January 7, 2022 | 6-minute read (1216 words)
Do you enjoy shopping during sales and other promotional events? If so, you're not alone —and that’s why you should think about implementing such initiatives in your own company.
According to a Statista report published Dec.18, 2020, 88% of survey respondents in the U.S. use coupons when shopping. With so many consumers accustomed to receiving discounts and other promotional incentives, businesses need to establish a solid promotional strategy. While businesses can provide discounts through promo codes, coupons, specials and other means, managing them can be difficult. Here's a list of the best practices for businesses to handle discounts correctly and overcome challenges.
Plan what kinds of deals to offer
Offers and discounts can attract a broad audience, but converting them into customers depends on your marketing strategy and the user experience. Devise a promotional plan that benefits both your consumers and your company in the long term. Here are some ideas to incorporate that will make your promos more successful and improve sales.
• Influencer offers – By making a unique offer to an influencer's network, you increase your chances of converting their followers into buyers.
• Holiday and seasonal sales – With this type of promotion, you may want to offer one item at full price and a second at a discount or for free. This helps you clear out residual products from the previous season and encourages customers to purchase new items for the coming season. Christmas and New Year's Eve are excellent times to take advantage of seasonal sales.
• Coupons for in-person purchases – Offer visitors discounts or gifts if they purchase from your brick-and-mortar store or at in-person events such as fairs, expos, trade exhibits, pre-launch activities and the like.
• A customer loyalty program or membership rewards – Customer loyalty programs provide special offers or milestone discounts to customers who spend a particular amount of money or make a certain number of transactions.
• Email/newsletter subscription offer – Invite website visitors to provide their email addresses to obtain a valuable promotional coupon. Then, when they subscribe to your email newsletter, reward them with a welcome offer to convert them into clients.
• Give a present with the initial purchase – Free items are typically perceived as more valuable than discounts. Providing something for free with the first transaction can attract new clients who will remain around and spend more. First-time shopping deals can also help you reach your company goals, whether you are a new brand or looking to expand your consumer base.
• Recurring promotion – Creating a recurring promotional event, such as an anniversary sale, a seasonal discount or a weekly/monthly offer, encourages people to come back to take advantage of a good bargain.
• Prepayment discount – Offering a discount on upfront payments for a service, such as renting a hotel or a car, can encourage the purchase of more expensive things, such as furniture, jewelry or luxury apparel.
• Volume discount – Minimum purchase discounts mean the more clients buy, the more money they save. This type of discount incentivizes clients to spend more and do more business on certain products.
• Abandon cart offers – Encourage customers to purchase abandoned cart items by providing related offers via email.
• Referral offers – Referral incentives can be a great way to encourage customers to spread the word. Give customers an exclusive promo code for every friend who converts through the unique link.
• Limited-time offers or single-use promo and coupon codes – Many firms provide limited-time offers to entice people to buy. Sites such as Gilt and Groupon offering time-sensitive deals have shortened the sales cycle, thereby boosting the companies’ revenue.
How to use offers effectively
Before announcing a sale, businesses must decide what sort of promotion to offer, when to run it and why they are hosting it. There are several ways to implement promotional techniques to increase client loyalty, acquisition and repeat purchases, including:
• Customizing your coupons: Understanding the behavior of individuals who have already visited your site or have already registered can assist you in developing a profitable promotion strategy. Offering promotions or discounts at unique moments during the customer journey may improve their experience and increase conversions.
• Segmenting email recipients with automation software: Use technology to build an automated series of emails and segment recipients to avoid offering consumers a discount on something they've already purchased.
• Providing offers on unwanted inventory or items that aren't selling: A buy-something-get-something deal might help you get rid of out-of-date products and those that aren't selling well. To sell more inventory, use the buy-one-get-one-free technique to sell one popular and one less popular product together.
• Offering exclusive discounts with purchase: Providing a coupon or gift card with a purchase benefits both you and your consumer. While the consumer gets a chance to save, you get another opportunity to make money.
• Considering the "rule of 100" for offering discounts: The rule of 100 might help you determine whether to provide a dollar or a percentage discount. If an item costs more than $100, offer buyers a discount in dollars. Offer a percentage reduction for items priced less than $100.
• Upselling or cross-selling low-cost items: You may offer low-cost products worth $20 or less, such as a book or piece of content, in bundles or upsell to increase sales. Cross-selling allows you to present new goods to your clients that they may not have purchased yet.
• Maintaining profitability when offering discounts: Make sure your discounts do not exceed your customer acquisition expenses when incentivizing your audience. Set your sales objectives high enough to retain a healthy profit margin.
• Providing bundled discounts: You can boost client retention by providing supporting discounts on products they've already purchased. For example, if a consumer buys a bed, offer a discounted bundle of a mattress, linens and pillows. Bundling helps you raise the total number of things you sell, resulting in a higher average order value.
• Free shipping: Customers are typically prepared to spend a few extra dollars for faster deliveries or to wait a little longer for free shipping. Fast deliveries and free shipping are vital factors that compel customers' purchasing decisions. Strive to deliver these services in a way that complements your marketing and pricing strategy.
Some discounting suggestions
1. Be sure your offer is easy to find and apply on your e-commerce site.
2. Vary the types of discounts you offer based on your niche, business size and budget.
3. Provide different discounts and vouchers to different customer segments, based on their value and engagement levels.
4. Before holding a sale, define the goals for providing discounts and free shipping. It may be attracting new customers, debuting new products or moving out old inventory, for example.
5. Use different distribution methods for promotion notifications, such as text messages, email, social media, your website and your physical shop.
6. Leverage predefined templates and schedule your messages, emails and posts to save time.
7. Use eye-catching images, colors, photographs and text for your discount offers.
8. Before marketing new offers, be sure to prepare your website and staff for the increase in traffic and to provide a good customer experience.
9. Begin marketing a sale several days in advance, and consider giving email subscribers the chance to opt-in early.
10. Engage with existing customers on social media to interact with existing consumers to collect feedback and announce new offers or discounts.