One of the most common and effective strategies that you notice in eCommerce business is discount marketing. 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 long term, or to reward them for being loyal to your brand.
Discounts have become an essential aspect in 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 are going to execute it. Are you going to offer discount on your entire catalog, or are you limiting it only to a select set of products? You may have to do some homework with your sales patterns and customer interests before setting out. Understand some of the basic strategies to set up discounts before executing a strategy.
Fundamentally, how you can implement a discount also varies according to the way you apply it. There are percentage discounts, fixed rate discounts, as well as directly setting up a reduced price for the product.
Basically, you can apply these discount types along with some other interesting strategies. Here are some of the popular discount strategies that 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, for more advanced options, you may need a Dynamic Pricing and Discounts plugin. You will find several popular dynamic pricing plugins in the WooCommerce ecosystem.
The advantage of using one of these plugins is that you will be able to set up a discount accurately based on the strategy that you choose. 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 are offering discounts quite often on your site, you may be telling the customers indirectly to wait for the next offer. This can lead to a 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, the perception of customers is crucial to the success of a discount strategy. However, you can apply certain strategies to create a sense of urgency in the minds of customers, which can actually balance out the negative perception. For example, if you are providing an offer only for a limited period, customers will be more inspired to avail the discount while it is still on.
Similarly, you always need to communicate why there is a discount on your store to avoid negative perception. It can be the store anniversary sale, or a holiday sale so that customers will identify a reason behind the discount, and they will realize it will change soon.
Another strategy a lot of store owners try out is to strike off the original price and then display the discounted price. This will also help the customers to get a clear idea on how much they are saving. 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 on 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 to offer some on 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 the minds of customers without really 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 project the strengths of your business such as dependable customer support, product longevity, quicker delivery times, etc. For example, a dependable live chat software can help you optimize conversions as well as improve customer service.
Fundamentally, the point is if you are offering discounts on your store, it should be because it gives you desired outcomes of business growth. 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 on your store, it is important to set up clear terms and conditions for it. One of the basic aspects to look in here is to be transparent. Your customers should not be confused regarding the applicable conditions regarding 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 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
There might be several goals for you to set up a discount offer on your store as discussed above. However, one very effective outcome of discount marketing is that it can help you reduce cart abandonment.
As you know, there is a lot of potential in abandoned carts to increase your store revenue. That is because in that scenario a customer has come so close to completing a purchase before leaving the cart.
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.
Compared to other scenarios, abandoned cart retrieval is where you can more effectively make use of your discount marketing strategies.
8. Analyze thoroughly
Thorough analysis is one of the essential aspects of eCommerce that helps a lot of entrepreneurs thrive. You need to particularly focus on your analytics data when you are trying out a discount marketing campaign. A/B testing will help you choose one idea over the other when you have multiple options.
Sometimes, by changing the way you promote a discount offer can make it more effective. At other times, the way you are applying the discount during the checkout can change the outcome of the campaign. 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 the pros and cons of a discount marketing strategy well before implementing it. And do realize that discounts are not a “one-size fits all” 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.
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.