According to The Economist, products can be sold 73% more in quantity if there is a discount included, Having a discount strategy can be a powerful weapon in driving sales and customer loyalty. However, used aggressively, it can cause significant damage to your store, or worse, be unprofitable. In this article today, we will discuss some effective discount methods that merchants can use to attract customers to their stores.
Reward Attractive Discounts To New And Loyal Customers
Getting a shopper to stop by your website and converting those visitors into buying customers is hard unless you have a strong strategy that commands actions. One way to grab the consumer’s attention is to provide them with discounts or promotions in the form of popups messages on your website.
When a new customer visits your site, there should be a popup banner offering them first order discount percentage or free shipping, which encourages them to move further with their shopping journey and check out your products.
If your store provides services such as streaming, training, or online courses, a free 1-month or 2-week trial is highly recommended in your discount strategy. After buyers agree to try out your services, lead them to your subscription plan page where percentage discounts are applied if they purchase a 6-month or yearly subscription. These two levels of discount would give customers a sense of having a bargain when shopping at your site. However, merchants should calculate carefully so that offering your products and services at a lower price can still bring you profits.
Acquiring a new customer can cost five times more than keeping a loyal one. Therefore, retailers must not forget their existing customers in the discount strategy. Percentage discounts, free samples of the new products, or free shipping should be rewarded when shoppers reach a certain amount in their purchase or gain enough points in their membership account. The discount should be generous so that the loyal customers have the feeling of being appreciated. Then, there would be a high chance that they will recommend your brand to their friends and family.
Starbucks has been conducting a great discount strategy for its loyal customers. When earning a certain amount of points, Starbucks will give buyers several free drinks that will expire after a specific date. The more points you get, the more free drinks you will receive.
Especially, merchants should not let only the loyal customers know about the discounts and incentives. Instead, they should publicize this information on the website, the front page is recommended. In this way, visitors or existing customers can acknowledge how beneficial it is to be loyal to your brand.
Have Expiration Date For The Discount
The expiration date is an important factor in your discount strategy. In this modern world, advertisement is everywhere. Customers are overwhelmed by information about brands, products, or promotions. Hence, giving your shoppers promotions codes is not enough as they can forget it quickly after leaving your store. It is highly recommended for merchants to set up expiration dates as this will create a sense of urgency customers cannot resist.
For example, let’s do a little comparison. An online training website tells their learners to subscribe by tonight to get 30% off their 6-month plan would be much urgent than a similar platform with the same percentage discount but have no limit or expiration date for their discount.
Important thing retailers should remember is that expiration should be used carefully and considerately. It should only be included where the value of the purchase is high or the subscription plan is long (6 months, one year, or a lifetime). If a call to immediate action is presented everywhere on your site, it will give a sense of scamming for your store, which is not beneficial at all to your business.
Offer Discount On Product Customers Cannot Afford
Retailers should understand that consumers cannot afford everything they want to buy. Therefore, they will wait for sales events on products that are relatively expensive.
Amazon is a typical example of this method of discount strategy. As a tradition, Amazon offers deep discounts on their Kindles and Echoes on Amazon’s Prime Day in July every year. These products are the signature of Amazon for years and are loved by tech-users all around the world.
However, it is obvious that not every book lover can afford this. Therefore, Amazon purposely comes up with this Prime Day for their shoppers to purchase. Not only selling their Kindles and Echoes at a cheaper price, but Amazon can also gain a reputation as a customer-oriented brand where they care about the underprivileged buyers. As a result, in the 2020 Prime Day, Amazon grossed about $7 billion, according to CNBC.
Partner With Famous Brands To Give Discount
Not only lowering the price, but this discount strategy also adds value to your product. The discount can come in the form of a percentage discount, vouchers, coupons, subscription plans. An example of this is T-Mobile, a giant telecommunications company in the U.S that is famous for its 5G network. When subscribers buy a one-year plan or more, T-Mobile will offer percentage discounts along with a free Netflix account in the same time period.
Another partnership that has been made for discount strategy is Flipboard and Airbnb. When signing up for Flipboard membership, depending on the plan you choose, the website will reward you with promotion codes or free nights at Airbnb stays around the world.
Retailers should partner with brands that sell products in the same categories. The collaboration should not conflict with each other. A sports gear company should partner with a sportswear or supplement brand, not a fast-food chain.
Through this article, we have listed out some great methods to be included in your discount strategy. With these promotions, businesses can easily attract new customers and take good care of their loyal customers at the same time. However, depending on your products and services, retailers should make a wise decision on which method to use in order to bring the best result. Please feel free to contact us if you have any further questions.