Discounts are always a great marketing weapon for e-commerce. However, they should be triggered responsibly. E-commerce discounts may yield many benefits like more customers acquired or increased customer loyalty. On the other hand, when used without a strategy or too frequently, a webshop may lose its profitability and might build up an image, only attractive for price-driven shoppers. – well, that’s not a slim share in online shoppers, but still…
Like many other strategies, discounts also work successfully when implemented effectively, and in this blog post, we’ll cover some cases where discounts might come in handy, and relevant.
Implementing discounts effectively
The discount strategy of an e-commerce store depends on the type of business. For e-commerce companies with large margins, using discount offers to drive revenues higher while achieving profitability might be a good strategy, whereas small businesses should avoid frequent discounting for customer acquisition, which might end them up in a loss-making business. Therefore, in such stores, using discount coupons might be a better strategy for customer retention. – instead of focussing on acquisition through discounts.
Here, we’ll list down some cases where using discounts as part of an e-commerce strategy can yield positive results :
If you have such a mechanism at hand, utilize it to the full extent. Offering a discount in case of referral makes total sense because your business gets introduced to a new revenue channel, and giving away a bit of that new revenue to a new-comer is worthwhile.
It roughly costs 10 times higher to acquire a new customer and sell something than to sell something to an existing one. So, discounts work great as retention tools as they do for customer acquisition.
Reaching out to an existing customer, who did a purchase before at your store and offering her/him a discount would bring a conversion with a much higher chance.
Reaching out to influencers
You should always be thinking about the end result of a campaign, but not only the first step of it. So, here, in case of influencers – surely, relevant to your business – if you can manage to reach them out by offering them a discount, which might give them a motivation to test and speak about your product, it can generate a solid word of mouth effect for your store. So, you can basically cover the very first discount at the very first sale, by the following ones.
Bringing the abandoned cart owners back
In this case, your visitors took the long way starting with finding your store, and then a product there and actually adding it to the cart to finish the purchase. But somehow they dropped the journey there and headed away. This might be due to a price that they have faced at that stage, and a discount could really crack that journey towards a happy end with a purchase.
All in all, discounts are useful tools when applied with care. Here, also competitive intelligence is crucial when they are applied. Because, in general, your visitors will be aware of the other discounts available at those other webshops, a.k.a your competitors. In order to gain automatic competitive pricing intelligence from your market, you can give Prisync a try for free now by visiting our home page.