Creating promotional offers for your customers is an ideal way to build excitement around your brand and incentivize a sale, especially if the shopper may otherwise be reluctant to hit that “buy” button.
The vast majority of shoppers will gravitate towards special offers when they’re available: 88% of online shoppers said they’d used at least one promotional code in 2020.
Two-thirds of customers have made at least one purchase they wouldn’t have otherwise made because they found a deal on it. And 80% of customers said that they’d be encouraged to purchase a product from a brand they hadn’t tried if they found a good discount.
Promotional discounts and offers help customers feel like they’re getting greater value from their transaction – but if you’re a retailer, it’s important to think carefully about your promotional strategy to make sure that you’re engaging the right audiences with the right offers.
When done well, promotions can be used not only to drive sales, but to encourage retention and drive further engagement.
Here are eight types of promotional discounts you should consider using:
“Sign up for our list” discount
Consider offering a 10% or 20% off promotional coupon when a new customer signs up for your email list or SMS marketing messages. By incentivizing them to sign up, you’ll be able to capture their information and market to them continually on your owned channels, rather than trying to reach them through advertising and social media.
BOGO or BOGOHO discount
“Buy one, get one free” or “buy one, get one half off” are discount types that encourage higher sales volume, and they’re a very popular type of offer. Ninety-three percent of all customers have taken advantage of a BOGO deal, and 66% say it’s their favorite type of discount.
These deals provide merchants with a great opportunity to get rid of excess inventory by drawing attention to the BOGO or BOGOHO offer and getting customers excited about the deal on the product.
Free shipping with a minimum purchase
While some merchants offer free shipping on all products, many only offer free shipping if the customer’s order is over a certain dollar threshold – $50 is a common benchmark.
This has the effect of encouraging customers to add additional items to their shipping cart so that they can qualify for the discount: 58% of customers say that they’ve done this to save on shipping costs.
Flash sales are steep promotional discounts that take place over a limited time window – typically anywhere from a few hours (or while supplies last) to a few days.
Flash sales can be done on a single product, a category, or even storewide, and are typically a significant discount – 25% or higher. Item or category flash sales can be a great way to liquidate excess inventory, especially on seasonal items. A storewide flash sale can be a great way to drive a high volume of sales in a short period of time, incentivize new customers, and re-engage lapsed customers.
When running a flash sale, make sure to use all of your marketing channels to promote the offer, using a timer to show how much time is left on the promotional window. By broadcasting the promotion across email, SMS, in-app, social channels, and digital advertising, you’ll get maximum reach for your offer.
One great strategy for promoting customer retention and lifetime value is to provide loyalty points that can be redeemed for discounts. For instance, for every $100 a customer spends with your brand, they might receive $15 in store credit to be applied towards a future purchase.
Loyalty offers will encourage customers to keep shopping with your brand so that they’ll be able to reach the next tier and redeem their rewards – and chances are, they’ll likely spend more than the value of the reward, helping you capture even more revenue.
Price match guarantee
Many customers like to shop around for the best value on a product, and will buy the cheapest one. Rather than constantly track your competitors’ pricing strategies, why not decide to offer your customers a price-match guarantee?
If they see the same product elsewhere at a lower price, you’ll refund them the difference. This helps them shop with confidence, knowing that your brand will always offer a competitive price on all your products.
Don’t forget about seasonal promotions, when customers are gearing up for sales – some of the most popular seasonal offers to focus on include Labor Day weekend, Back to School shopping, and, of course, the Black Friday – Cyber Monday shopping window, when customers focus on both finding gifts for their friends and families, and finding great deals for themselves on household appliances and other products.
Make sure to give customers plenty of lead time to drive interest in your seasonal discounts, with a limited time window when they can shop with the reduced pricing. Make sure that your ecommerce infrastructure and inventory is prepared to handle the extra volume on BFCM: This is the biggest shopping window of the year, with $6.3 billion spent in 2020.
Finally, don’t forget about promotional opportunities to retain revenue from the post-purchase cycle. When a customer requests a return, you can offer them bonus store credit that they can use towards any item in the store if they choose to exchange rather than seek a refund.
By getting a customer to agree to an exchange, you’ll be able to retain revenue that would have otherwise been lost, and preserve the customer relationship. Often, the customer will spend more than the value of the bonus credit, resulting in even more revenue being added to the transaction.
Want to learn more about using bonus credit to retain revenue and prevent customer churn? Get in touch with Loop for a demo.