Running an e-commerce site is one of the easiest and most lucrative ways to establish your brand out there. However, it’s also one of the most competitive sectors, where global statistics show that there are 12 million e-commerce sites worldwide, giving you some tough competition. An efficient way to stand out and attract more consumers is by offering promotions or discounts. It can help your business by increasing sales, improving your reputation, and helping shoppers.
However, when done wrong, slashing prices and offering promotions can kill your profits or attract the wrong shoppers. That’s why if you want to provide these offers for your store, having a financial planning lawyer is ideal. They will guide you throughout the process and see which deals work best for your business.
However, besides legal assistance, here are other things to consider when offering promotions and discounts.
Segment Customers and Tailor Your Offers to Them
Making discounts or promotions based on your different shoppers’ preferences or purchase histories is a great way to increase conversions and retain customer loyalty. Take the time to organize your customer base so you can create these offers accordingly. You can do this by setting up customer profiles outlining their price sensitivity and shopping habits.
Time It Right
Timing and relevance go hand in hand when it comes to discounts and promotions. Sending out these deals when your customers need them guarantees an increase in conversion rates. That’s why it’s best to pay attention to when customers buy from your store. For example, if you notice more customers order from your shop at the end of the month, then schedule your offers during that period.
Set a Limit
To ensure that you don’t end up losing money with your discounts and promotions, set up a reasonable range of margin for your products. For instance, you can set its limit to 20% for more expensive products while for cheaper items, set it to 5%. Doing this saves your customers some money, increases your reputation, drives more sales, all while saving you money.
Practice Psychological Pricing
The psychological pricing strategy uses techniques to impact customers subconsciously. It integrates sale tactics with product prices. An example of this is if you’re selling a pair of sunglasses for $169, you can incentivize your customers to buy an additional pair with the same value as their choice of eyewear but at a lower price.
Promote Conditional Promos
The difference with conditional promotions with setting limits is that it gives specific limits that customers need to meet before redeeming the offer. For instance, if they buy a certain number of items, they can get 30% off on one of the products, or buy one thing and get one freebie. Doing this encourages customers to purchase more items to get more and save more, driving your sales through the roof.
Test Various Discount Tactics
The right discount and promotional methods vary per seller, their products, and customers. The best way to determine which one is best for you is to implement these tactics for a certain period. Additionally, it’s best to profit-test your offers to make sure you’re not losing money. For instance, if your net profit doesn’t do well on a 20% discount, move it to 15% and so on.
Offering promotions and discounts can be a lucrative way to boost your business or lose money. It will all depend on how you execute the process. Following the strategies mentioned can help you make the most out of it — increasing brand awareness, gaining customers, and improving income flow.