to achieve with it. Almost every eCommerce store adopts discount pricing to create more conversions. However, there are other important goals that are associated with a discounting strategy which are:
- Increasing sales.
- Sell unsold or diminishing products.
- Enhance customer retention.
- Obtaining new customers.
- Earn the loyalty of existing customers.
- Promoting new products.
If your main objective of running discounts is to increase the rate of customer retention. Then your discount strategy should include a tactic that encourages more and more existing customers to keep purchasing from your website. In such case, value-adding or membership tactic is ideal for attaining your goal. When you clearly define your eCommerce discount pricing strategy, it would be easier for you to decide on a tactic to achieve your objective. Therefore, a discount method is a micro-level action that you need to take to accomplish your goal of discount pricing.
If you fail in setting your goals correctly, it not only work against your business brand but also quoting extra discount can affect your return margin. Here are some of the best discount strategies that will help you experience more conversions and earn huge revenue.
- Incentivizing people with discounts
This strategy is based on rewards and it is one of the best methods to win customers and earn their loyalty. There are specific actions that your customers need to do before accessing the discounted offer. These actions work in your business’s favor. Such benefits can be both monetary as well as non-monetary.
For instance, you can ask new customers for signing up for an email subscription and in return get a percentage of discount on their first order. If you follow this strategy, you can encourage people to buy from you and entice new prospects to become your customers with targeted emails. Such an incentive encourages people to buy your offerings. BOGO (buy one get one) offers are the best example of such discounting strategy.
- Discount for preventing abandonment
There are many eCommerce websites that encounter cart abandonment. You can re-entice customers with good discounted offers who had abandoned their cart without checking out. Offering discounts greatly help with conversion and increase traffic to your website. You can send targeted emails to your prospects who had left the website without checking out. You can also employ tools and software that help in detecting customer actions who abandon the cart. Sending pop-ups with a discounted offer or suggesting related products with good deals can help you earn them back.
Even if your site visitor doesn’t pick any item, you can opt for an exit-intent pop-up to request their email for getting a good discount on their first purchase. This will motivate them to buy your offerings.
- Targeted offers and promos
This discount strategy is great for engaging existing customers and enticing them to make more purchases. By scrutinizing and tracking their purchase history, you can send promotional emails that tell them about discounts and running offers on products that they likely require. You can do it through targeted social ads and emails. You can offer combined discounts like when they add any particular product to their cart they will get an additional deduction on the total cart value.
You can also offer supplementary, small, or free gifts which you can afford. This will help you go one step ahead and win the loyalty of your customer. This type of strategy is good for gaining new customers and winning their loyalty. But be careful with the gifts, they should not be too valuable because customers will develop the habit of getting them and not every time you could offer such deals.
- Flash sales
Flash sales are one of the finest conversion strategies if you do it correctly. In this strategy, you limit the duration of sales or user count for availing of a specific discount. You can display the available slots to earn the discount or show the time left for the wind-up of the sale. This can help you compel your visitors to complete the checkout or purchase impulsively. It is consumer psychology as you trigger their fear of losing the best offer. They feel hard to resist such a good offer and make the purchase before it expires.
You can display a countdown clock on your website that tells how much time is left before the deal expires. Doing this will drive a sense of urgency in people to make a purchase which would boost your sales.
- Seasonal discounts
You can choose to offer specific discounts on a particular product seasonally. Simply put, you can pick an occasion or specific time of the year to offer discounts on your products. For example, if you sell jewellery then you can do a lot of creativity on discounts and deals during wedding seasons or valentine’s week. There will be numerous people who will be looking for discounts during this period. You can take advantage of this opportunity to increase your conversion rate.
If you don’t want to wait till that period then you can offer deals during the new year, black Fridays, or important festivals. There are countless eCommerce sites that are utilizing seasonal discounts strategy, pulling many people and earning huge profits.
- Pre-order discounts
This discount strategy proves to be beneficial when you are about to launch a new product in the market. Offering pre-order discounts not only helps in generating leads but also maximizes your revenue by running such deals. This strategy helps in bringing organic traffic to your eCommerce site.
However, avoid offering a large percentage of discounts. You should strike a balance while staying competitive in the market. Offer only a small ratio of the entire product cost. Try building a reliable image because it encourages people to move forward with the purchase.
- Free shipping
One of the best discount strategies is offering free shipping to your customers. Based on a recent survey, shipping costs have led to 52% of cart abandonment. By offering free shipping on your products, you can get that competitive edge over your competitors.
If you opt for providing free shipping, you can encourage more customers to buy your products even if their cost is higher. There are many eCommerce stores that have minimum order criteria for buyers to qualify for free shipping.
- Offers for newbies
You cannot turn every new visitor into a buyer. However, you can nudge them in that path. By offering good discounts on first purchases, you can soar your conversion rate. You can offer a combination of first-time discounts with the money-back option to motivate site visitors to be your customers.
Ask for their email details to get free shipping or a discount on their purchase. This will create a path for marketing other products. Once you have the emailing details, you can send them videos to get a good understanding of your business and offerings.
The bottom line
Discounts are an effective tool to engage customers and boost sales. But offering discounts doesn’t mean pitching the deals just like that. It requires meticulous planning before running offers on your website. If done correctly you can spin huge profits out of discounting strategies but if you don’t execute them well, it can be detrimental to your brand. Therefore, you need to find the right balance while deploying any discounting strategy. Do the requisite research because without it you cannot move ahead as you will have no idea about your prospect’s buying behaviour.
Make sure that you have clear goals to entice new customers and enhance your sales. All the aforementioned discounted strategies will bring great results for your business. Adopt any of them to experience a level-up in sales!
Naveen is the marketing and product head at JoomDev. This company is based on a web development company, He loves to convert his ideas into reality by developing products to make your online business success with his best eCommerce tools.