How To Use Discounts Smartly



Sales, promo code, special offers, what are online discount hunters’ favorite terms? Too hard to say no to the discounted deals when they’re presented right there in front of your face.
However, for most e-commerce businesses, it is another story. On the one hand, offering tempting discounts can bring you traffic and revenue boosts, but is the decrease on profit margin really worth it?
In additions, an over-reliance on discounts, in a long term, will attract discount-driven customers who may not really be loyal to your brand. Potentially, it will reduce your traffic and conversions during the time when discount is not offered.
That being said, you can still implement sales tactics while avoid these cons. Before you roll out your next big special offers, read the following three tips and hopefully they will give you some new ideas.
1. Offer discounts to you loyal fans first
As the saying goes – 80% of your ecommerce profits are likely coming from the 20% of your highest spenders. Instead of pursuing deal-hunters, why not retain your most loyal customers who, according to the 80/20 rule, are also the highest-spending fans with special deals?
In the US, 40% of revenue comes from returning or repeat customers, who represent only 8% of all visitors. So, identify your frequent buyers and send out coupon codes to them first.
2. Free shipping under certain conditions
Whether offering free shipping or not, as you may debate, is depend on if you can afford it or not. Free shipping doesn’t work for every e-commerce store especially when you have to absorb 100% of the shipping cost.
In order to offer free shipping without going broke, don’t set it as the default. Instead, set free shipping with minimum order value thresholds. You can also offer free shipping to your most loyal customers as part of your loyalty program. Another affordable way is to offer a fee-based member program, in which you charge customers a fee in exchange for free shipping on some or all items.
3. Don’t discount on your flagship products
You most signature and popular products should never go on sale. In this way, you’ll be able protect the margins for your best goods, while also avoiding damaging your brand reputation. This approach allows you to continue driving significant revenue during the sales season without compromising your entire brand value.

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