Special offers, coupons, discounts … . Finding the right answer is a headache for online operators as to whether or not to offer a discount, when and how much to offer it.
Offering discounts at your online shop is an effective weapon for increasing customer loyalty. But if you do it unplanned, you can do a lot of damage to your brand and, worse, lost profits.
In this article, we’ll look at the pros and cons of offering discounts and sale prices online, and look at common ways to increase customer loyalty and conversions, and how they work best. I will.
Note: Since this is a long article, all “coupons, discounts, special sales” etc. are referred to as “offers” for the sake of simplicity.
- Advantages/disadvantages of discounts in online shops
- Who are the discounts and coupons suitable for?
- Types of discounts and coupons
- How to increase new sales and customer loyalty with offers
- Make the most of discounts and coupons
Advantages/Disadvantages Of Discounts In Online Shops
Before looking at effective ways to attract new customers and improve customer loyalty, let’s first look at the pros and cons of offers in your online shop.
- Quick and easy to implement in Shopify using default features or apps
- Easy to track with Shopify discount reports
- Improving customer loyalty
- Acquire new customers
- Increased conversions
- A quick movement of inventory
- Achievement of sales target
- Decrease in profit margin
- May damage the brand’s image
- When customers get used to the sale, conversions outside the sale period go down
- More customers aiming for sale prices
- The average order value tends to decrease
- Attract customers outside the target market
Who Are The Discounts And Coupons Suitable For?
As mentioned above, online shop offers are an effective tool not only for acquiring new customers but also for improving customer loyalty. However, you should consider your brand-wide strategy before making a discount offer.
If you want to position yourself as a high-end brand, or if you have a low-margin business, consider offering customer loyalty instead of weekly sales. On the other hand, if you have a healthy rate of return, you may be able to reach your goal with a big discount or daily / weekly sale.
Ultimately, you should consider whether you need an offer in the first place and what offer is right for your brand. In an online business, a lot of experimentation is generally required to figure out the most effective method. The best approach is to set goals for each campaign or offer, start small and measure the results.
Types Of Discounts And Coupons
There are different types of offers you can take advantage of. Let’s look at some common ones.
- Discount by percentage
- Amount-based discount
- free shipping
- Free gift
Each of these offers can be implemented in Shopify in two different ways.
- Automatic discount
- Discount code
Discount By Percentage
The most common practice is percentage-based discounts. There are small incentives such as 5% and 10%, cases such as 20% and 25% that contribute significantly to sales, and discounts of over 50% to wipe out old and stuck items. A case is possible. You can apply these discounts to multiple collections, products, locations within Shopify, or even qualify for specific purchases, such as ” 50% off sweaters for those who buy two pairs of sneakers .”
Amount-based offers can be treated as credits. Therefore, it gives people the feeling that they are losing money if they do not use this discount. ” 20,000 yen or more purchase, 2,000 yen discount” When combined with the minimum purchase amount as in, you can enhance the impact.
If you’re wondering whether it’s a percentage or monetary, we recommend applying the ” 10,000 yen rule”. For example, if the item is less than JPY 10,000, we will apply a percentage discount, and if it is JPY 10,000 or more, we will give you a fixed amount discount. This is a psychological trigger that gives customers the highest value for their offers.
Of the biggest causes that leads to the car dropping 1 single, but the postage is. Offering free shipping is the best way to reduce basket drops and increase conversions.
Offer free shipping in combination with the minimum purchase amount to increase your average order amount. Shopify can manage this as a “delivery setting”. Combine free shipping with seasonal promotions ( such as a 20% discount for email subscribers ) to further enhance the value of your offer.
Free gifts are a great way to add value to your customers. Strategic implementation can help increase average order value and clear inventory. You can set conditions for minimum purchases and quantities in Shopify. You can use it as a free gift for those who purchase 20,000 yen or more or 5 or more items at a time.
Discounts are automatically applied to eligible carts and customers can check them on the cart page before proceeding to the checkout process. It’s a great way to promote your entire store for a product, category, or all products without having to enter a discount code.
By omitting the code, you can facilitate the ordering process and checkout process. 2019 of year 9 Taking May as an example, the discount is advanced in the check-out process in a state in which it is automatically applied to Shopify users, compared with people without the discount 1.8 high completes rate times the purchase, discount code use Checkout is completed 25 seconds earlier than.
Also, if the discount has already been applied to your cart, you don’t have to leave the cart to find the discount code (or send you an email asking you to resend the code). This can result in a smooth customer experience and high conversion rates.
The discount code is the code that the customer enters at checkout to apply for the offer. This is a proven way to accurately deliver offers to all email subscribers or to specific segment groups or repeat customers.
Discount codes also help you track your marketing efforts. If you run multiple campaigns, you can easily see the relative impact on your sales by assigning different discount codes to each.
How To Increase New Sales And Customer Loyalty With Offers
There are countless offers that can be used to drive customer loyalty, new customers, and conversions.
- Weekly / Monthly Discount
- Early Discount Offer
- Holiday/season sale
- Countermeasures against dropping baskets
- E-mail magazine subscriber sale
- Incentives to encourage SNS sharing such as likes and follow-ups
- Referral promotion
- The first-time purchaser only
- Conditional discount on minimum usage
- SNS limited special sale
- Royal Customer Sale
- Exit intent measures
- Retargeting promotion
- Influencer (Blogger, Celebrity, etc. ) Offer
- Customer Loyalty Program, Membership Incentives
- Online purchase discount
- Face-to-face sales coupon
- Event attendee discount
- Milestone discount
Let’s take a look at some common methods with examples.
1 Weekly / Monthly Discount
This is the traditional sales method used to promote conversions. These sales are often held at the end of the month or quarterly to increase revenue and reach business goals.
Example: The Walgreens online photo page has a weekly sale coupon with the ongoing promo code at the bottom of the page.
2 Early Discount Offer
If your business is still in the pre-launch stage, or if you have a new product launched, you can intrigue, increase traffic, and turn new customers into loyal customers with early discount offers.
Example: The Jewelry Wardrobe has taken this approach successfully. We offered a $ 25 gift card for free in exchange for an email address and a quick survey response. We are kicking off this initiative by manually reaching respondents through LinkedIn.
3 Holiday / Season Sale
Black Friday, Cyber Monday and the holiday season at the end of the year are among the biggest, but there are many other holidays and anniversaries that could trigger related sales and offers throughout the year.
Example: Blu Skin Care regularly uses holidays as an opportunity to market offers to visitors and past customers. They promote in a variety of ways, including email, social media, markets, and websites.
4 Countermeasures Against Dropping Baskets
Nearly 70 % of people have abandoned their carts, so we can see that the basket drop notification email is a powerful tactic to get people back to shopping. Shopify comes pre-loaded with the ability to recover from a basket drop with normal settings. If you need more customization or analysis, check out the app called Klaviyo.
Example: Brandless, an online grocery brand that does not sell branded merchandise, sends a $ 1 shipping offer to cart abandoners as a cart abandonment notification email. This serves as a reminder and incentive for first-time buyers to complete their purchases.
5 E-mail Magazine Subscriber Sale
Building an email list is very important for online businesses. You can increase your chances of conversion by making some kind of offer in exchange for your email address. Receiving their emails also gives you the opportunity to build relationships, foster customer loyalty, and promote in the future.
Example: Online retailer Overstock.com offers 15% off coupons for e-mail magazine registrants.
6 Incentives To Encourage SNS Sharing Such As Likes And Follow-Ups
The most difficult thing in running a new online shop is to spread word of mouth. Providing visitors and customers with incentives to share your store on social media is a cheap and effective way to get word-of-mouth and referrals.
Example: Truxx offers visitors a $ 5 off discount on their next purchase, provided they share their brand and experience on Facebook.
7 Referral Promotion
People are more likely to make a purchase when recommended by a friend or family member. Take advantage of this and use offers that facilitate referrals. Benefits can be offered to referrals, referrals, or both.
Example: Meal delivery brands such as Blue Apron and Hello Fresh are known for referral marketing. Users will be given a promo code to introduce the service to friends and family. Referrals can purchase the first box for free or at a significant discount. A friend who purchased a product 1 per person, introducer will be able to get a box of the free or discounted price.
8 First Time Purchasers Only
Offering an offer to a first-time buyer may be a push to becoming a customer.
Example: Clearly offers new visitors a 50 % discount on eyeglass purchases, a 15 % discount on contact lens purchases, and free shipping.
DODOcase, which makes iPad cases and sells them online, offers a 10% discount on the first purchase.
9 Conditional Discount On Minimum Usage
Offers based on the total amount in your shopping cart are an effective up selling tactic to encourage more purchases and increase your average order amount. The way to incorporate this strategy into your online shop is to calculate the average order value for the past few months and offer discounts or free shipping on all orders from 10 % to over 20 % of the average order value.
You can also apply a minimum purchase discount for specific collections and products. If you have a collection that you want to pay particular attention to, try adding a minimum purchase discount to give your audience an incentive.
Example: Popular online retailer Nasty Gal gets free shipping on purchases over $ 100.
10 SNS limited Special Sale
Social media-only offers are a great way to make people who follow you a royal customer. In addition, this tactic is a good reason to increase new followers and new subscribers on your social network and will be useful for future marketing.
Example: Maple Holistic, which sells natural skincare online, offers social media-specific offers. The example below offers Twitter followers a 15 % off code that can be used to place orders on Amazon.
11 Royal Customer Sale
By granting benefits to customer loyalty, you can develop even stronger bonds. Another aspect is that discounts can only be offered to those who have already purchased. Shopify makes it easy to issue discount codes that only apply to specific customer groups.
Another easy way is to send a personal email with discounts and credits to your customers or use a marketing app such as Klaviyo to automatically send an email to someone who has made a specified quantity of purchases, for example. Or you can use Loyalty Lion to run your customer loyalty program.
Example: Behind the success of the outdoor shop REI is a collaborative membership program. Members will also receive 10% of the list price purchase in the form of dividends and will also have access to exclusive sales. REI also frequently rewards member purchases. The following example is a benefit that gives you a $ 20 gift card for purchases of $ 100 or more.
12 Exit Intent Measures
All you need to do to turn a visitor into a buyer is an offer at the last moment they are leaving the site. The Exit Intent offer is a screen that pops up the moment a visitor tries to leave the site or close a tab, showing the final offer to get a purchase.
Example: Auto Accessories Garage is displaying an offer in an exit-intent popup. They offer a percentage-based discount in exchange for entering an email address. Then, when the user abandons the cart, they will receive an email strongly recommending the purchase with a larger discount.
13 Retargeting Promotion
Retargeting offers are effective because they are only visible to people who have visited your site. So the other person already knows you, the ad acts as a reminder to return to the shop, and the offer is a push to buy.
Example: Let’s take DODOcase as an example again. They effectively use multiple offers to turn visitors into buyers throughout the purchase cycle. In this example, DODOcase is Facebook and Google to expand the retargeting ads in the ad, used at the time of purchase of 20% to induce visitors to provide a discount on their site.
14 Influencer (Blogger, Celebrity, etc. ) Offer
Partnering with a large audience and influential people is a great way to increase your brand exposure opportunities. And by making a limited offer to that influencer’s network, you’re more likely to turn your fans into your customers.
Example: BarkBox is a subscription service for dogs and their owners. They often collaborate with celebrity influencers to increase brand awareness and sales. To facilitate conversions after viewing social media posts, BarkBox provides influencers with unique codes that can be shared with a specific audience.
This unique code allows BarkBox to track the user’s code usage so they can see which influencers have worked best and use them in future campaigns.
15 Customer Loyalty Program, Membership Incentives
Rewarding your participation in a customer loyalty program with a perk is the best time to share your bonus incentives. Not only will it increase your engagement with your brand, but it will also increase your motivation to participate in the program from the beginning.
If you haven’t started a customer loyalty program yet, you may want to consider this. According to a Forrester report, those participating in the loyalty program spend $ 42.33 more in three months.
Example: Big Lots offers users participating in the Big Rewards loyalty program a $ 5 off discount on their next purchase. It can be used both online and in stores.
16 Online Purchase Discount
If you want to increase your online sales, consider an incentive to buy online. Whether you want to have an e-commerce site to reinforce your physical store or build a customer base outside of Amazon, you can increase your online conversions by offering rewards.
Example: Dick’S Sporting Goods is, ” received at the store to buy on the net has been promoted in the home page” with special offers. Their goal is to get users to convert (purchase) online and receive the goods in-store. This strategy provides online shoppers with the opportunity to experience face-to-face services and enables cross-selling promotions while visiting the store.
17 Face-To-Face Sales Coupon
Just as an offer can increase your online sales, you can increase your face-to-face sales. If you have a physical store, this is possible at the physical store or at face-to-face events such as festivals, trade fairs, expos, and exhibitions.
Example: Bed Bath & Beyond is known for sending discount coupons for store purchases. Often, even expired ones will be available.
18 Event Attendee Discount
Whether face-to-face or virtual, if you have an event, you can offer attendees discounts and free gifts as a perk. These perks are given during or after the event to foster relationships with highly engaged customers and improve customer loyalty. In addition, it has the effect of encouraging participation in the next event.
Example: Let’s take the example of a retail store. The prAna Boulder store offers free yoga classes almost every day. At the end of the class, students can enjoy 25 % off shopping at the store on the second floor. If you want to grow your online sales, it’s easy because you just need to give your yoga class students a promo code that you can use to buy online.
19 Milestone Discount
Milestones are especially important if you have a customer loyalty program in place. This may be personal to you, such as a birthday or anniversary. There are also milestones that celebrate the relationships we have built with each other. You can mark the day you first make a purchase or participate in a loyalty program as an anniversary, or milestone various engagement factors with your brand, such as a fixed purchase amount or number of purchases.
Example: Big Lots offers special discounts and free gifts for your birthday. By teaching these benefits even before you join the customer loyalty program, you can encourage users to join the program.
Make The Most Of Discounts And Coupons
Offers such as discounts are not suitable for all online businesses. With clear goals in mind, get a solid understanding of your brand, and remember to start with an experimental spirit. That way, you can effectively leverage your offers to reach your goals, foster customer loyalty, and generate revenue.
Let us know in the comments section below what offers are best for your online shop in terms of increasing sales and customer loyalty!