Reasons for creating discounts
There are many reasons to do discounts and promotions. Sometimes they’re obvious ones like wanting to get rid of stock that’s been sitting for a while or looking for a spike on sales. Other times the cause might be a bit less obvious to the consumer. Here are some reasons to do a promotion or discount on your online store:
- To create a spike on sales
- To clear Stock
- To call attention on a particular product
- To call attention on a particular action (opening a new shop, for example)
- To expand your contacts list (by asking for an email in exchange of a coupon, for example)
- To get more followers on social media (exchange of “follows” and “likes” for discounts)
- To generate word-to-mouth buzz
The pros and cons
- Customer satisfaction
- Client loyalty
- Increase of leads and conversions
- Attraction of new customers
- Simplicity (it is easy to set up and track)
- Customers may get used to buying “on sale” instead of full price
- Attraction of bargain-looking customers (not loyal)
- Losing brand value
- Reduction of profit margin
- When is the right time?
Optimal time to Launch Discounts
Holidays: Mother’s day, father’s day, Halloween, Christmas, are all great moments to do promotions.
Special Launch: When you’re about to launch a new product, shop or service
End of season: Special sale when the summer and winter seasons are ending.
When a customer is about to leave: Because it makes the customer think twice.
Types of Discounts
Buy two and get the third one for free! Who hasn’t heard that one before? There are almost endless types of promotions, we’re just going to list some of the most effective for online commerce here.
- Percentage discounts
- Free-delivery after a certain amount of money is spent
- Special gift when a purchase is made
- Special discount for social media followers
- Referral promotion (give a discount to anyone who recommends your business to a friend)