How to Use Discount Pricing Strategies to Increase Your Sales
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We all love a good bargain and your customers are no different. That’s why discounts and strikethrough pricing are so effective in attracting new customers and retaining existing ones.?
But when it comes to slashing prices, how can you offer good discounts without hurting your bottom line?
In this guide, we share discounting tactics and strategies that will help boost your sales.
1. Set your goals
Like any e-commerce strategy, you should start with defining your goals.
Consider what you want to accomplish through these discounting strategies:
It’ll be easier to implement a discount strategy once you’ve set your goals.?
Let's assume the purpose of your discount pricing strategy is to boost client retention. The discount tactics that you use must encourage customers to keep buying from your store. Such a plan may benefit from membership or value-added discount strategies.
2. Discount offers should have an expiration date?
When it comes to discounts and promotional offers, time is just as crucial as relevance. Sending out discounts at the correct time will greatly boost your conversion rates.
This is why you must pay close attention to when customers purchase from you. White Friday and Cyber Monday present two massive promotional opportunities every year. They lead up to December's peak holiday season. You can? build an offer with new products that are only available during the holiday sales. Next, add a countdown timer to attract customers to buy right away.
Image credit: Nykaa
A discount with a ticking clock breaks through the hesitation and forces your customers to act immediately.
A limited-time offer is any type of discount, deal or incentive that a customer can receive if they make a purchase from you within a specific time frame.
Limited-time offers are a wonderful method to attract customers, create a sense of urgency, and increase conversion rates.
3. Nudge new visitors with a special offers?
The ultimate purpose of discounting strategies should be to attract more consumers, who in turn generate more sales.
When a customer visits your website for the first time, they may not be ready to buy. So giving them a discount coupon to buy products instantly isn't always the smartest option.
Instead of asking potential customers to buy right away, invite them to make a smaller commitment, like signing up for your newsletter in exchange for a discount voucher.
Here’s what that might look like:
Image Credit: H&M
Or you could offer them a referral discount. Something like this:?
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Image credit: Benefit
The above strategies give a discount in exchange for completing an action – and the action is generally more beneficial than the discount!
4. Reward customer loyalty
If e-commerce marketers sat around a fire and shared their greatest fears, a poor client retention rate would be one of them.
Getting new customers is far more expensive than retaining old ones. That is why you should recognize and reward client loyalty.
Perhaps you could provide them with a unique birthday discount code. It could also be the date of their first purchase or when they first subscribed to your newsletter.
Image Credit: Topshop
Offering rewards based on your members’ previous purchases is a great way to personalize offers. The value of the rewards depends on the number of points they earn. The more points they get, the bigger the rewards.?
Image credit: Tarte Cosmetics
This can be a wonderful method to strengthen the bond between you and your loyal customers.
Make your customers feel important, and they'll make sure to keep you in business!
5. Be strategic with the marketing?
Let's look at a realistic path to conversion:
After being alerted of a special deal, the user visits the app, browses for a bit, looks at a few products, and then leaves.
A few days later, the user receives one more notification reminding them that the offer is about to expire. The user reopens the app, browses in the hopes of finding a product they'd like to buy in order to take advantage of the promotion. The user adds the product to cart but does not complete the purchase.
The next day, the user comes across an Instagram advertisement for the products they were looking at, as well as an email with the promo code for the products left in their cart. User clicks on the link in the email and completes the purchase.
Therefore it’s not just the value of the deal or the products that matters. But what also matters is how strategically you promote those offers.
Make sure the right people see it by sharing it in your email marketing campaigns, on the front page of your website and app, and relevant social media channels.
Providing discounts and other promotional incentives to your clients isn't a new marketing strategy but it is an effective one.?
And, remember:
Your discount pricing strategy will only be successful if they are tailored to your customers expectations and your company’s overall business goals.
Keep these two factors in mind, and your discount strategies will continue to increase your sales and grow your brand!