You may have heard many times about how using discounts, promotions, and coupons can boost eCommerce sales. But if you think one step further, you might start to have questions about how these can help with our business. Are they really worth it?
Well, the truth is that of course, they can help. However, it also depends on the strategies. Discounts, promotions, and coupons can, on the contrary, do harm to your business if they are used randomly, or if they don’t match with your brand.
What’s more, most eCommerce runners simply think that these strategies are just for seasonal sales and therefore undermine their effects. In fact, promotions, discounts, and coupons can be combined with a bunch of marketing funnels to increase your eCommerce traffic. Let’s take a few for example. They can be integrated into your Google search campaign extensions. They can be part of your email capturing tactics. They can attract more Instagram followers or keep your customer retention.
If you are interested in how to use discounts, promotions, and coupons to increase your eCommerce sales, this post is perfect for you. We will talk about different types of discounts, promotions, and coupons. We will also cover the pros and cons of using them. And we will further provide some useful strategies that could be applied directly in your eCommerce business.
- 4 types of promotions, discounts, and coupons
- The pros and cons of using promotions, discounts, and coupons
- Useful tips for using promotions, discounts, and coupons
4 types of promotions, discounts, and coupons
1.Shipping discounts and promotions
Shipping discounts and promotions don’t mean you need to provide free shipping at all. It is one of the most useful strategies to promote sales and prevent cart abandonment. The promotions or discounts you can choose include
- Free shipping on everything
- Free shipping to different locations
- Tiered shipping rates according to purchases
- Free shipping for a certain level of purchase
- Unified shipping expense with extra charge for faster shipping
- Free shipping for VIP customers
All these have been used in a variety of eCommerce platforms. You can try one or a combination of them to discover how they could work best for your business.
2.Percentage discounts
Percentage discounts are the most common strategy that everyone is familiar with. It means that you offer a percentage off for purchase. Percentage discounts could vary from 5% to 50% and more depending on how much you could give. And it’s obvious that higher percentage discounts will invite more customers to your online stores and trigger more potential purchases.
You can investigate how much percentage of a discount could be a winning strategy at different stages by yourself. For example, use 5% as an introductory discount, or use as much as 50% when you are making liquidation sales.
3.Gifts
Another useful method for sales promotion is to provide gifts along with the products. The advantages of gift promotions lie in three points.
- Offering gifts can solve the problem of extra stock directly.
- For loyal customers, receiving gifts can unconsciously improve their loyalty to your brand.
- Adding gifts to your packaging can be a way to improve your unboxing experience and thus give your customers a better impression of your products.
The effects of offering gifts for customers have been demonstrated and that’s why a lot of online shops are using it to increase their order sizes.
4.Dollar-value discounts
Dollar-value discounts mean that you offer a certain amount off directly for a purchase. Compared with percentage discounts, dollar-value discounts are more effective as it has a higher chance of converting.
For products with high prices, dollar-value discounts are especially helpful. For example, a 30% off and a 300-dollar off discount are exactly the same for a 1000-dollar product. However, most customers will be more interested in purchasing when it is labeled the latter rather than a 30% off.
The pros and cons of using promotions, discounts, and coupons
The major con of using promotions, discounts, and coupons is pretty obvious. Using promotions, discounts, or coupons means that you are actually selling your products at lower prices on average. Thus, your margins and profits will decrease.
The disadvantages could go further if you happen to use them incorrectly. For example, if you just put the same discount on your online store all the time without adapting it, the discount could not only decrease your margins but also devalue your brand and dispel price-driven customers.
However, the pros can exceed the cons if you have a detailed plan of how to use these promotions and discounts. With a proper strategy, the direct effect is that they will get rid of your stock and boost your sales. The indirect advantage that might not be so obvious is that they can increase customer acquisition, keep customer retention, enhance brand loyalty, which could potentially bring you long-lasting customers and sales.
Useful tips for using promotions, discounts, and coupons
If you are choosing one type of those shipping discounts, double-check that your shipping costs and discounts are clear. Unclear shipping costs or inconsistent shopping costs will very likely drive your customers to abandon the purchases. Ensure that the shipping costs are explicit even when you don’t use any shipping discount at all.
Present coupons on your home page. It has been shown that using home page coupons can improve your sales by 33% on average. If your home page is on Instagram or other social media platforms, home page coupons can also increase the number of followers by 25% per month.
Test out what kind of discount are the best by yourself and adapt the strategy at different stages. Apart from the 4 types that are mentioned above, growing eCommerce runners are inventing a bunch of different discounts to attract and keep customers based on their situations. For example, to ensure adequate attention on the products, some online stores provide on-site promotions and coupons for customers.
Conclusion
Using discounts, promotions, and coupons is definitely one of the common strategies to boost sales for eCommerce businesses. As most online shops owners tend to overrate the benefits of using discounts, promotions, and coupons, this article shares a complete guide of using them, including the 4 types, the pros and cons, and 3 useful tips. Even if you have a thorough understanding of discounts, however, the key to extract the maximum profits out of it is to develop your own discounting policy in response to different marketing stages and niches.
