As an online merchant, you need to know the proper time, worth and target in case of making offers. Knowing the most effective way to use it is a must.
The Most Popular Offers in Sales Promotions
Before exposing you to the ways of utilizing offers to increase your sales, let us explain a few of the most familiar types of offers.
Percentage-based discount surely is the most popular way to offer discounts. The number of percentage you choose depend on your interest to drive sales.
For example, if you want to play it safe and easy, include smaller incentive percentages like 5% or 10% off. Other than that, if you want the old merchandise to keep moving, discounts larger than 25% would be the right idea.
2. Free shipping and free gift
Shipping costs can be a reason for abandoned shopping cart. Offering free shipping is a smart way to cut it and increase conversions. You can even combine free shipping offer with other promotions to increase the value of your offer.
To provide additional value to customers, there is also free gift offer. It can be used as a solution to increase average order size and/or to get rid of product that isn’t moving.
Pluses and Minuses
Offers such coupons, deals and discounts are like a double-edged sword. Let me elaborate on this. The beneficial impacts of offers is so hard to resist. It can effectively increase customer loyalty, customer acquisition and even meet sales goals.
But on the other side, the negative impacts of that is no less threatening. It can decreased profitability, attract price-driven shoppers or even worse, it has the potential to deliver brand damage.
Purpose of Making Offers
The purpose of making offers are mainly to drive customer loyalty, acquisition and conversions.
1. Customer Loyalty
Customer loyalty is the outcome of satisfaction and positive experience a customer receives from doing a business. Offers that can be used to drive customer loyalty includes pre-launch offers, exclusive social offers and customer loyalty offers.
Customer acquisition is the process of bringing new customers or clients to your business. In order to do that you have to create acquisition strategy that can adapt with the new trends. Offers that might be useful to drive customer acquisition are subscription offers, referral promos and first time shopper offer.
A conversion occurs when a customer completes a desired goal, such as filling out a form or making a purchase. Recommended offers to drive conversions are holiday and seasonal deals, weekly/monthly discounts and abandoned cart offers.
Blueprint is important before you take any actions. To use offers as the right ammunition, you need to have strategy. For example, you need to know your brand situation. If you are in a position as premium brand, you might want to consider offers based on customer loyalty. But if you have a good margin business, daily or weekly sales might be preferable.
Offers are not always a proper choice for online business. Find the best path to build your online business. It may need a lot of trials and errors until you finally figure out what works best.