Vijay is the founder of ELEXtensions.com & LearnWoo.com, in charge of Business Development & Marketing. He is passionate about product development and solving various problems that ecommerce customers face. He is a connoisseur of food and likes to travel, go for long drives, and spend time with his family & friends.
Discounts have become an essential aspect of the lifecycle of an eCommerce store. Learn how discount strategy can help and promote your business.
Discount marketing is one of the most common and effective strategies you notice in an eCommerce business. Companies, big and small, resort to this strategy for different goals. You can try offering discounts to acquire new customers, to make them stay with you for the long term, or to reward them for being loyal to your brand.
Discounts have become an essential aspect of the lifecycle of an eCommerce store. In this article, we will discuss some of the strategies you can adopt to promote your WordPress eCommerce store with discount marketing.
1. Have clarity on the type of discount
One of the things you need to consider when creating a discount strategy is how you will execute it. Are you going to offer a discount on your entire catalog, or are you limiting it only to a select set of products? Before setting out, you may have to do some homework on your sales patterns and customer interests. Understand some of the basic strategies to set up discounts before executing a strategy.
Fundamentally, how you can implement a discount varies according to how you apply it. There are percentage discounts, fixed-rate discounts, and directly setting up a reduced price for the product.
You can apply these discount types and some other interesting strategies. Here are some popular discount strategies you can commonly see in eCommerce stores.
- Bulk discounts
- Free shipping
- Seasonal discounts
- Combination discounts
- Buy one get one free
- Discount on next purchase
- Get a gift product
How will you implement these strategies in a WordPress eCommerce store? If you are using WooCommerce, you will find some discount options available by default. However, you may need a Dynamic Pricing and Discounts plugin for more advanced options. You will find several popular dynamic pricing plugins in the WooCommerce ecosystem.
The advantage of using one of these plugins is that you can set up a discount accurately based on your chosen strategy. For example, the above-mentioned plugin helps you create several discount rules that you can selectively apply based on customer, product or order.
2. Consider the perception it creates in the customer’s mind
When you are setting up a discount on your eCommerce store, there are certain psychological implications associated with it. How your customers will be able to perceive a particular offer is really important in the success of that strategy.
For example, if you offer discounts quite often on your site, you may indirectly tell the customers to wait for the next offer. This can lead to customer behavior where they avoid buying full-priced products from your store.
Similarly, the perception of quality is also a concern. This is particularly true for luxury items. A lot of luxury goods are sold at a premium price because of the perception of quality associated with the high price. So, if you are giving a discount on such a product, it can affect this perception of quality and can adversely affect the demand.
3. Create a sense of urgency
As discussed above, customer perception is crucial to a discount strategy's success. However, you can apply certain strategies to create a sense of urgency in customers' minds, which can balance out the negative perception. For example, if you provide an offer only for a limited period, customers will be more inspired to avail of the discount while it is still on.
Similarly, you always need to communicate why there is a discount on your store to avoid negative perceptions. It can be the store anniversary sale or a holiday sale so that customers will identify a reason behind the discount and realize it will change soon.
Another strategy many store owners try is to strike off the original price and then display the discounted price. This will also help the customers get a clear idea of how much they save. It will also make it look like the discount offer is only temporary.
4. Clearly set goals
Every time you offer a discount on your store, clearly envision the outcomes that you want from it. This is very important to give you a clear understanding of the efficiency of your marketing strategies. Generally, there will be a few outcomes that eCommerce store owners look for when they offer a discount on their store. These are:
- Increase average order value
- Rewarding long-term customers
- Acquire new customers
- Gain more brand visibility
There are plugins in the WordPress ecosystem that help you set up user role-based discounts to reward loyal customers. Another strategy would be to create referral coupons so that existing customers will bring in new customers to your store.
You can use discounts to achieve all these goals. And, when you have a clear goal set well in advance, it will be easier to analyze the results as well. So, before setting up a discount, clearly analyze the outcomes you are looking for and accordingly set the conditions.
5. Respond to competitors effectively
Sometimes you create discounts on your store based on the trends in the market. When you have several competitors selling similar products and offering discounts, you really cannot avoid offering some in your store as well. However, there are also approaches that you can take if you don’t want to mindlessly compete in lowering prices.
You can create better value perception in customers' minds without lowering your prices. By emphasizing what differentiates you from the rest of the market, you can still manage to keep your customer base intact.
Instead of succumbing to market pressures, you can protect your business's strengths, such as dependable customer support, product longevity, quicker delivery times, etc. For example, dependable live chat software can help optimize conversions and improve customer service.
Fundamentally, the point is if you offer discounts on your store, it should be because it gives you desired business growth outcomes. Never create discounts just for the sake of it or to match with a competitor.
6. Clearly set terms and conditions
When you have finally decided to create a discount strategy for your store, it is important to set clear terms and conditions for it. One of the basic aspects to look at here is to be transparent. Your customers should not be confused regarding the applicable conditions of an offer. Otherwise, you may face negative consequences like increased cart abandonment.
This is especially important when you set up complex discount terms on your store, like in the case of dynamic pricing and bulk pricing offers. Clearly display the conditions that need to be met for customers to avail of a particular offer. Even when sending personalized discount coupons to customers, mention what makes them eligible for a particular discount.
If you don’t clearly communicate the terms and conditions of a discount offer, it can do more harm than good to your marketing efforts.
7. Retrieve abandoned carts
As discussed above, there might be several goals for setting up a discount offer on your store. However, one very effective outcome of discount marketing is that it can help you reduce cart abandonment.
As you know, abandoned carts have a lot of potentials to increase your store revenue. That is because a customer has come so close to completing a purchase before leaving the cart in that scenario.
Abandoned carts are a great opportunity that you can explore with the help of strategic discounts. By including interesting discount offers in your cart abandonment retrieval emails, you will be able to get back quite a large number of sales.
Unlike other scenarios, abandoned cart retrieval is where you can use your discount marketing strategies more effectively.
8. Analyze thoroughly
Thorough analysis is one of the essential aspects of eCommerce that helps many entrepreneurs thrive. You need to focus on your analytics data when trying out a discount marketing campaign. A/B testing will help you choose one idea over the other when you have multiple options.
Changing how you promote a discount offer can make it more effective. At other times, how you apply the discount during the checkout can change the campaign's outcome. You will be able to get actionable insights like these only if you are analyzing your campaigns end to end.
More importantly, there might be a scenario where offering discounts is totally ineffective for your store or products. In that case, it is important that you understand that well in time rather than knowing it after taking a significant revenue hit after discounts. Investing in a proper eCommerce analytics tool will help you get the best out of discount marketing.
Consider a discount marketing strategy's pros and cons before implementing it. And do realize that discounts are not a “one-size fits” solution for your eCommerce challenges.
Though most of the popular eCommerce stores try out discount marketing at times, you may be able to thrive without discounts at all. It is about identifying the strengths and weaknesses of your business and acting accordingly. Leave us a comment to share your views.
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