How To Use Discounts And Promotions To Boost Sales In Your Ecommerce Store
Do you know how powerful discounts and promos are for boosting ecommerce sales? According to this study, 59% of shoppers search for promo codes before buying. And up to 54% of online shoppers will purchase items in their abandoned cart when they get a discount. What does this mean for your dropshipping business? It means that a successful discount program is a great way to increase your sales and attract new customers to your ecommerce store. So here’s an easy, step-by-step guide how to do it. Creating a new Shopify store? Debutify is the highest-converting free theme. Build a thriving dropshipping business and save thousands of dollars a year. Click here to learn more. Establish A Clear Goal Before you create a discount code, ask yourself the following questions to find out exactly what you want to achieve:
Are you trying to boost sales of a particular product, or sales in general? Are you trying to get more out of one customer immediately, or to turn them into a frequent customer?
Are you trying to use existing customers to bring in others?
Are you trying to draw customers to another service, event or activation? There are also other factors to consider such as your bottom line, promotion length, etc. But once you’ve narrowed it down to a particular goal, you can then move on the next stage: Do The Back-End Mathematics Before launching a discount, you need to thoroughly understand how well it has to perform for it to make business sense. This requires knowing:
Units sold without the discount
Original price of the product
Discounted price of the product
Cost of production (how much goes into sourcing/creating and making the product available for sale) Required additional sales (how many more units you have to sell to break even) You should also keep in mind that discounts and promotions come with new costs of their own, such as advertising to get the word out. Therefore, it’s not enough to simply compare how many units you sold with the discount to how many you sold without it. If you are not very good with business mathematics, get help from an accountant at this stage. This will not only help you to set the right targets, it will also help you know where you are falling short, and what you need to do to perform better. Select A Suitable Type Of Discount
Discounts come in different forms, so it’s important to pick the one which is most likely to help you achieve your goal. These include:
Discounts as percentages of the product price
Discounts on additional services, such as free delivery and installation
Payment method discounts such as when using cash or loyalty points
Combo deals, for instance, a discount on buying a variety of products, or getting complementary products, like free cleaning brushes along with a carpet or free cartridges when you buy a printer
Deferred discounts, which are activated on your next purchase
Discounts earned through support actions such as referrals and social media sharing Once you’ve picked a particular type, it’s time to set discount rules. Set Discount Eligibility Requirements This is a very important step to take because the last thing you want is potential customers misunderstanding your discount offer. Some key things you should consider include:
How many units of a product will the shopper have to buy to get the discount? A buy-twoget-one-free scheme works great since most people easily understand it.
For how long will the discount last? A good promo should run for anywhere from one week to a month – the longer, the more customers it attracts by word of mouth.
How many referrals will someone need to get the discount? This should be a number (3 – 5) that is realistic enough to motivate your customers to try achieving it. Start Marketing Your Discount
Every discount or promotion should be treated like a product/service. Just because it has great benefits to offer doesn’t mean everyone will get to know about it on their own. Once you have structured your discount, you need to come up with a plan on how to market it. If the offer is aimed at rewarding loyal, existing customers then you should mostly advertise it on the store’s site itself. If the offer is meant to attract new, first-time customers then you should focus on getting the message beyond your website. Here, think email marketing and social media. Track And Analyze Your Discounts And Promotions Once your promotion is up and running, you need to put in place criteria that help you measure how your offer is performing. Find out how many shoppers are pursuing the discount, when they are doing so, which products are getting the most sales via discounts, etc. There are various methods and additional tools you can use to handle this. Shopify provides some basic analysis tools within the administrative panels that can help with this task. For example, in the Overview dashboard you can:
check the value of your recent sales
compare the performance of your sales channels are performing
track where your visitors are coming from
Are Discounts And Promotions Worth It? Whether you haven’t started or are already in the midst of running a discount or promotion on your ecommerce store, it is important to know the pros and cons of these offers. On the upside:
They are easy and cheap to activate and analyze.
They attract new customers and encourage existing ones to buy more.
They help in meeting sales targets quickly and learning customer behavior in depth.
They are great for growing social media followings and building email lists. On the downside:
They eat into your profit margin, with the revenue foregone and cost of advertising.
They can make your customers focus more on bargains than the value you offer. Make sure your plan checks the points above. But there could be a few other quirks too – for example you could easily run out of stock, or get complaints from misunderstandings about your discount. Prepare for these ahead! Start Implementing Discounts In Your Store Today Discounts and promotions are one of the easiest ways to increase sales in your Shopify store. Debutify can help you get even more out of them, with special conversion-boosting add-ons. Click here to learn more about Debutify, and increase your sales overnight.