Doing it Right: Special Offers to Promote your Online Shop
Discounts, deals and special offers – as every online retailer knows, these can be some of the most powerful tools in securing those all important conversions. The decisions that you will often be faced with, however, are when to offer discounts, and how much should said discounts be worth.
There is of course no point in offering endless discounts to the point where it becomes unprofitable. Such a strategy in any case can do unlimited damage to your brand – your customers will begin to suspect that your products aren’t really worth the original prices advertised, and you will inherit a reputation for being cheap and possibly sly. You don’t want that. There is a reason why they’re called special offers. They should be just that – special, an exception, an enticing treat to either gain new customers or for your loyal following to enjoy.
Types Of Special Offers
There are a number of ways that you can implement a special offer. Choosing the right one will be your first important decision. So, what are they?
1. Percentage discounts
These are by far the most common types of discount used. Usually implemented as an incentive – 5% or 10% off – they are also used to drive larger sales with bigger reductions of, say, 20% to 25% off. Sometimes a much larger discount will be used to clear a backlog of merchandise that simply isn’t shifting – 50% or even 75% off in some cases.
2. Free Shipping
Lots of people will often abandon their purchases once they realise that they’re to be hit with additional shipping costs. The offering of free shipping is a great way to combat this. Another way to use free shipping is to offer it in conjunction with a minimum order size in order to help increase average order placement.
3. Free Gifts
Free gifts with certain purchases can add real value from the customer’s perspective, increasing order size and even helping you to get rid of products that aren’t moving.
The Risks Of Offering Discounts
If used well, special offers can do no end of good for your revenue, conversion rates and customer loyalty. However, before we start to explore the different methods of using special offers effectively, it’s important to understand the risks involved when embarking upon such a strategy.
Decreased margins
Your margins, of course, will be negatively affected when you offer discounts. Therefore you must consider this loss very carefully. You may have a business model that will allow for the odd 10-25% off special offer, but be sure to use it wisely.
If you have an overstock of a particular product that simply isn’t selling at the original price you’ve advertised, then you may have no option but to knock a bit off the price in order to shift it. But you can’t make a habit of this. You will have come up with a business model that generates a sustainable profit, if you get trapped in a loop of over-ordering from your suppliers and then having to slash prices to move the products you’ll soon see your profits dwindling and your business suffering.
Possible brand damage
As mentioned above, offering too many discounts can actually damage your brand’s reputation. The last thing you want is for your customers to start thinking that they will be paying over the odds for anything that’s not on offer. You must never be haphazard when offering special discounts – you’re selling quality products at good prices; your special offers are there as enticements, treats and rewards only, and should only be implemented when the margins make it possible.
Driving non-loyal shoppers
A lot of people actively hunt online to take advantage of any special offers that they find, often with no intention of revisiting your site should they find an adequate offer to their liking. Ok, you might achieve a few extra sales, but you have to factor in these shoppers when analysing the data produced when your offer ends.
The other thing that you have to be wary of is that by offering special discounts you may well train your once loyal following to wait for them. Indeed, your conversion rates outside of sales periods may decrease dramatically as customers cotton-on to your routines. Strategy is always key, and your special offers should adhere to a strict time limit.
Reduction of average order size
Your special offer may be so tempting that a shopper who might have bought 2 or 3 items ends up just sticking with what you’re offering on discount. This is a hard thing to form a strategy against, and indeed a calculated risk you’ll have to take when advertising a special offer.
Using Special Offers Effectively
So, those are the risks that you should be aware of before going down the path of special offers. They shouldn’t put you off from doing so, however, for a decent market strategy will almost inevitably include special offers, and in fact when used well will increase revenue, loyalty and brand reputation. So, let’s take a look at how to use special offers effectively.
Driving Revenue
The way that you use special offers will of course depend on your type of business. It may actually be the case that you sell lots and lots of mid-range products quite cheaply and enjoy healthy margins. If this is the case then deep discounting and offering weekly, or even daily, discounts might well be the right strategy for hitting your targets. On the other hand, if you’re trying to position yourself as a top-end brand and you enjoy slightly slimmer margins then your strategy for special offers will more than likely be more targeted towards achieving customer loyalty.
Ultimately, it all depends on your business model. The type of offers you advertise will need to match the strategy and message of your brand, and indeed a little trial and error will probably need to take place in the early stages whilst figuring out how best to meet the goals of each of your campaigns.
Weekly, monthly and quarterly offers: These are the most common type of special offer that are generally used to hike up revenues, especially towards the end of the month or quarter to try and meet goals and projections. How you strategize which of your products to put on offer at which intervals will all depend on your margins and business model. The time of year, too, will also affect which products enter into your special offer discounts – winter ranges, for example, will probably need to be reduced as spring approaches (see below).
Seasonal offers: Christmas, New Years, Easter – you’re almost obliged to present a special offer for your customers at these times in the year. But, don’t just stick to these. The whole calendar is littered with special dates, all of which have the potential to be exploited with special offers. If you’re selling seasonal goods, you will of course also want to reduce the price of any backlog of stock as the particular season comes to an end.
Increasing Loyalty
Offers for sharing on social media: One of the most important things for you to do of course is to utilize every avenue for getting your brand’s name out there. A strategic move in doing so is to offer anyone who visits your site a discount coupon for sharing or liking your site on his or her social networks. If you keep the discount relatively minimal – say 5% off – this can actually be a rather effective way of bringing new customers to your site, as well as rewarding an existing one.
Abandon cart offers: These have to be used carefully, for if customers become wise to them they may abuse the offer. So, set a limit of one only. How these work is by programming a ‘We want you back’ email to be sent to all customers who abandon their cart before completing the purchase. The email will contain a code that gives the customer a certain percentage off their order price if they do indeed complete. Investing in an app like Klaviyo can help you do this.
Customer loyalty offers: Rewarding your loyal customers is a great way to cement their commitment to your brand even further. The personal touch is always best in such instances, and sending your best customers a direct email with a credit or discount code will please them no end. Customer loyalty programs can also be set up through the use of apps like LoyaltyLion , and are a great way in any case of tracking exactly who your best customers are and building up demographic and locational profiles of your most valuable customers.
When used strategically, any or all of the above methods for implementing special offers into your online marketing campaigns can vastly increase your chances of meeting your objectives, building your brand strength, driving your revenue and increasing customer loyalty. The trick will always be to have a set goal in mind and use the offers in ways that match your brand. Take heed of the risks involved before setting out, but don’t be put off by them – with a little planning and forethought your special offers can be the most effective drivers of revenue and loyalty in your arsenal.
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