7 E-commerce Discount Strategies for Conversions

Maximizing conversions is key to any retail strategy - and let's face it, there's a million different ways to go about it. Marketers are always trying out new tactics - affiliate marketing, free trials or subscription models to name a few. But one thing that's a no-brainer is discounting. Not only can discounts give sales a nice boost, but offering them can also be a great way to get rid of old stock or out of date products.

And if you time them right, with some timely and generous discounts you can even increase customer loyalty.

Of course, you can't just go around handing out discounts left and right. Using discounts strategically is essential - and that means being smart about how you use them. Promotional strategies like clearance sales are key components of a broader approach to increase sales and manage inventory. But be careful not to overdo it.

Overusing discounts can quickly turn into discount fatigue - and that's a bad look for your brand. Plus, if you're not careful, you can train your customers to only buy when there's a deal to be had. And let's be real, that's not going to be good for your bottom line.

But if done right, discounts can be a real game-changer. So how do you do it?

Know Why You're Using E-commerce Discounts

When you're setting up an e-commerce store, it's time to think about how you're going to use discounts in your business. At the end of the day, discounts can seem a bit counterintuitive - you're basically saying you're willing to make less on each sale.

But a discount pricing strategy is still essential - it should fit into your broader pricing plans to make sure you're offering discounts in a way that supports what you want to achieve.

Now, let's get real for a second. A reduced price point can lead to higher demand - and if the demand is high enough, your profits can go up. But discounting doesn't work like that. There's a tipping point where you're not going to get as much out of it as you expect. So how do you know when to stop?

It might sound obvious: the ultimate goal of ecommerce discount strategies is to get more conversions. But that's not all. You might also be using discounts to attract new customers, drive engagement, or boost sales.

Before you can start thinking about strategies, you need to ask yourself why you're offering a discount in the first place.

Is it because you're clearing out old stock, or are you in a price war with the competition? Or maybe you're looking to generate some buzz around a new product, or attract new customers. Whatever the reason, it's worth knowing why you're doing it - because it's going to help you decide how to do it.

And don't even get us started on maintaining healthy profit margins. Clearly displaying the original price alongside the discounted one is crucial to avoid losing value and being transparent with your customers. So let's take a look at seven ecommerce discount pricing strategy ideas that actually work.

7 E-commerce Discount Pricing Strategies That Work

Seasonal Discounts

We all know that consumers expect seasonal sale offers, right?

Think back to the winter holidays or back-to-school time. People look forward to discounts then. But seasonal sales don't have to be limited to just the holidays. Take fashion retailers for instance - people also love discounts during the winter holidays or back-to-school season. You can offer seasonal discounts to customers in advance, before the competition even starts - and that can help you get a leg up on your sales. Plus, you can offer exclusive deals to your VIP customers, like early bird deals, which can make loyal shoppers feel valued and encourage repeat purchases.

And let's be real, seasonal discounts can also be useful for getting rid of old stock. Think summer camping gear at the end of the season. Just make sure the discount is on good products, because if not, you'll just end up losing money.

Flash Sales & BOGO Deals

Flash sales are all about creating urgency. That is, you've got a great deal, but it won't last for long.

They play on the scarcity principle - the idea that if something is going to disappear soon, you should grab it now. Flash sales are designed to encourage people to make a decision fast - and they can be a great way to drive quick buying decisions and boost short-term sales. You can use percentage discounts, or unique codes to add a personal touch.This flash sale from Hype shows that you can throw in limited discounts at various points to get the consumer moving towards a sale.

This is the same principle as a limited time offer and can help realise the value of scarcity.

Flash sales should be available to anyone who drops by your online store. Highlight them with a bit of advertising - like a banner that sits at the top of the site - and you'll be all set. If you're a Shopify user, you can use them to draw the customer's eye to the flash sale.

Nearly 88% of Americans rely on discount codes when shopping, and a whopping 64% hold off on making a purchase until a deal is available.

This strategy is a great way to get a sense of urgency going. If the offer is decent, the deal is likely to convert a sale for something the customer wasn't originally looking for - and that's a win.

Offer Discounts Around Cart Abandonment

If you're in e-commerce you'll know exactly what a cart abandonment nightmare is. According to the Baymard Research Institute, 70-odd percent of online shoppers will put something in their shopping cart and then leave it there. No purchase.

There are loads of reasons people abandon their carts. One major reason is that they get hit with all sorts of extra costs - taxes, shipping, or other expenses they hadn't even thought about until they got to the checkout process.

Now some of these issues can be fixed by keeping your e-commerce website in tip top shape, but others require a bit more finesse. A nice way to handle it is by sending a little reminder email. Adding some abandoned cart discounts and targeted discounts in there can really encourage customers to come back and complete their purchases. Automated follow up emails with limited time discount codes are super effective at recovering lost sales from abandoned carts. Discounts also tend to release oxytocin which, trust me, makes people way more likely to stick around and not abandon their carts.

Abandoned cart discounts give people the chance to get some cash off if they head back to their abandoned cart and make a purchase.

It's pretty common for people to leave to try and find a better price. To combat this, send a reminder with a discount offer and throw in some free shipping or a one off voucher to sweeten the deal. Even a 5 or 10% discount can be enough to nudge people forward.

Just keep in mind you're going to need the email address of the customer for these discount offers. If you've got returning customers, you should have their details on file. Include an email form early in the checkout process to make sure new customers can get this special offer.

Exit-Intent Popups With Discount Codes

When a telemarketer is making a call, the customer can just hang up on them. You don’t want call centre problems to be your thing. In e-commerce, you have more tools at your disposal.

Once a customer has left your site, there's no guarantee they'll ever come back. So why not try and grab them back? Just be careful - exit-intent popups need to be used with a bit of finesse. You don’t want to train people to leave the site just to get a discount.

There are loads of ways to put discount popups to use. Exit-intent popups can be super effective if you're trying to grab first time visitors. Not only do you grab their details, but you also snag them with a discount offer.

New Customer Incentives

Studies by Vouchercloud have shown that 57% of shoppers will make that all important first purchase when they can snag a promotional discount.

When a new visitor turns up at your e-commerce store, you really need to make a good first impression. Offering a deal or some significant savings can really get them to make a purchase and come back for more. People often feel like they’re getting a better deal if they spend a bit extra to qualify for an exclusive discount, and that’s a win-win for both your store and the customer. There are loads of ways to do this. You could offer free shipping, a free gift or a one off promo code.

Make the promotion available to customers who create a new account or sign up for a newsletter.

Even if the offer doesn’t lead to a sale right away, you now have the chance to keep in touch with them with promotional emails and sales letters. This will give you more opportunities to expose them to your sales funnel. More chances means more conversions.

Influence-Based Discount

Even though we're all spending more time on screens, other people's opinions still have a big influence on how we make decisions.

If you're an e-commerce business, you already know the importance of social media. It's a great space to get your conversational marketing on. Most of your target market is probably on social media and they might well be talking about you.

A recent study found that 71% of consumers are more likely to make a purchase based on social media referrals. And 81% are influenced by posts from friends and family.

Take advantage of this free marketing opportunity and make a small discount offer in return for a social media post. While that free advertising can be invaluable, the real magic happens in the lead generation potential - a lot more than the discount itself is worth.

You could also offer discounts using a referral program - something Airbnb has been doing for years . These programs are a great way to get existing customers to refer their friends by rewarding them & the new customer with discounts. This approach not only rewards loyal customers but gets them to promote your business, strengthening your relationship with those buyers and bringing in some fresh faces. When you give customers a reason to share with others to get a reward, they'll happily do it in their social circles. Think of all that advertising you'll get from just giving out a discount code, but make sure it's tied to a completed sale so you don't end up out of pocket.

If you want to get the most out of social media conversions, you should make sure your mobile site is up to speed. I mean, if they can't even access your shop, they can't buy from you. There's all sorts of fancy tools to see how easy it is for customers to find what they need on your site - and heatmap tools are a great way to see it from their perspective. That makes them a great resource for boosting conversions.

Customer Loyalty Reward & Personalized Discounts

This last strategy we're going to cover is probably the most important one for ecommerce sites.

One of the most essential sales tips out there is to listen to what your customers want. For ecommerce, one way to "listen" is by setting up a membership or loyalty program - customers get discounts, you get a better idea of what they're buying, and that lets you tailor your sales to them better.

Having a program in place to reward customers who keep coming back will make those customers feel appreciated.

It's amazing how much more valuable long-term customers are. Loyalty programs can be points-based, tiered, or even both - and can be structured in such a way that rewards customers for bigger purchases, increases the average order value, and brings in more money from each customer.

You can also use these programs to give customers a shout-out during their birthday week, a free gift after a certain amount of purchases, or upgraded shipping. Even automated birthday or anniversary rewards can really make the brand-customer relationship feel more personal.

These programs are great at keeping customers on board, and that can be worth a lot more than any discount you could offer. Discounts can even make customers feel good inside, which decreases cart abandonment.

You can also use a paid membership program. For example, Go Outdoors does this where members get special offers, gifts, or first refusal on new products. When members feel like they're part of the inner circle, they're much more likely to keep buying from you than going to a competitor. Just make sure you keep the good stuff coming, though.

A company's top 10% of customers spend way more than the average - three times more per order, and sometimes up to five times more.

When you offer loyalty discounts, you're mainly rewarding your best customers, and that increases the chances they'll keep coming back for more. Rewards are also super good at fixing things when customers complain. It happens to all of us - we make mistakes, and customers get upset. Having a clear customer service plan, and using tools like RingCentral's virtual switchboard to make it easy for customers to reach out, can really help to turn bad into good.

Then, once they've aired their grievances, listen to them, come up with a solution, and then throw in a little something extra - a "cherry on top".

Rewarding new customers will get more sales, and decrease cart abandonment. Rewarding loyal customers will encourage repeat business, and stop people from leaving.

Next Steps for Ecommerce Companies

What's your goal with a discount strategy? Are you trying to get more people to convert, clear out some old stock, or push a new product?

With all these options out there, you need to pick one that fits your business. Every ecommerce business is different. A well-planned discount strategy is just as important as discount pricing for driving sales and customer engagement.

To boost order values, try offering volume discounts and encouraging customers to buy in bulk, especially if there's a minimum purchase or spend requirement. BOGO (Buy One, Get One free) deals are a great way to get a quick push in sales and customer engagement, and offering a discount for early purchases or pre-orders can get those initial sales going.Getting the right strategies in place for your brand image, industry & target audience can give your sales a bit of a kick in the short term, but what's really important is that you're also going to attract customers who actually love your business - which in turn will give you a much bigger long-term gain when it comes to customer lifetime value.

That means you don't just get a quick fluke of more conversions, but instead you start to build a steady upward trend & achieve the kind of success that lasts.