Discounts and promotions are a tool that is often used to promote e-commerce products.

In the short term, offering a discount may seem like a good strategy to increase sales, but the risk of devaluing and destroying the brand is just around the corner, if they are not used with the right balance.

In this article, we are going to analyze how you can set up a discount strategy and we will see 7 examples of commercial promotions that you could use without destroying your brand.

Before looking at some examples, it is important to focus on the reasons why it is important to manage discounts accurately.

The 3 Reasons Why Discounts Can Destroy Your Brand

1) Discounts can have a drastic effect on the perceived value of the product.

For example, if the discount is very high, the market may think that the product has a lower perceived value.

Try thinking about Apple brand products, have you ever seen a 40% discount promotion on an iPhone or MacBook?

Even years after the release of the product on the market, the price remains constant and does not devalue much.

This pricing policy makes it possible to better “anchor” the perceived value of the product to the price.

2) If you use discounts too often, get your customers used to waiting to buy only with the discount.

This is a very common and underestimated case.

Pricing and discount are one of the useful elements to segment and reach your ideal target.

If you offer discounts too often, you might 'get your customers used to delaying their purchase and waiting for the next discount before buying.

3) If you are forced to always make discounts, the price is probably wrong or they don't feel the urgency or motivation to buy.

If you find yourself in this situation, of always having to use discounts to sell your products, most likely the problem is a wrong price.

In this case, potential customers don't understand the value of the product, or because they don't feel the urgent need.

Communication plays a fundamental role in this, both to highlight the solution to the problem, but also to highlight the “unique” benefits that the product presents.

Discounts are a powerful weapon to stimulate purchases as long as you use them with caution to avoid devaluing the brand and the problems just highlighted.

In the next few lines, we will see 7 strategies and tips for making the most of discounts.

7 Tips and Strategies to Make the Most of Discounts

1) Don't discount the products too much.

It may seem trivial, but a discount of more than 20-25%, as seen above, can be perceived as a devaluation of the brand and the perceived value.

There are times of the year when it is necessary to offer a significant discount, such as Black Friday, but it is important to weigh the discount to maintain the value of the product.

There are different strategies and tactics, which we will see in the next few points, that you can use to offer attractive discounts, without devaluing the product.

2) It is better to avoid periodic and regular discounts

Regular and consistent promotions over time can be very counterproductive because it gets your customers used to waiting for promotions to save money.

If promotions are planned only on special occasions, you avoid the risk of getting your customers used to waiting for promos to buy.

3) Personalized discounts for your audience.

The discounts can be used both during the acquisition of new customers, but also during the loyalty phase.

In strategic planning, consider this aspect because you could use discounts within a loyalty program to increase the customer's life time value.

According to study by Brand Loyalty and in collaboration with Visa, almost 2/3 of the members enrolled in a loyalty program modify their shopping expenses based on the points collected and the discounts and gifts received.

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Considering discounts only as a single tool for acquiring new customers is a very partial view of their potential, since they can also be functional in the retention and loyalty phase.

4) Incentives and Gifts may be more effective than monetary discounts

Very often, the discount is considered as a monetary instrument to reduce the purchase price.

In reality, incentives can be not only temporary, but also with free products.

Waterdrop, for example, in its cart, in addition to offering recommended products, encourages the purchase of additional products to unlock products to receive free with the order.

This practice encourages the purchase of additional products, without devaluing the perceived value and makes it possible to increase the AOV.

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5) Offer a quantity discount

The formula 'Get 25% off if you buy more than 5 quantities' can be much more effective than just a 25% discount on the first order.

The logic is similar to the previous point, in one fell swoop the average quantity ordered is increased and the AOV thanks!

This formula can also be used to create a consumption habit.

You might consider offering a monthly subscription plan for consuming the product. In such a way that a new package of products arrives to the customer every month.

If you use Shopify you can use the app Propel Commerce to activate this promotion mode (as you can see in the example here in the photo).

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6) Take advantage of free shipping for small discounts

One of the most common causes of purchase abandonment is shipping costs.

Offering free shipping is an effective strategy to increase the conversion rate!

Sometimes this mode is perceived to be much more useful than receiving a 10% percentage discount.

7) Discount in exchange for a review

The discount is not only a useful incentive during the acquisition phase or for retaining a user.

It can also be used as an incentive to collect testimonials and bring your customers back to the purchase.

In this case, it has a dual function and allows you to also collect video testimonials and images that you can use in your marketing campaigns.

Let's conclude this article with bonus advice.

Is it better to propose a% discount or express it in monetary terms €?

According to the searching by González, Esteva, Roggeveen, & Grewal it is appropriate to propose:

• a% discount for orders under 100€
• a monetary discount in € for orders over 100€

Why?

Motivation is linked to numerical perception.

If you sell a 50€ product, the 20% discount seems higher than the monetary amount of 10€ (in reality the actual discount is the same).

While on a 150€ product a 30€ discount is perceived greater than the actual 20% discount.

This simple tactic is very useful for creating the right frame of the promotional offer.