There’s a popular myth making the rounds around the web, claiming that to start a business you need a really good product. Despite its popularity, this statement is only partly true. An excellent product is just one part of the equation. The other includes wrapping it with an offer your clients cannot refuse.
It’s difficult to survive on the web without offers, coupons, discounts and deals. But how to use them without compromising the long-term health of your business?
Learning how and when to use offers is critical. Not every successful online store has the best products. However, all of them know how to offer the best value deals to their clients.
Good offers and discounts can either enrich or harm a business. If done properly, it can increase your revenue and drive customer loyalty. If done carelessly it can damage your brand and reduce profits.
In this post, we’ll explore different ways how to drive revenue and customer loyalty with sales promotion examples.
Should you discount your products?
Offers, bargains and value deals sound exciting, but before jumping in, there are several things to consider. Like every great tool, offers bring their own advantages and disadvantages for your business. Let’s examine both sides of the coin.
- Discounts help to acquire new customers.
- Good offers encourage brand switching.
- It increases sales volume and order size.
- Offers add extra value to the product.
- It provokes customer retention and loyalty.
- Overall, it makes customers happy.
- Best deals attract non-loyal customers aka discount hunters.
- Discounts decrease revenue per conversion.
- Customers tend to grow accustomed to sales offers and start to buy less during the non-sale periods.
- It can damage the perceived value of a brand.
- Special offers can have an adverse impact on your order size.
- It’s not a sustainable long-term strategy.
Whether to apply discounts for your digital products depends on your overall situation and goals. If your brand sells high-end items or you’ve already met the sales quotas, price cuts can do more damage than help. However, if you’re just starting out and need to penetrate the market, smart use of discounts is almost mandatory and may provide you the much-needed boost to kickstart the business.
As you know by now, there is no single formula for success in e-commerce. Entrepreneurs and e-commerce owners need to master many digital skills in order to succeed. Top sellers always experiment and try many different things before figuring out what works best. That said, there are many options you can start with.
Types of offers
The most common types of offers are coupon codes, limited time offers and free gifts (freebies).
Coupon code is one of the oldest tricks in the book. It is simple, yet one of the most effective sales strategies. Every year around 3 billion coupons are redeemed in the United States alone. Sellers love coupons because of their flexibility: they can be offered for particular users, audience segments and for certain time periods.
Limited time offers is another proven way to nudge the clients and stimulate them to shop before the time expires. Sometimes it’s also called a flash sale due to its nature – the time limit and limited availability tempt customers to buy on the spot.
Free gifts are added value items that customer gets if he completes the purchase. Being emotional creatures, people love free offers way more than the discounts. Freebies can be used in numerous ways, such as initiate or foster relationship with the client.
Let’s explore the ways how you can implement these offers in your sales plan.
Weekly or monthly offer is a useful tool whenever you need a sales boost. The best time to use it is when you’re in a sales slump.
For instance, if your customers aren’t buying during the weekends, organize a discount weekend. If you get lots of impressions but no catches on Mondays, make it a discount Monday. If most of your audience get their salaries on the last day of the month, use it to your advantage.
The point of making good weekly or monthly offers is to observe and figure out the best time to give your clients that little push they need.
Example: Digital services like Getflix occasionally make weekend sales because their users like to binge-watch on the weekends.
If your awesome product is not ready yet, a common strategy is to make a pre-launch offer. It will make your early birds happy. Early adopters interest in a product is a good indicator of forthcoming success. Therefore, you can hype people up by providing them an early bird discount.
Some creators call initial crowd as “founders” or founding members of the product. They are your biggest fans who are there with you from the very beginning, so strengthening their loyalty with an opening win-win offer is a smart move.
Example: Kylebrush.com makes a pre-launch offer for his Photoshop brushes.
Since the old days of trade, sellers knew that people are more likely to purchase when they are in a good mood. Therefore, prepare some special offers for the holiday seasons. Christmas, Valentine’s Day, Halloween, Easter or back to the school seasons are the periods when good sellers excel.
Example: Almost every product gets a discount for a Christmas break. WordPress themes are no exception.
Abandoned cart offer
A study by Baymard Institute has found that almost 70% of the time users leave in the middle of the purchase process. This happens for many reasons of course, but the important takeaway is that it doesn’t mean the end of a game. If you follow up with an abandoned cart offer, there’s a sound 29% chance that you will still make a sale. It’s an effective way to deal with unfinished business by sending your customers a personalized and exclusive offer on the goods they want.
Example: This email from Ugmonk. Although it doesn’t include a discount, it showcases how to write a friendly and personal abandoned cart offer. Adding 10% discount would increase the chance of conversion even more.
Email newsletter offer (subscribe to get % off)
Building an email list a critical element for your sales success. Numerous marketers admit that it is still the best way to reach out to customers.
According to Sumo.com blog, 100 site visitors can generate you from one to five email opt-ins on average, depending on the quality of your campaign. However, you can lift that number up if you add a discount to it. People like doing things that create value for them, so signing up for your newsletter to get a bargain is only reasonable.
Moreover, research shows that average email conversion rate is 3.19%, meaning that you are likely to keep getting purchases from your email offers, especially if you have a genuine and interested contact list.
Example: The Next Web Deals offers you a 10% discount if you opt-in to their mailing list.
Minimum purchase discount
Creating a minimum purchase discount is an effective way to offer customers extra value by encouraging them to spend more. For example, if you are a writer and customers are buying your new e-book, you can offer a $10 discount on the whole cart if they also buy one of your older ebooks. Minimum purchase discount is applicable for specific collections, bundles, categories of items, quantities or order sums.
Exclusive social offer
Your loyal social media followers will be happy to receive an exclusive discount made just for them. Make a contest, giveaway, or just post a promo code with a link to your store. Also, it can boost the growth of your social media channels.
Exit intent offer
Seconds before the customer leaves, you can still recapture his or her interest by providing last-second chance to get a discount for your goods. Make an exit-intent pop-up window to retain leaving visitors and lead them to the conversion. Even if the client is not interested in buying at the moment, you can use this opportunity to establish a relationship.
Example: When you’re about to leave The Next Web Deals store, most of the time you’ll get a window offering a 10% discount for signing up to their newsletter.
Retargeting is one of the most effective sales strategies because it targets visitors who are already familiar with you. Retargeting ads serve as a reminder to come back and finalize the deal. Most importantly, you already know what your customer wants, so giving a little soft push may be that small last thing needed for the conversion.
Example: Most of the ads you see on Facebook or Instagram are the result of businesses and services retargeting you.
Offers and discounts will boost your revenue and customer loyalty. However, you shouldn’t just throw discounts and offers all over the place. Know your brand, goals, clients and most importantly the value of your product. Analyze your customer behavior and come up with a winning plan. At the end of the day, it’s your work that’s being sold.
Business is more about making win-win offers, not lose-wins, so giving up too much for a short-term success may jeopardize your store in the future. Do discounts in a smart way and make them count.