According to McKinsey research, nearly 40% of consumers switch retailers to get better deals.

The challenge is no different from the classic showrooming problem that has plagued retailers for over a decade. Your customers discover your products, compare, and then disappear to buy from wholesalers, retailers, or resellers offering lower prices.

Because they can’t compete on price and leadership won’t budge on enforcing a MAP policy, many teams will simply throw their hands up and concede that 40% of price-sensitive shoppers will buy elsewhere.

Before you do that, I want to share an alternative POV. After working with hundreds of ecommerce brands to increase conversions, there are some tried and true strategies that will deliver in spite of MAP restrictions.

It starts with reframing the situation. Customer acquisition isn’t the problem. Customer preference is.

Instead of trying to win the price war, it’s time to focus on better customer experiences and compete in areas that can’t be replicated by the competition.

Solution 1: Make the experience worth the premium

The insight: 72% of consumers expect personalized experiences. Resellers can’t always deliver them.

While you can buy Glossier products at retailers like Ulta and Target, Glossier’s direct channels offer something those retailers can’t: a personalized skincare quiz that analyzes your skin type and concerns to curate 3-5 products specifically for your needs.

Their website shows personalized product recommendations based on your quiz results and browsing behavior, creating a tailored experience that feels custom-made.

This is the idea of selling the experience of being your customer and making it a seamless, one-of-a-kind experience to shop with you.

What this looks like in practice:

• Real-time AI personalization throughout the shopping experience
• Immersive product discovery via recommendations
• Clear articulation of your brand values and differentiators relevant to each unique user
• Brand storytelling that makes the purchase decision emotional instead of transactional

Solution 2: Create exclusivity that other sellers can’t touch

The insight: Exclusive SKUs and premium products can command 20-30% higher profit margins. While your resellers can sell your products, they can’t sell your brand or your relationship with customers.

Nike didn’t always beat resellers by matching prices. They created SNKRS app exclusives and limited colorways that resellers literally cannot obtain, contributing significantly to digital revenue and spiking DTC sales during the pandemic.

The strategy works because exclusivity creates urgency, and urgency often trumps price sensitivity.

What exclusive access looks like:

• Brand-only colorways and limited editions
• Early access windows 24-48 hours before reseller inventory
• Extended size runs available only through your channels
• Bundle combinations that resellers can’t replicate

Solution 3: Build loyalty programs that compete with discounting

The insight: Experience-based loyalty programs can make the shopping experience delightful without lowering prices.

84% of customers say they’re more likely to engage with a brand that offers a loyalty program, which is a game-changer for ecommerce companies without MAP policies.

For example, members of Sephora’s Beauty Insider program generate 80% of its total sales. While the program doesn’t guarantee products at the lowest price, it does offer exclusive access, personalized services, and community benefits that competitors cannot provide.

Loyalty programs that work:

• Tier-based structures with exclusive access benefits
• Community elements that create network effects
• Experiential rewards that resellers can’t match
• Personalized services that add genuine value

Solution 4: Optimize every conversion touchpoint

The insight: When you can’t compete on price, every visitor becomes precious. Optimizing the digital experience can offset price disadvantages.

Munchkin faced this exact challenge competing with retailers like Target and Walmart, where their products were sold. Working with The Good, they discovered that 70% of their traffic was mobile, but frustrated users were bouncing due to annoying pop-ups and poor navigation.

As David Embree from Munchkin put it, “If you’re paying to invite someone to your store, you don’t want them to walk in and immediately turn around to go somewhere else.”

By removing invasive popups, optimizing mobile navigation, and improving product findability, Munchkin decreased its bounce rate significantly and saw a lift in site-wide KPIs within six months.

What a powerful optimization strategy looks like:

• Comprehensive audit of user behavior and analytics data to identify conversion barriers
• Prioritized solutions that turn barriers into opportunities
• A/B testing and other experimentation methods to validate site improvements
• Device-specific optimization to customize the experience
• Navigation improvements to help users find specific products instead of browsing aimlessly
• Streamlined purchase paths that eliminate every source of friction
• Sophisticated abandoned cart recovery that addresses objections and provides additional value

Solution 5: Leverage tech to offer innovative shopping experiences

The insight: While resellers focus on price optimization, you can invest in technological advances that create immediate competitive advantages.

Warby Parker’s AR try-on experience through their site and mobile app allows customers to virtually test frames from home. The company’s annual report mentions that try-on features contribute to customer satisfaction, which is known to increase conversion rates.

Advanced technology requires significant investment that discount-focused resellers can’t justify for all the product types in their store. But it creates customer experiences that justify premium pricing and drive conversion improvements.

What technology differentiation looks like:

• AR try-on experiences
• Real-time personalization that updates offers based on customer activity
• Predictive analytics that anticipate customer needs/interests
• Social commerce

Solution 6: Lean on your brand story and values to connect with customers

The insight: Your resellers are selling your product, but they can’t sell your story.

Olipop transformed the crowded soda market by crafting a compelling narrative around gut health and nostalgia.

While Amazon can stock their prebiotic sodas, they can’t replicate the brand’s authentic story about making childhood favorites functional for adult wellness.

This storytelling creates emotional connections that justify premium pricing. Customers pay $2.50 for an Olipop versus $1 for a Coke because they’re buying into a healthier lifestyle narrative. They also have a subscription program that makes it easy for customers to restock every month.

Weaving the brand story into everything, from blog articles to stats on quality, helps customers build a direct relationship with your brand.

Content strategies that differentiate:

• Educational content that positions you as the industry expert
• User-generated content that creates social proof and community engagement
• Brand storytelling using elements like quality tiles to connect with customer values

Solution 7: Try product bundling to create value

The insight: Retailers may have lower prices on individual products, but you can create bundles to provide unreplicable value.

Harry’s grooming bundles products to make it easier for customers to find what they need for a smooth shave. Terms like “complete suite” and “essentials” create the perception of necessity while offering genuine convenience.

Smart product bundling makes price comparison impossible because customers can’t find identical packages elsewhere. The strategy works because bundles provide genuine convenience and a perception of value.

What strategic bundling looks like:

• Product combinations with complementary items, services, or accessories
• Value-added services like installation, setup assistance, or training included
• Exclusive package deals available only through your channel

Solution 8: Create unbeatable service experiences

The insight: Exceptional customer service can become a primary differentiator when price competition is off the table.

REI’s legendary approach exemplifies this strategy through its unmatched 100% satisfaction guarantee and return policy. Members can return any REI product at any time for any reason, with no questions asked, even if they’ve used it for years.

The policy extends beyond just returns to include their expert gear consultation services, where knowledgeable staff help customers choose the right equipment for their specific outdoor adventures, and their extensive educational programs, including classes on everything from rock climbing to bike maintenance.

Superior service creates defensible advantages because it requires investment in people and processes that discount-focused resellers can’t justify. The key is making the service itself a reason to choose you.

What service excellence looks like:

• Pre-sale consultation and personalized product selection guidance
• Extended warranties and satisfaction guarantees that competitors can’t match
• Omnichannel service consistency across online, phone, chat, and in-store
• Post-purchase support that turns customers into advocates

Understanding customer psychology and your unique users

Research shows that price is rarely the only factor in purchase decisions, even for price-sensitive customers. So, understanding the foundations of customer psychology and what matters is crucial when competing beyond price.

Some of the foundational elements of customer psychology are true no matter what you offer:

• Trust and Credibility: Customers often pay premium prices for retailers they trust. Build credibility through professional website design, clear policies, security certifications, and transparent business practices.
• Convenience and Time Savings: Many customers value convenience more than small price differences. Streamlined shopping experiences, fast shipping, and easy returns can justify MAP pricing.
• Risk Reduction: Customers often choose established retailers to reduce purchase risk. Comprehensive return policies, warranties, and a reputation for reliability can overcome price objections.

But there are other user behaviors that will be unique to your customers. Doing the research to understand what they want and need is the best way to deliver experiences that can compete when your company doesn’t have minimum advertised price policies in place.

Compete on value, not on price

MAP policy restrictions don’t have to be conversion killers. They can be conversion redirectors that allow you to compete differently.

While the wholesalers, retailers, and resellers race to the bottom on price, you can build sustainable differentiation through superior customer experience, expert service, and strategic value creation.

The ecommerce teams that thrive under MAP constraints understand a fundamental truth: customers don’t always buy from the cheapest option. They buy from the option that provides the most value. Your job is to ensure that option is always yours.

Ready to transform your MAP constraints into competitive advantages? The strategies outlined here require systematic implementation and continuous optimization. At The Good, we specialize in helping ecommerce brands optimize their conversion strategies when traditional price competition isn’t an option.

Let’s talk and see if there could be a good fit.

The post Why “We Can’t Compete Without MAP” Is the Wrong Problem to Solve appeared first on The Good.

Looking at the trend, there could be a lot of money on the table for this upcoming Black Friday and Cyber Monday.

If you want to win big this year, it’s time to start optimizing your site (and this doesn’t mean thinking of what discounts to offer!). We’re updating our guide to help you do it.

Keep reading to see the three-step optimization process to complete before the holiday traffic strikes.

• Step 1: Conduct a Website Audit
• Step 2: Optimize Your User Experience
• Step 3: Re-evaluate Your Sales Strategy

Step 1: Conduct a Website Audit

Conducting a thorough review of your website prior to the shopping season will set your business up for success.

You have just a few short weeks to identify holes in your conversion funnel before the holiday traffic surge arrives.

Technical Review

Start with a technical audit of your website. Before you can dive into improving your website’s customer journey, you need to ensure that it’s technically functioning at its best.

Site Speed

Having a fast ecommerce site is the difference between conversion and abandonment.

According to HubSpot, your conversion rates can drop by an average of 4.42% with each additional second of load time. Unfortunately, for a lot of ecommerce managers, optimizing a website’s load speed is often overlooked and languishes at the bottom of the priority list.

Many brands, content with the quickness of their homepage, forget that their product pages, category pages, and shopping carts’ load speeds matter just as much. Having a homepage that loads in 2 seconds is great, but if your shopping cart takes 10 seconds to load (or worse, times out), you will lose a sale.

Server Load Capacity

There is a predictable surge in traffic during Black Friday and Cyber Monday. While everyone considers this a blessing, it can also be a curse. Even popular ecommerce sites can buckle under the unusual amount of visitors going to their sites.

Part of conducting your website audit should be to check whether your server can handle the doubled or tripled amount of requests coming in.

User-Experience Review

Analyzing the user experience of your website is an essential step to consider before moving on to testing. Evaluating your website analytics helps you identify the specific pages on your site that may be causing problems for your customers.

The three key components to conducting a successful user-experience review are…

1. Eye-tracking heatmaps
2. Session recordings and user testing
3. Talking to customers and customer service representatives

Eye-tracking heatmaps

First, let’s focus on heatmaps—a tool we use on a daily basis at The Good. Eye-tracking heatmaps provide a visual representation of typical user behavior by aggregating data showing where users click, move, and scroll on a webpage.

Heatmaps may not provide the breadth and variety of data you’ll receive from a website analytics tool, but they work very well for quickly diagnosing problems that could potentially be costing you sales.

Hotjar is an excellent tool if you’re serious about optimizing your website experience. It provides heatmap reports based on the clicks and movements of customers on your site.

Session Recordings

Next, let’s talk about session recordings. Session recordings (also referred to as session replays) are one of the essential tools you’ll need to conduct a comprehensive website audit.

As the name implies, these recordings capture the mouse movements, clicks, and scrolls that a visitor executes while browsing your website. Session recordings provide an unbiased look at how real customers behave on your site and play a key role in helping you uncover potential usability challenges.

At The Good, session recordings are an essential part of our UX research process. Having the opportunity to observe how real customers navigate a website is invaluable knowledge that will make your optimization efforts all the more impactful.

User testing

User testing is another method of research that works in tandem with session recordings. This research technique involves asking “user testers” in your target audience to complete specific tasks on your site.

While the tester is completing the assigned tasks, their screen is recorded, and they’re usually asked to narrate their thoughts on the browsing experience.

The knowledge you’ll take away from even just a handful of user-testing sessions will be invaluable to the optimization process later on.

Recommended tools for session recordings and user testing:

• UserInput.io – With a range of user-testing options, you can get quick and in-depth user feedback on your site. Real people will record their live impressions of your site, so you can make sure their experience is exactly as you want it to be.
• UserTesting – This is another tool for conducting remote, unmonitored user testing. After you input the specific demographic information of your target audience, this service will hand-pick a group of user testers who meet your criteria to participate in tests.

Talking to customers and customer service representatives

The last (and arguably most important) task you should take into consideration when conducting a website audit is speaking directly with your customers. You’d be surprised by how many ecommerce managers we talk to who have never invested in focus groups or in-depth customer surveys.

There’s no better way to understand how your customers perceive your website than talking with them directly. Investing in just one focus group session will provide more than enough insight to fuel your next round of A/B tests.

In addition to focus groups and in-depth interviews, you might consider opening a direct line of communication between your UX designer(s) and your customer support team.

It’s not uncommon for there to be a disconnect between these two teams, especially for larger ecommerce companies or if customer service is outsourced to a third party. Creating a feedback loop between these teams may unearth latent problems that can then be addressed quickly by your ecommerce manager or UX designer.

Step 2: Optimize Your User Experience

After identifying the specific challenges and conversion blockers that are hindering sales on your site, the next step is optimizing your user experience.

The three key areas of we recommend focusing your attention on are your:

1. Homepage
2. Product Pages
3. Checkout Page

Homepage

A critical mistake we see ecommerce managers make is insisting that their homepage is the most important place on their site. They’ll invest the majority of their time (or their developer’s time) trying to make it the most beautifully designed page of the site with complete disregard for the rest of the customer experience.

Here’s the problem with this approach: Putting most of your resources into designing an aesthetically appealing homepage is like investing all of your automotive budget into a new paint job, then not having funds left over to buy gas or repair the engine. It’ll look good, but it won’t get you far.

That said, the homepage does play an important role in your customer’s journey. Your homepage should accomplish something in a major way that every subsequent page on your site should echo: let visitors know exactly where they are, what they can do there, and how to take the next step forward.

Unfortunately, many brands misuse the homepage as a dumping ground for all things marketing, neglecting the wayfinding purpose of the page.

Here’s what we recommend you do to get your homepage optimized before the BFCM traffic starts pouring in:

1. Revisit your value proposition

Visitors direct their attention to your value proposition when deciding if they need what you’re selling. If they don’t fully understand the value that you can provide for them, they’ll leave your site.

Consider looking at your unique selling proposition (USP) to aid in developing a value propostion. If you can clearly describe what makes your company unique, you’ll be better equipped to explain to your customers why they should choose you over the competition.

This template is a good place to start:

• Target audience: Be as specific as possible so you attract the interest of the prospects who matter. If you’re targeting digital marketers, be specific about that.
• Target objective: The objective is revealed when you’re determining your customers’ immediate needs. If your target audience’s goal is to improve their search engine optimization strategy, speak to that need.
• Unique selling proposition: Explain what value you can provide through your products/services. This is the unique solution that you’re selling to your audience.

One way to make sure your homepage is delivering on all of the above is to have an acquaintance perform a 5-second test (usually, friends and family are too close to give real, raw feedback).

Go to a local coffee shop and offer to buy someone a coffee for a few minutes of their time. Show them your website and ask them to tell you about the first things they notice.

2. Optimize your navigation menu

Website navigation can make or break your visitors’ experience. Attempting to navigate a website that doesn’t have a logical, well-defined structure is like being dropped in the middle of a complex maze with no map and no frame of reference.

It’s overwhelming, frustrating, and all-around unpleasant — not exactly the user experience you’re hoping for.

• Optimize your mobile website’s navigation. Having a navigation menu appropriate for a mobile device is essential to any ecommerce website. Consumers expect the mobile experience of a website to be as good, if not better, than the desktop experience. Provide your visitors with a responsive, optimized navigation bar, and you’re guaranteed to see an improvement in your mobile conversion rate.
• Make site search frictionless. Visitors who use search typically have the intent to buy or act. Plus, they’re much more likely to find what they’re looking for. People who run a site search convert buyers approximately two times more often than people who don’t.

3. Remove any unnecessary distractions

First, if you’re currently using a nonrotating carousel on your homepage, we strongly recommend removing it.

Research has shown that a staggeringly low 1% of site visitors click nonrotating image carousels (carousels that don’t change automatically). Additionally, 84% of those clicks are on the first slide, meaning all the remaining slides combined receive a dismal 16% of the clicks.

The numbers aren’t much better for carousels that rotate automatically. Auto-rotating carousels receive a bit more attention, but again, the first slide dominates, receiving 40% of all clicks. The second and third positions receive 18% and 11% fewer clicks.

While it may seem like a good idea to use a carousel, the numbers simply don’t back it up. The click-through rate (CTR) on carousels is abysmally low, with the lion’s share of clicks being gobbled up by the first slide.

Another distraction you’ll often find on an ecommerce homepage is the “Sign-up for our email list!” pop-up. In general, we recommend that you stay away from pop-ups that detract from the browsing experience.

Product Page

If you plan on investing in paid traffic this holiday season, it’s important you’re making sure your product pages are properly optimized to get the most out of that traffic.

To optimize your product pages for a better conversion rate, we recommend you focus on:

1. Product naming conventions

When it comes to product naming conventions for your products and product categories, the more descriptive, the better. The reason for this is that each word is a potential keyword for organic search.

Google favors product pages that have descriptive titles because they allow users to find exactly what they’re looking for. Long names also implicitly indicate more value and stand a better chance of attracting the visitor’s attention.

2. Product descriptions

Great copy begins with an understanding of the audience – their needs, their desires, their problems, and the words they use to describe them.

The copy should be presented in a scannable, jargon-free format, with benefits highlighted to spell out exactly what the product will do for the potential customer. Use white space to help keep your product page layout clean and easily readable.

The product description should provide critical product information, short-circuit objections, and provide answers to the visitor’s most pressing questions.

3. Product photography/video

This is where your writers and designers join forces. High-quality images or illustrations lend credence to the copywriter’s product description.

Show people wearing and using your products to give the prospect a glimpse of ownership.

Your headlines and product images should work together to establish the product’s value and illustrate why the prospect would be wise to select it.

The practice of including video elements in the digital assets strategy has risen so dramatically that many ecommerce sites now consider videos essential. Do people worry your product is difficult to use? Video can disprove that concern by demonstrating that the owner only needs to follow a few simple directions.

Do customers want to know more about the difference between certain features? Video can describe those differences quickly and accurately.

4. Back-in-stock notifications

If you’re prone to running out of stock on certain items during the holiday shopping season, you need to have a solid back-in-stock notification option to recapture those sales when your stock is replenished.

There are a few things you can do to ensure you don’t miss out on sales when a product goes out of stock:

• Use back-in-stock emails. Work on your back-in-stock emails themselves. There are a few details to note here. Include the brand, the product, and its best price in the email subject line. In the body of the email, we recommend including an image and mentioning the brand, product name, and price again. You can also include a reminder of why they are receiving the email, clearly explain that it’s back-in-stock, and include a very clear call-to-action that brings them to the exact product in the store.
• Use SMS and push alerts. SMS text is quickly becoming one of the most effective ways to reach customers. Providing customers with the option to input their mobile number instead of an email address may be an even more impactful way to notify customers that an item is back in stock.

Checkout

According to Statista, over 69% of visitors who load items into an ecommerce shopping cart end up not finishing the transaction. For one reason or another, they abandon the cart.

The money online retailers invested in advertising, social media, content development – every sales and marketing expense you can name – has contributed to getting someone right to the brink of the purchase. But that person decides to walk away.

Improving your shopping cart conversion rate is the spot where your ecommerce optimization dollars will pay off best. It’s the ideal place to begin.

Here are several items to consider when optimizing your checkout process:

1. Evaluate your post-purchase follow-up

Reevaluate your post-purchase follow-up procedure to ensure customers are receiving the best possible service even after they complete a purchase.

Despite the statistics, most marketers give little time or thought to their post-purchase email sequences. They send a receipt and little else. This is missing out on a significant opportunity to convert new customers into recurring customers.

6 Post-Purchase Emails That Convert and Retain

Here are the post-purchase emails we recommend you include in your post-purchase follow-up sequence:

• The order confirmation. The first email should always be the confirmation of purchase. When people click Buy, they want to know that everything worked, . Assure them they didn’t just send money into the ether of the internet, never to hear from you again. Confirm that their order was received and that someone on the other end is doing something about it.
• The shipping confirmation. The shipping confirmation email allows you to update the customer on the status of their order, continue to build trust with them and nurture your relationship with them.
• The shipment update. Approximately one week after their shipment should have arrived, you want to check in to make sure everything arrived in good condition. This is also an excellent opportunity to entice the customer with complimentary products or sign them up for a recurring purchase plan.
• The review request. After the customer has had time to use the product, make sure to politely ask them to submit a review and let you know what they thought of the product.
• The post-purchase offer or replenishment reminder. Now that your customer has purchased a product and hopefully left a positive review, it’s the best opportunity to encourage them to re-order the product or something similar. If the item they brought was food, health supplements, or necessities, you could also send an email reminder for them to replenish their stock to get them to re-order.
• The loyalty program. Your final email should contain information about a loyalty or rewards program that your customers can join to entice them to buy again and transform from one-time buyers into loyal customers.

2. Hide the discount code field

With the rising popularity of discount-finder apps like Rakuten and Honey, consumers have grown to expect a discount on every purchase made while online shopping. Unless your business is relying on discounts to draw in new customers, showing this form field to users is only going to encourage them to leave your site in search of a discount or promo code. After they leave your site, it’s very unlikely they’ll return empty-handed to complete the purchase at full price.

We always recommend hiding the discount code field (even completely removing it) so visitors aren’t tempted to go searching for coupon codes somewhere on the internet.

3. Offer free shipping

For retailers, it’s important to consider both the short-term and long-term benefits of offering free shipping. In the short term, offering free shipping will likely lead to an increase in orders and a higher average order value (AOV), especially if you set a minimum order threshold that your customers need to reach before they “unlock” free shipping.

Sixty percent of ecommerce businesses report that “free shipping with conditions” is their most successful marketing tool. If adding one more item to the shopping cart results in getting free two-day shipping, most consumers will do it.

In the long term, offering free shipping will benefit your business by increasing customer lifetime value and helping you build a group of loyal repeat purchasers. Additionally, it can be a great way to maintain your competitive edge in the marketplace, especially if you’re operating in an industry that sells commonly available products or even commodity products that compete heavily on price.

4. Implement a one-page checkout process

The checkout page is easily one of the most crucial yet often overlooked elements of an ecommerce website. If your checkout process is too lengthy or complicated, you’re seriously hindering sales for your business. We always recommend implementing a one-page checkout.

A single-page checkout simplifies the checkout procedure and eliminates any additional steps in the customer journey that could potentially contribute to cart abandonment. The one-page checkout template comes standard with most major ecommerce platforms (Shopify, BigCommerce, Magento), so there’s really no reason not to have it on your site.

Integrate social proof throughout the customer journey

Implementing social proof on your site can be one of the most effective methods for increasing your overall conversion rate. Sixty-one percent of customers read online reviews before choosing to buy a product or service.

If everyone is buzzing about a newly-released movie, and I’m hearing nothing but recommendations to go see it, I’m quite likely to go. On the other hand, if the reviews are sour and my friends tell me the movie was a waste of time and money, I’ll skip it.

Human beings are social creatures. We want to fit in. Our tendency is to do what others are doing, even if we pride ourselves on individuality.

Social proof is evidence that something is popular – that others have endorsed it. By creatively and soundly displaying social proof, ecommerce website managers can stack the deck in their favor and generate more sales. Here are some ideas to get you started:

• Product reviews from purchasers – Product reviews are regarded as one of the most effective forms of social proof to use on ecommerce sites. Nearly 95% of shoppers read online reviews before making a purchase, and the purchase probability for a product with five reviews is 270% greater than the purchase probability of a product without them. If your website doesn’t include product reviews somewhere on the product page, you’re losing a substantial amount of business.
• Customer testimonials – Requesting testimonials from prior customers can be a great way to build credibility and trust with your audience. These differ from product reviews in the way they are presented. Testimonials are concise recommendations that are placed in a call-out format. If product reviews are the backbone of social proof, testimonials are the face. Including video testimonials with your written testimonials is a particularly powerful tactic.
• Earned media and press – If recognizable media brands have endorsed your company, you should definitely be leveraging this earned media on your homepage.

Step 3: Reevaluate Your Black Friday & Cyber Monday Sales Strategy

After conducting a thorough review of your website and optimizing your user experience to meet your customer’s needs, it’s time to review your selling strategy for the BFCM season. How are you going to drive the highest return on investment from your promotions?

What promotions will you offer?

If your current strategy is to rely on discounting to bring in new customers, it might be time to start thinking outside the box. Here are three ways you can optimize the impact of your planned BFCM campaigns to compete with big brands like Amazon, Walmart, Best Buy, and Apple.

1. Offer free shipping

Local retailers often counter the “I can get it cheaper online” objection with “Not after you add on the cost of shipping.” And while the reality is that free shipping plans often fail to provide significant cost savings to consumers (the expense must be covered somehow), conversion rates typically take a healthy leap forward when free shipping is featured. Just use Amazon Prime as an example.

Free Shipping Options

Here are several recommendations for how to offer free shipping without destroying your margins:

1. Free shipping threshold. A popular way to offer free shipping is having a certain cart threshold visitors need to reach before they unlock free shipping. Customers who are close to reaching the order amount for free shipping will very likely tack on additional products to reach the required threshold. That, in turn, can push your average order value up considerably and help make up for the absorbed shipping cost.
2. Free shipping to members. This is a great way to improve customer retention while also growing your mailing list. You can charge for membership or not, but helping people feel like they’re a part of your business and giving them a good reason for shopping with you are good ideas.
3. Free shipping to limited locations. Given the often exorbitant cost of shipping abroad, many ecommerce stores will offer free shipping only to those in their own country. Another possibility here is to offer free shipping from the distribution center to a local retail outlet. Be sure to spell out which locations qualify for free shipping.
4. Flat rate shipping. This isn’t a free shipping offer, but it does alleviate much of the shopper’s anxiety. Those who know what the shipping cost will be before loading up the cart are more likely to follow through and place the order than those who don’t know how much shipping costs will be until they’re ready to pay. This tactic is especially effective when higher-priced items are ordered. A $5 flat rate shipping on a $150 order is far more attractive than $5 shipping on a $12 order.

2. Leverage FOMO

Remember to create a sense of urgency around your campaigns. The fear of missing out (FOMO) can draw sales from people who might otherwise abandon a shopping cart and not return to complete the sale.

Here are a few ideas to help get you started:

• Displaying “limited quantities available” on popular products
• Offer exclusive offers or priority buying privileges to loyalty program members
• Display sold-out items to encourage users to sign-up for a back-in-stock notification
• Implement a free shipping countdown timer

3. Don’t lean on discounting

Shoppers love sales. Any reason you can come up with to hold one – be it Black Friday, Memorial Day, or your ecommerce birthday – is sure to boost revenue. There’s just one problem with the idea. “On Sale” means a discounted price, and a discounted price means less profit.

Yes, a properly orchestrated sales strategy can make up for the slimmer margin by pumping up the volume. The problem is you end up sacrificing profits for the reputation of your brand.

Discounting leads customers to think that you’re a discount brand. Instead of being known for quality products or outstanding service, customers associate your company with the lowest price.

You become the ecommerce version of Dollar General, attracting those searching for bargains. When a customer receives a discount on their first purchase, you can be pretty confident that they’re going to try to get the same discount with every subsequent purchase.

Do you really want to join other discount brands in a race to the bottom? Instead, focus on Black Friday Deals that add value for your customers.

Segment & Grow Your Customer Base

Segmentation delivers results. Ecommerce managers who take the time to identify customer segments and tailor messages specific to each segment consistently see ROI boosts that justify those efforts. People like to feel like you’re speaking directly to them, not just blasting out generic sales pitches to the masses. The more you know about your prospects, the better you’ll be at influencing their buying decisions.

There are two levels that should be considered in market segmentation: product fit and customer fit. Some would see this as the difference between business-to-business or business-to-consumer sales.

Remember, though, that buying decisions are made by people. Whether you’re selling to a corporation or a homemaker, you still need to be concerned about individual preferences.

At The Good, we tend to look at segmentation as either bottom-up or top-down.

Top-down segmentation begins with the product or service and seeks to fit the offer to the most lucrative segments of the available markets.

Bottom-up segmentation focuses on the buyer’s preferences and style, then works to get the best messaging to the right customers. An offshoot of bottom-up segmentation is the preparation of customer personas.

Neither approach is best. Insight from both is needed to develop the most effective marketing plan. The aim of market segmentation is to know what matters, where it matters, and when it matters. The end result of market segmentation is the division of your viable market into clusters of buyers with similar needs and desires.

Market segmentation research is the basis of determining your most effective marketing mix.

It’s Never Too Late to Start Optimizing

Be prepared to adjust your strategy to meet changing needs and demands. If a certain offer or campaign isn’t working for you, make the necessary adjustments to ensure that the rest of the season goes smoothly.

It’s OK to change up your ecommerce strategy as long as you’re making changes based on data, not assumptions.

If you’re still not sure what to start improving on your website or don’t have time to manage optimization on your own, you might consider bringing in an optimization expert to lend a hand.

For over a decade, The Good has successfully improved the digital experience for brands large and small, including Nike, Adobe, Xerox, The Economist, and many others.

If you’re interested in learning more about our approach to conversion optimization and how we can help improve your website experience, check out the Digital Experience Optimization Program.

We believe in producing results that are based on data from our insight platforms as well as expert analysis by members of The Good’s UX Strategy team.

The post The Ecommerce Optimization Guide for Black Friday & Cyber Monday appeared first on The Good.

Shoppers love sales. Any reason you can come up with to hold one – be it Black Friday, Memorial Day, or your ecommerce birthday – is sure to get more orders.

There’s just one problem with the idea. “On Sale” means a discounted price, and a discounted price means less profit. Yes, a properly orchestrated sales strategy can make up for the slimmer margin by pumping up the volume, but what if you could increase ecommerce sales without discounting prices?

In this article, we’re going to share the best ecommerce sales strategies that we’ve found to get more conversions without lowering your prices.

What’s Wrong with Discounting in Ecommerce? 

On the surface, offering discounts seems like a perfectly fine idea. Many successful online companies have been using discounting strategies for decades, and it appears to be working for them, right? There’s an entire economy built around helping customers find the lowest prices. A discount-finding tool, was recently purchased by PayPal for a staggering $4 billion.  

So why are they such a problem? Three reasons. 

1. Discounting leads customers to think that you’re a discount brand.

Instead of being known for quality products or outstanding service, customers associate your company with the lowest price. You become the ecommerce version of Dollar General, attracting those searching for bargains. When a customer receives a discount on their first purchase, you can be pretty confident that they’re going to try to get the same discount with every subsequent purchase. 

Do you really want to join other discount brands in a race to the bottom? Probably not. 

2. You can’t build a business by targeting deal-hunters

If you want to turn a profit, shoppers with a “no discount, no purchase” mentality are likely not your ideal customers. Discounts cannibalize your profits, leaving you with razor thin margins. If you want a healthy bottom line, you probably don’t want your primary customers to be bargain hunters. 

3. Discounting is a short-term solution to a larger problem

Ultimately, you need to figure out why your sales are slumping, or why they aren’t increasing organically. In other words, where are the holes in your sales funnel? Is your website confusing? Are your landing pages or Google Ads ineffective? 

Leaning on discounting to help your business make it through a tough time is like putting a bucket under a leaky pipe instead of taking the time to repair the pipe. Clearly, you need strategies for increasing ecommerce sales without discounting. 

23 Promotional Ideas for Your Brand (That Aren’t Discounting) 

If you want to know how to increase ecommerce sales without discounting, you’ll need to use one or a variety of tactics. The following ecommerce sales strategies will enable you to boost sales without eroding your profits. 

1. Buy one/get one

If you have excess inventory, BOGO (free or half-off) is an effective way to increase customer engagement and generate sales. You can even stack the offer so that they get more when they buy more, like Beloved Shirts does:

2. Buy one/give one

A buy one/give one promotion is when you give something away each time a customer places an order (or for each product purchased). 

This promotional idea has been around for a long time, but it was popularized when shoe brand Toms launched in 2006 and pledged to give away a free pair of shoes for every pair sold. Other brands like Warby Parker and State Bags are built on this model as well. 

3. Free gift with purchase

Offering a free gift with purchase can be a powerful incentive, giving customers the nudge they need to buy. And if the gift is a sample of one of your products, it gives customers yet another reason to buy from you in the future. Sephora knows this and often includes product samples for free with orders:

4. Free shipping 

Free shipping belongs on every list of ecommerce sales strategies. Customers demand it. 

Ecommerce conversion rates are always higher when free shipping is included. No surprise there. There’s a reason it’s the cornerstone of the Amazon Prime program. If you want to see your ecommerce sales increase, give free shipping to customers, just like Bonobos does for customers in the United States:

5. Free returns

Offering free returns sets customers minds at ease and incentivises them to purchase. They know that they can easily return products if they have any issues. Yes, it will probably increase your return rate, but it will also increase customer loyalty.

Zappos is known for their generous return policy, which is important to shoe buyers who might not get the right size on the first order.

6. Threshold free shipping / free gift

Offering some form of benefit for orders over a threshold amount can motivate shoppers to add more items to their cart, increasing key metrics like Average Order Value (AOV) and Customer Lifetime Value (LTV). Athleta offers free shipping on all orders over $50:

7. Loyalty programs

A loyalty program allows you to reward customers who are particularly faithful to your brand. Whether through special discounts on high-demand items or exclusive access to particular products, loyalty programs keep customers coming back again and again. Keenly aware of this reality, Amazon offers all sorts of perks to Prime members:

8. Display “limited quantity” messaging

Showing that you have a limited number of something in stock can create a sense of urgency in customers. They don’t want to miss out on the opportunity to buy. Etsy does a great job of increasing urgency on their product pages by showing how many items are in stock, as well as alerting customers if an item is already in someone’s cart. 

9. Show sold out items

Highlighting sold out items shows how popular they are, which can cause even more people to want them. Just be sure to give customers the option of being notified when the product is back in stock. Otherwise they may forget about it. Snow Peak uses this technique with out of stock items and has stellar results:

10. Money back guarantees

The greatest fear of most online shoppers is buying something, not liking it, and not being able to easily get a refund. Offering a rock-solid money-back guarantee can ease this fear and compel the customer to purchase. Fly-fishing company Orvis offers what they call a “Great Catch Guarantee”:

11. Service guarantee

Even broader than a money-back guarantee, a service guarantee assures your customers that you will do whatever is necessary to assure their satisfaction. Companies who offer outstanding customer service create customers for life, reducing churn rate and increasing Customer Lifetime Value. Bombas offers a happiness guarantee that gives customers every reason to purchase from them:

12. Product bundling

Product bundling is the practice of grouping two or more items together and selling them as a single unit, usually at a lower price than if they were sold individually. While this is technically a discount, it also increases the customers’ order value, so you’re still bringing in more money. 

Notice how Kylie Cosmetics smartly create bundles. They group multiple products together and present them as a bundle even though the customer would be spending more. 

13. Special edition/seasonal items 

A special edition item (or a season edition item) is a product that will only be produced for a certain period of time. There isn’t a limit to the number you’ll sell, but there’s a limit for the duration that you’ll sell it. 

Special edition items work well because they build hype, create scarcity, and build on seasonal excitement. The best example of this are seasonal fashion items. Whether you sell 10 winter jackets or 10 million, you’ll still only sell them during the winter. 

14. Pro deals (special offers for teachers, students, etc.) 

Offering deals for specific groups of people is a great way to show your support for those causes and drive traffic to your business. You might offer promotions like buy one get one for students, first responders, military/veterans, healthcare workers, teachers, or other deserving groups. Many people will support your business because of your offers even if they don’t qualify for the deal themselves. 

Keep in mind, however, that verifying eligibility will be a challenge here. You’ll need shoppers to submit proof of their membership in order to accept the deal, otherwise everyone will claim to be eligible. For example, Under Armour requires you to verify your military or first responder ID before claiming their deal. 

A word of advice: Make sure the group you choose to honor is deserving. No one will appreciate “Free gift for stockbrokers.”

15. Sponsorships 

Sponsoring an event, charity, award, conference, or other cause is a great way to build good will with your audience and get prime exposure to potential buyers. Sponsorship could be as simple as paying a few bucks to have your logo displayed. Or you may decide to take a more active role in the process, perhaps by giving a talk, supplying the cause with products, or hosting your own events. 

16. First purchase anniversary gift

This isn’t one of the most popular ecommerce sales strategies, but it’s surprisingly effective.

A gift that celebrates the anniversary of a customer’s first purchase is a great way to commemorate a positive relationship. It tells the customers that you care about them and their support. Most importantly, a free gift raises the perceived value of your products, rather than lowering the perceived value as a discount would. 

17. Co-marketing deals

Co-marketing is when you work closely with another ecommerce brand to promote each other. It gives you access to another audience of potential buyers. It’s also quite cost effective, which is why it’s one of the most popular e-commerce sales strategies for brands that already have established audiences.

In 2020, sophisticated footwear line Thursday Boot Company worked together with Cobbler’s Choice, a brand that sells footwear care products, such as cleaners, brushes, waterproofing sprays. These brands complement each other nicely without competing. 

Thursday Boot Company posted on Instagram showing off the Cobbler’s Choice Suede Cleaning Kit.

On the other end, Cobbler’s Choice also posted on Instagram, showing off a pair of shoes from Thursday Boot Company.

18. Subscriptions or memberships

A membership or subscription program is a powerful way to bring your customers into an exclusive club and generate some guaranteed revenue. If your membership is structured well, you can actually get your customers to spend more than they would otherwise.

Check out this membership program from Italic. For $60 a month, members get access to $120 in credit, referral bonuses, credit for product reviews, and other benefits. Isn’t that a 50% discount? Technically yes, but the subscription nature could end up bringing in more revenue from a single customer than that customer would normally spend on their own. 

19. Limited editions

People love exclusivity. We love having things that others can’t get. It’s a component of the scarcity principle: We overvalue things that are hard to obtain. You can make some of your products seem more valuable by only selling a limited number of them. 

Streetwear brand Supreme takes this to a whole new level. When a product runs out, they almost never produce more of them. Customers have become conditioned to checking the site every Thursday for new products before they sell out.

20. Store credit/amount for your next purchase

If you give your customers 20% off, then you simply lose 20% of the sale. It’s a total giveaway. But if you offer store credit, customers only get the discount on future purchases. This means you make a little extra for the same deal. 

21. Upsell/complementary item at checkout

The checkout page is one of the best opportunities to upsell a customer. You know they like your brand and you have a pretty good idea of the kinds of products they want to buy. Don’t be afraid to use this as a last-minute attempt to increase their order value. 

22. Each purchase gives back

Customers love knowing that their purchase is helping make the world a better place, even in just a small way. This is especially useful for commodity products where prices are the same and customers can buy anywhere.

This doesn’t mean you have to build an activism arm of your company. There are charities that facilitate this for you. One Tree Planted will plant a tree for $1. You could simply donate a dollar for every order and honestly say, “We plant a tree with every order.” And that’s exactly what Amour Vert does.

23. Wish lists

A wish list is simply a saved list of items that you’d like to own at some point. They use it to a) make finding those items easier in the future, and b) to give their loved ones ideas for gifts. If you ask someone what they’d like for their birthday, and they say, “Check out my wish list on HomeDepot.com,” that’s an easy decision for you and a quick sale for Home Depot. 

Other Ways to Increase Sales Fast Without Discounting

The previous list of ecommerce sales strategies is comprehensive, but depending on your needs, you may not want to implement them all. If we could only use seven optimization tactics from our toolkit, the ones we’re listing here would be among the top choices. We’ve seen these ideas breathe new life into ecommerce conversion rates again and again. They work.

Split testing (A/B testing)

Split testing (which also includes A/B testing and multivariate testing) is a direct route to more revenue. It’s a Kaizen-type approach to continuous improvement that – done correctly – guarantees results.

The process is simple: You send portions of traffic at different versions of your website. The version that gets the highest conversion rate is the winner. 

The problem, however, is that most agencies or ecommerce development shops don’t test deeply enough, try to test too many things at once, or fail to test altogether. Don’t do that. Learn this lesson and shut out the competition.

In fact, we recommend taking advantage of A/B testing for any of the ecommerce sales strategies you end up using. You should always be testing. 

Identify and highlight your USP

This is a key way to separate yourself from the competition. Your unique selling proposition (or unique selling points) answers the question, “Why should I buy from you, rather than from someone else?”

Not only should your business have an identified and proudly proclaimed USP, every product or service needs its own USP. What, you say? There’s nothing really unique about the products you sell?

Have you heard of Grey Poupon mustard? Check the grocery shelves. It is definitely NOT the cheapest mustard you’ll find there. Customers wouldn’t dream of paying less for Grey Poupon. After all, it’s marketed as the brand the super-wealthy can’t do without. It’s not “common” mustard.

Fix your checkout procedure

You rarely see someone at a local store get almost to checkout, then decide to walk away and leave the shopping cart sitting there, but it happens online all the time.

Digital marketing managers sometimes tell us “That’s the nature of ecommerce. Cart abandonment is unavoidable.” That’s not the case, in our experience. We’ve seen dramatic improvements when optimization principles are applied to the checkout procedure.

Provide plenty of social proof

Online shoppers want to know ordering from you is a smart thing to do. The best way to show them is by letting other happy customers shout your praises. Prospects are much more likely to believe it when someone else gives you kudos than when you brag about yourself.

Use ratings, reviews, comments, endorsements – get your customers involved in the promotion of your products, services, and brand. Every sales page on your ecommerce site should include social proof. If you’re afraid of getting ‘bad reviews,’ get over it. Not having customer comments at all is a whole lot more damaging than risking a few complaints.

Smart companies turn problems into solutions. When someone does gripe about something, they go to work to take care of the problem – in plain sight of other shoppers. They don’t try to hide mistakes. They fix them.

Cut down on friction

The path to purchase is a journey, not a one-stop event. Prospects must find your ecommerce store, access it via the internet, browse your inventory, select the product or products best for them, add items to a shopping cart, enter the checkout procedure, and complete the purchase.

Prospects don’t become buyers in an instant; they move along a path that leads to the final decision. Optimization tactics remove barriers (friction) from that path and make it EASY for prospects to become paying customers.

Create a sense of urgency

Ecommerce shoppers are apt to do considerable research before making a decision. Your job is to give them plenty of information (so they don’t have to go elsewhere to answer their questions) and a reason to buy from you now.

There are plenty of creative ways to do that: exclusive limited-time bundles, showing remaining stock left, including a gift with purchase during a specific time frame, or appealing to shipping deadlines (especially around the holidays).

When you give prospects a good reason to complete the transaction while they’re on your website, your sales will increase. And that is the purpose of optimization.

Leverage FOMO and exclusivity

Fear of missing out (FOMO) is a big consumer purchase motivator, and you can take advantage of it by utilizing both exclusivity and scarcity. With exclusivity, you offer bonuses to customers that they can’t get anywhere else, while scarcity highlights the limited availability of particular products. 

Hide the coupon field during checkout

If a customer sees a coupon field displayed prominently on your checkout page, do you know what they think? “Oh, but I don’t have a coupon…” The customer starts to feel like they’re paying more than they ought to for their order. That’s a terrible way to start a relationship!

You can reduce this effect by simply minimizing the coupon field. Shoppers with a coupon will look for the link, but shoppers without a coupon will skip right past it without much of a thought. 

How to Grow Your Brand Without Discounting: Invest in Optimizzation

It’s simple math: you’re twice better off selling 10,000 widgets at a profit of one dollar per widget ($10K net profit) than you are if you sell 1,000 widgets at a profit of five dollars per item ($5K net profit).

That’s the dilemma every marketer runs up against when pricing goods. “Shall I go with the higher price, but fewer sales? Or am I better off lowering the price to get more buyers?” (Of course, the starting place for pricing is always to survey the current market and competition.)

The danger is in getting fixated on the prices your competitors are selling those widgets at, then basing your sales strategy on undercutting the price. In common terms, that’s called “getting in a race to the bottom of the barrel.” It’s not the recommended practice.

At The Good, we invest much of our time educating smart digital marketing managers in the principles of optimization. And a good optimization strategy does not include discounting.

Let’s go back to the widget sale and consider a new set of numbers:

Scenario #1: Your rock-bottom pricing draws 100K visitors to your ecommerce website. The deep discount pulls a hefty five percent conversion rate on an average order value of $50. That means you made 5,000 sales and generated $250K.

Scenario #2: You keep your prices up and refuse to discount. Even if you manage to get the same amount of traffic (100K) and the AOV jumps from $50 to $75, if your conversion rate falls to 1%, your revenue will drop to $75K.

Scenario #3: You read this article and decide to put some of the tips below into action. By applying the principles of optimization, you’re able to keep the conversion rate at five percent and drive the AOV up to $95 per order. Your revenue moves to $475K – almost double that of your steep discount strategy – but without discounting prices.

Optimization is the missing link between your website traffic and your sales volume.

Constantly relying on discounts to boost sales is a losing game in the long run. Yes, revenue increases, but profits take a hit. What’s more, you label yourself as a discount brand in the eyes of many customers, and once you’re on that path it’s hard to escape. 

There are effective ways to increase ecommerce sales without discounting. By strategically leveraging these ecommerce sales strategies, you can compel customers to purchase while still maintaining healthy profit margins. 

The strategies listed above are just part of the optimization process. If you would like help optimizing your website for maximum ecommerce sales, we recommend you reach out or sign up for our ecommerce Insights newsletter.

The post The Top Ecommerce Sales Strategies (Including How To Increase Sales Without Discounting) appeared first on The Good.

In this article, we’re going to explain the concept of limited time offers and how they work. We’ll show you some examples and give you some tips to get started. This powerful technique is one of the most effective tactics to drive conversions on your ecommerce site. 

What is a Limited-Time Offer?

Let’s say you’re in the market to buy a new computer. You’re standing at Best Buy in front of a model that has every feature you want, and it’s offering a free set of blue tooth headphones with purchase. The store is about to close, so you decide to think about it and come back tomorrow. There’s plenty in stock. Then the salesperson says, “That offer is only good for five more minutes. The special ends tonight. If you don’t act now you won’t get the free gift.”

What do you do? Buy now and save a few hundred dollars on the headphones you’ve also been eyeing, or keep looking? Chances are good the limited time promotion would swing you from prospect to buyer in a hurry. It’s the computer you want, you’ve verified it’s an exceptional deal, why not end the search and take it home with you tonight?

Like most people, you’ll probably make the purchase and be pleased with yourself for boldly making a decision and going home with a free gift. But that’s only partially true. Best Buy nudged you toward a decision by instilling a sense of urgency with their limited time offer. 

A limited time offer is a time-bound promotional deal. It’s an offer with a clear end date and/or time when it becomes unavailable. They usually take the form of sales, discount codes, free gifts, exclusive products, or anything else that is only available for a specific period of time. These are simple, but powerful tools to turn undecided buyers into customers. 

Here are some examples of limited time offer messaging:

• Offer ends at midnight tonight
• Only a few left in stock
• Offer limited to items on hand
• Get yours while supplies last
• Order within one hour to get delivery tomorrow

Limited time offers rely on the principle of scarcity marketing. This concept was coined by Dr. Robert Cialdini. It’s based on the concept of supply and demand. It states that as a product or service becomes more difficult to obtain, the more valuable it becomes to potential buyers. Scarcity stretches both ends of the formula by exhibiting a limited supply while simultaneously cultivating demand.

Basically, when something is limited, our brains tell us to get it now before we miss out. Any time you experience the fear of missing out (FOMO) and have the urge to purchase something while supplies last, you’re feeling the pull of scarcity marketing.

(Quick note: Scarcity also applies to limited supply offers, but that’s a subject for another article.)

Examples of Limited Time Offers That Drive Conversions

Before we talk about making your own limited time deals, let’s look at some effective ones. 

To get a better feel for how well limited time offers work, consider one of the best examples: Black Friday. It’s the perfect opportunity for limited time offers because the event is only one day. If customers want the discount, they’d better be ready to jump in there and shop. 

The concept worked so well, marketers came up with another limited time deal extravaganza: Cyber Monday. Together, those days kick off the month-long shopping sprint that traditionally brings in about a third of annual retail sales. And it’s all based on limited time: December 26th is too late. The presents have all been opened.

Typically a good Black Friday deal couples a powerful promotion with a clear time limit. You probably see a lot of these around the holidays. Attention-grabbing colors and countdown timers can further stimulates urgency. 

Here’s an example. In this ad, the copy “This is as cheap as we’ll ever go” makes a customer’s inner voice sound with, “I’ll never save more money than this!” 

The following ad uses the phrase “limited time,” but does not supply a timeframe. This can work in some cases. By being vague with the timeline, the customer may feel extra pressured to buy now because they don’t know when it ends. But you have to be careful, because if the time isn’t authentic, most customers can see right through it and you lose credibility.

What stands out about this example, is the free gift with purchase. Rather than discounting, and devaluing their product, the brand adds value to a shopper’s purchase.

The ecommerce marketplace, Etsy, heavily relies on scarcity marketing to sell products. A message like “Only 1 available, and it’s in X number of people’s carts” creates a sense of urgency that would motivate new customers to buy.

Some offers come with their own natural time limits. Take this ad for instance. If you want the product for Christmas, you need to order by certain dates. These are powerful because they are organic. The time limit never feels forced or artificial. 

Limited Time Offer Best Practices

If the limited time offer concept sounds simple, that’s because it is. Smart marketers present the tactic in a host of ways, though. Let’s go over some best practices to get you started.

1. Use limited time copy

When it comes to copywriting, it’s important to use limited time language, such as “one day sale,” “sale ends at midnight,” or “two days only.” Here are some other variations:

• State the length: Macy’s One Day Sale
• State length and time: Today (6/17) is Your Last Chance – Expires at Midnight
• Not only for products: Free Shipping – This Month Only
• Call it what it is: Limited Time Deal
• Stress the risk: You’ll Never See the Price This Low Again

Be very specific here. Don’t assume your audience will understand that “Memorial Day Sale” means only Memorial Day. Spell it out for them with something like, “Memorial One-Day Sale.”

2. Use proper timing

Timing refers to the nature of your offer. Your offer should be short enough to make people fear missing it, but not so short that they can’t reasonably make a purchase in time. For instance, a one-day flash sale is fine, but a one-hour sale won’t get much attention. Your audience needs a little bit of warning. 

It also helps to set a definite time for your shoppers so they know exactly when the deal runs out. If you just say, “Sale ends today,” people might wonder what that means precisely. End of the workday? Midnight? Which time zone?

Louis Vuitton accounts for this by including specific details (down to the hour) about the limited free shipping they were offering for Father’s Day. This is a non-intrusive way to advertise a discount without being obnoxious and scaring off customers.

Furthermore, a limited time offer doesn’t mean you have to spring it on your audience at the last minute. Your customers know you’ll offer something for Black Friday, so build anticipation by telling them early and often.

In fact, when the window is too tight, people actually rebel against the limited time deal. Researchers at the University of East Anglia ran experiments to see what leads people to accept or reject such offers. Time-based offers were accepted more often when the study participants had 12 seconds to decide as opposed to four seconds. 

Basically, if you push people to make a decision right this instant, they will reject the premise. But if you give them just a little bit of time to think, they are more likely to take the deal. 

3. Promote your ad everywhere

Ideally, you want to tell as many people as possible, but you definitely want to tell your audience. This involves sending multiple email messages, posting on social media, implementing retargeting campaigns, spreading the news to your influencers, and any other marketing channel you have access to.

4. Get creative with your offers

While limited time offers are often used as part of discount pricing strategies, they don’t have to come in the form of price reductions. You can offer a free gift for a limited time, a free upgrade, a special service, or access to a new product. “All orders placed today qualify you for our Hawaiian Vacation drawing,” for instance.

RIPT Apparel is a clothing brand with a unique spin on limited time deals. Their homepage has a “Daily Deals” section that consists of three new limited designs at a discounted price every day. The designs change at midnight. This creates a sense of urgency. If customers don’t buy now, they’ll miss the chance to own these designs entirely. 

If sales and discounts are the only ideas you have, we strongly recommend checking out our massive list of ecommerce promotion ideas.

5. Focus on the benefit of the offer

A limited-time offer is simply the nudge your prospects need to make the decision to buy. But you still need a compelling offer that your audience finds valuable. The benefit should be the most prominent component of your offer.

For instance, this offer from Sephora is only available for the holiday season but emphasizes the free gift with purchase. The customer gets excited about the potential added benefit they’ll receive with purchase, before moving on to the details of the date.

6. Close your offers when they’re over

One of the worst things you can do for your reputation is to mislead customers about the timing of your “limited time” offers. If a deal is available often – or worse, all the time – your customers won’t feel compelled to buy it. In fact, your deception may turn them off entirely. 

For example, The New York Times uses limited time offers to increase their subscription sales. They advertise that their limited time offer to subscribe for $1 a week is ending soon, but that discount has been running for months without changing.

There’s plenty of room for creativity with LTO’s but you should always remember the basic rule: If you say it, do it. If you ignore that principle, you can dilute or destroy the results you might otherwise enjoy. We’re all familiar with the “Going out of business sale” that never ends. Before long, it becomes a joke. If your offers are dishonest or inaccurate you risk losing the trust you’ve built with your customers which could motivate them to go to your competitor next time.

7. Boost effectiveness with personalization

Limited time offers aren’t limited to landing pages. They make great email content as well, especially when you pair it with personalization. Notice how Barnes & Noble couples their limited time offer with a selection of products curated for the recipient. 

8. Don’t discount too much

When you want to drive revenue up, it’s tempting to offer a sale. Sales are an easy way to create a spike in your sales report, but they’re a hard habit to break. Too many sales can actually damage your business by draining your margins and conditioning your customers to expect sales (and therefore not buying when there isn’t a promotion happening). 

This doesn’t mean discounts are always bad. Two or three a year won’t hurt. They are also useful tools to secure a high lifetime value customer with a breakeven sale. 

Check out this episode of our podcast, Drive & Convert, where we talk about discounts and their effects on your business.

9. Go easy with the popups

Once you’ve designed a limited time deal, it’s tempting to shove it in your shoppers’ faces. What’s the point if they don’t know about it, right?

Using popups to notify your visitors of a great deal is fine. In fact, we occassionally encourage it. But don’t hit your shoppers in the face with a popup before they’ve had a moment to read your logo. The best performing popups don’t appear immediately. They give visitors some time to see the site and grow invested in the page. 

How long should you wait to serve a popup? There’s no one-size-fits-all answer here. You’ll need to run tests to determine effectiveness.

Limited Time Offer Marketing Works

The best thing about limited time offers is that they work. If you leverage scarcity marketing correctly, you’ll get more sales with a limited time offer than without one. That’s a universal truth. Few marketing tactics are as dependable as limited time offers, which is why you see them all the time.

Need help? Speak with us if you need more ideas or want to run your plans for a limited-time promotion by an optimization team. At The Good, helping you craft winning digital experiences is what we do best. Contact us.

If you want to learn more about optimization, check out our book, Opting In To Optimization. You’ll learn a set of principles that will help you capitalize on unprecedented market demand and build sustainable, thriving businesses that can weather unexpected economic storms. Get the book.

The post Limited Time Offers: How to Drive Conversions with Scarcity Marketing appeared first on The Good.

There is a reason our team is never quick to recommend an in-depth competitive analysis as a part of the research process. 

Let me explain. 

As ecommerce conversion rate strategists, we offer data-backed testing ideas for your website. These concepts are born from qualitative and quantitative customer research specific to your brand. We dig through the information and come up with small changes to your website that result in big financial gains. 

We’ve learned over a decade never to blindly implement the same things your competitors have on their websites. Why? You might be seeing a test or even worse, you might be seeing a site feature that is draining their margins. 

If you follow the same best practices as everyone else without doing your own analysis, you will never take your brand to the next level and you might even bump it back a few.

In this article, I’ve collected five of the common site features that our research clearly shows are conversion killers.

1. Pop-ups: Degrade the user experience, attract low-value subscribers

At The Good, we’ve run thousands of live user testing sessions on our clients sites and one of the most common things we hear is disdain for the multiple popups that hit them when they first enter a site. 

These pop-ups are typically lead generation campaigns, aimed at building email lists. They fail because the web practitioners running them don’t make an effort to see things from their customer’s perspectives. 

Most analytics platforms report that anywhere from 60-85% of your website visitors are new-to-file, i.e. they have not visited your website before on that device or browser. 

If practitioners actually cleared their cookies and viewed their website from the new visitor perspective, they would probably be annoyed too. 

Sites often open with: 

• Cookies policies
• Chat widgets
• Email popups with a discount

And this is before customers are even introduced to the products.

It can be a terrible first impression, and when paired with discounts gives the perception of a discount brand. Imagine Tiffany’s or Hermes offering 10% off in a popup as soon as you land on the site. Brands that protect their value won’t do it, and neither should you.

Can you imagine the same thing happening in a store? If customers could only see the window display and not be let in without deciding right away if they want to exchange personal information for a discount?

And as the final straw, in exchange for the discount (and poor user experience) you are getting low quality and unqualified email addresses. For a startup or small brand that is paying per subscriber through their email platform, the open rate and click-through rate will be abysmal. Pop-ups will build a list full of burner emails specifically used for discounts. 

2. Discounts: Margin drain, attract budget shoppers and tire kickers

The discount pop-up can contribute to another common site feature that makes our list of conversion killers: discounting. 

Once a customer is trained to believe there is a 10% discount waiting for every burner email address they share, they are never going to be willing to pay full price. 

In 2020, we saw real hardship for brands that relied heavily on discounting as a strategy. They had become overly reliant on the boon cycles that discounts offered and accepted the serious lulls between sales. 

But, when at the start of the pandemic nearly every brand was also offering discounts there was no differentiator for their brand and their customers were even more price-sensitive than usual. It left brands that discount heavily in a bad position. 

Similar to the first conversion killer mentioned, a lot of brands with strong recall are selective about the way they offer their discounts. 

Take Glossier, for example. They have a robust referral program but rarely do blanket sales. Instead, they reserve their discounts to endear themselves to industry folks and promote word-of-mouth recommendations. 

There are so many alternatives to discounts that build brand loyalty. Here are a few examples:

• Referral programs
• Points or loyalty programs that offer meaningful items to VIP cohorts
• Free gift with purchase
• Free or reduced shipping for order minimums
• Expedited shipping for priority cohorts or VIPS
• Bundle or bulk discounts

These all attract those customers you really want: people excited about your product. Avoid people who are comparison shopping and only looking for the best deal. 

3. Generic CTAs: Shop Now isn’t helpful, Shop Men’s Pants is

According to Baymard research, contextual language is much more helpful than generic wording. For example, a menu that says “Shop” is far less helpful than one that says “Men’s Pants” “Work Boots” and “Protective Clothing.” 

Generic CTAs can actually be extended far beyond just the button. 

So, what we’re really talking about here is something known as “information scent.” Can a user glean from the copy and context of your site, what is on the other side? 

If not, users develop a hunting and pecking behavior. They click an item, and when it turns out it’s not useful or just not what they needed, they have to start over. They end up having to click multiple times. 

To make sure we avoid this behavior, we sometimes challenge ourselves at The Good to remove the images from a website and see if we can still tell what the site does or sells. 

The best websites have a clear value proposition, a high-information scent menu, and clear CTAs meant to guide users to either an overview or a clear product category. 

Causing misfires or forcing users down an unhelpful path because of bad CTAs or poor information scent wastes their time and expels their attention… clear conversion killers.

And your user’s time and attention are too precious to waste.

4. Features vs. Benefits: Using your language, not your customer’s

Now here is something I wish they taught in all design schools because the people creating products are usually so focused on what it does, rather than what the customer gets out of it. 

You need to speak in the language of your customers. 

Let’s paint a picture of this point with an iconic example from Apple and the release of the original iPod. While there were other music players out there, many said things like “1 Gig of storage.” Apple, on the other hand, said “1,000 songs in your pocket.” 

The difference is that competitors talked about the capacity in a way that was meaningful to insiders but still took some calculation for the average consumer to understand. Apple told us what that meant to the user with human and non-abstract language. 

When we audit a website, we are always paying attention to the little moments where users are required to translate. Technical spec charts aside, the goal is to communicate to a user in a way that means something to them, rather than touting minute, indecipherable differences.

5. FAQs: Where good content goes to die

Only a small portion of users ever make it to FAQ pages, usually around 1%, so hiding important details here is not advisable. 

Here are a few ways you can incorporate FAQ information in the proper locations across the site:

• Sizing questions: Address these in size guides that are easily accessible from product pages
• Shipping questions: Communicate shipping costs and expected delivery windows early in the process so you don’t give shoppers sticker shock or lose a time-based order like a birthday or anniversary gift
• Trust-building: Weave trust indicators throughout your site with social proof on the home page or secure checkout badges as customers enter credit card information

Companies use FAQs to share information that should be communicated much earlier in the funnel. To reach the 99% of customers that don’t make it to the page, share information on the path of the customer journey rather than out of the way in a buried list.

The opposite of conversion killers: site features that boost conversions

Ok, so now you know 5 of the most common site features that are actually conversion killers. What about site features that boost conversions?

The best way to find this out is to talk to your customers and talk to our team at The Good. We can help you comb through your site’s data and conduct personalized research to find out what site features will boost conversions on your website. 

If you’re looking for a place to start, check out our Digital Experience Optimization Audit and let’s get to work!

The post 5 Common Site Features That Are Actually Conversion Killers appeared first on The Good.

Take the coronavirus pandemic, for example. According to a recent McKinsey & Co survey, 40% of consumers are more mindful of where they spend their money, and 32% say they are moving to less expensive brands and products to save money. 

Competing with low-priced products is hard, which is why plenty of retailers turn to discounts. On the surface, this seems to be the right thing to do, especially when 60% of US consumers say discounts are more important to them while shopping online since the start of the coronavirus pandemic. 

But while discounted pricing can certainly boost your conversion rate, it lowers returns on each conversion, lowers average order values, and can end up causing real revenue to decline.

I know how you feel – darned if you do, and darned if you don’t.

There are times when discount pricing can pay off, and there are times when it can hurt you a whole lot more than it helps. In this guide, I’m going to show you how to decide when and how strategic discount pricing can make sense, and when it doesn’t.

We’ll cover the types of discount pricing, the psychology behind discount pricing, how to develop a winning discount pricing strategy, advantages and disadvantages, and show you some examples of discount pricing in action.

After that, we’ll talk about how to compete (and win) against a competitor’s discount pricing campaign. In other words, this is a full-spectrum guide ecommerce managers can use to know when, how, and why to pull discount pricing out of the tool box.

What is a discount pricing strategy?

Discount pricing is a strategy often used to generate more sales – typically by dropping the prices you ask for your goods or services. However, discounting too much or too often can eat into your bottom line revenue and do major damage to your brand.

That’s why it’s essential to understand the fundamentals of discount pricing strategies, including the advantages and disadvantages that accompany them.

The common types of discount pricing

Discount pricing typically falls into one of seven basic categories. Understanding these categories can help you determine whether a discount campaign is appropriate for your situation at any given time.

1. Volume discounts: The more you buy, the less it costs. Quantity discounts can convince customers to purchase in bulk. Loyalty programs and cards that give a free item after a certain number of items are purchased can be another way to approach volume discounts while bundling items together.

Luma gives a 15% discount for customers that buy six water bottles, 20% for customers that buy 12, and 25% for those that purchase 24. 

2. Seasonal discounts: These are an excellent way to jumpstart sales at the beginning of peak seasons or reward customers who purchase during dormant times. Offering discounts based on the time of year can not only generate excitement, but can help you clear out the previous season’s inventory to prepare for the coming season.

Dog Eared gives customers 20% off around Mother’s Day. 

3. Promotional discounts: Keep them short-term and aimed at driving a special sale. This is the type of discount you don’t want to leverage recklessly. Promotions that occur too frequently can signal your customers not to order from you until there’s another promotion. Consumers expect holiday sales, so don’t be afraid to jump on that bandwagon… just be careful about making promotions a major part of your sales strategy.

Boohoo is renowned for hosting promotional sales almost every single day. 

4. BOGO sales: You’ll want to check local laws on this one. BOGO offers (buy one get one) often claim the second item is “free.” If you must buy something to get something, though, you’re really getting a 50 percent discount, not a “free” item. Be sure to describe the BOGO accurately and either spell out the real savings or make them easy to calculate.

Simcha’s offers a BOGO deal on their women’s and children’s winter clothing. 

5. Loyalty discounts: This can be an amazingly effective way to build the bond between you and your best customers. Be clear on the terms and make sure the discount really is ONLY for those who qualify – whether by being a repeat customer, a longtime customer, a membership customer, or other status definer. Make your customers feel special, and they’ll make sure you stay in business.

Jane’s Boutique gives returning customers 30% off their next purchase. 

6. Membership discounts: These can be reserved for card-holding members of your private club (Amazon Prime members, for example), for members of someone else’s club (AARP), or for those who qualify by being a military veteran, a senior citizen, or some other designator. Just as with loyalty discounts, showing appreciation for your customers is always a good idea.

The psychology of discounting

It’s easy to think that discounting was a byproduct of online shopping. The increase in competition and the need for instant gratification has definitely seen the number of brands using discounts soar, but the strategy has been around for a lot longer. 

In fact, it was Coca Cola that started the trend. They were the first company to lure in customers with discounts as far back as 1887. Customers could use a coupon to redeem a free glass of Coke – so simple, but such a huge leap for the retail world. 

Today, it’s no secret that there are psychological principles at work in the buying and selling process. Most have heard of Dr. Robert Cialdini’s book, “Influence: The Psychology of Persuasion,” but Cialdini didn’t invent the ideas covered there. He simply collected and codified them. 

Discount pricing comes with its own set of psychological touchpoints:

• Classical Conditioning: Offering promotional discounts too frequently can train your audience to wait for promotions before they’ll buy from you.
• Perception of Quality: One of the reasons people buy a luxury new product is to get better quality (or at least the perception of quality). A product that costs $399 looks ‘inferior’ to the similar product priced at $600. Discounting can lower the perceived quality of your goods.
• Scarcity: Discounts tied to urgency are usually more effective. When the consumer is faced with “Buy now or lose the opportunity,” the decision is often swayed towards placing the order immediately.
• Social Influence: Most people like to brag about getting a “good deal.” Those who get a generous discount on something feel smarter than the neighbor who paid full price and won’t be shy about letting others know about the transaction.
• Perception of Savings: Comparisons help make your case. Don’t just list something at a 25 percent discount. Give the “normal” price, slash through it, and state the current price. If you’re going to discount something, make it dramatic!
  • Be careful about how you display the discount. A rule of thumb (for instance) is that buyers respond better to percentage discounts (e.g. “20 percent off”) for items priced under $100 but prefer seeing absolute value discounts (e.g. “Save $20) when the item is over $100. Being sure to show the original price, stricken out, with the new discounted price next to it, can also be helpful.
• Exclusivity: Justify your discounts. Always have a reason. Whether it’s the end of summer, you’re passing on a special price you arranged from the manufacturer, or today is your dog’s birthday… make sure to announce WHY you’re discounting. Otherwise, your customers may think your profit margins are so high that you can afford to discount everything all of the time.

Discount strategies and tactics: Top-performing discounts you can use today 

Look around every corner and you’ll come across a new discount pricing strategy in play. It’s almost become second nature for consumers to expect a discount after their first purchase or get money off at a big sales event like Black Friday or Cyber Monday. 

Here are some of the most common discount strategies in the ecommerce world: 

1. Discount codes

Discount codes are digital money-off vouchers that customers can enter when making a purchase. 

There are a slew of websites around today that scrape discount codes from sites and offer them to shoppers for free. This means that nine times out of ten, a customer will be able to find a discount code for a brand they want to buy from (and, if not, there will definitely be a discount code for a competitor). 

Discount codes can be created for multiple different reasons: 

• To give specific customers a chance to get money off (i.e. first time buyers or those born in August) 
• To celebrate a specific event 
• To give to influencers to share with their audiences 
• To promote a specific line of products 

Gap offers customers 25% off for the brand’s birthday with a specific discount code. 

2. Abandoned cart discount 

The average abandoned shopping cart rate is 69.80%, which means almost 70% of customers walk away empty handed from your online store. Abandoned cart discounts lure customers back with the promise of money off if they complete their order. 

Mimosa catches customers before they leave by offering a discount if they subscribe and complete their purchase. 

3. Flash sales

Big shopping events like Black Friday and Cyber Monday are rife with flash sales. Customers can get discount pricing on a huge amount of products for a limited time – but there are flash sales that are even shorter than this, running for six hours, three hours, or even one hour in some cases. 

Flash sales like this tap into the sense of urgency and FOMO we spoke about earlier, compelling on-the-fence customers to take the plunge and hit the buy button. 

Rue Lala offers all its products for a reduced price in a 48 hour flash sale. 

4. Free gift with purchase

Getting a freebie with a purchase isn’t so much a discount, but the customer is getting something for free which sweetens the deal. This tactic is often used on first-time customers who can claim their free gift after making their first order. 

Applecrumby Fish gives customers the chance to unlock a free gift when they buy a specific product. 

In another example, Suzy Shier offers customers a free blanket when they spend over a certain amount. 

5. Free shipping if you spend over X

Again, this isn’t so much a discount but an incentive for customers who might be on-the-fence. According to research, nine out of 10 customers say free shipping is the top incentive when buying online, while 93% of consumers will buy more if free shipping options are available. 

This tactic lets shoppers unlock free shipping if they spend over a certain amount or buy a certain number of products, increasing their AOV. 

Hint gives customers free shipping when they buy three or more items. 

6. First-time customer discount

Offering customers a first-time buyer discount is almost a rite of passage these days. It’s a key way merchants get shoppers on their email lists, and gives potential buyers the chance to try out a brand and its products for a reduced rate. 

Dodo Case uses a pop up to ask new visitors if they want to claim a 10% discount. 

7. Tiered discounts

The more money a customer spends, the more money they can save. This is the mindset behind tiered discounts, where percentages increase along with a customer’s cart total. 

Boll & Branch start by offering customers $25 off if they spend over $150. 

Ecommerce discount pricing – bad idea or good idea?

Incentivizing customers can seem like the right thing to do, and adding a discount code is the default way of doing this. But, while it might boost your sales numbers quickly, it can come with some serious tradeoffs. 

“But everyone is discounting!” 

Sure, but that’s because they’re essentially hitting the easy button, not trying to find the best way to boost sales numbers, increase revenue, and instill brand loyalty. 

That’s not to say you should never offer discounts. We’re simply saying that there are better ways to incentivize purchases, like increasing the value your customer receives rather than slashing your prices. 

Discounts give every instant gratification, but they can lead to detrimental long term effects like: 

• Drained margins
• Lower customer lifetime value
• Higher revenue churn rates
• Attracting less-than-ideal customers

Discounts definitely aren’t always bad. They can secure a high customer lifetime value on items that require repeat purchases, and they can be a great way to attract a new surge of customers once or twice a year. 

Discount pricing strategy pros and cons

To help you determine whether a discount is right for you or whether you need to dig deeper to add value to your offerings, here are the pros and cons of discount pricing. 

The advantages of discount pricing 

• Discounts not only appeal to current customers but attract new customers. If you’ve computed the lifetime value each new person adds to your business, it’s easy to see where giving up a chunk of your profit (or even losing money) for one sale is worth it in the long run.
• Discounts present the perfect opportunity to offer cross-sells and upsells that can more than make up for the money you forfeited by providing the discount.
• Discount pricing promotes brand recognition for great prices delivered. If you develop a reputation as not only being the place to find a great selection of tents and sleeping bags – but also the place where shoppers can find great prices – you’ve tapped into some word-of-mouth magic.

One more time: if you discount too frequently, you can train customers to buy from you only when the price is reduced. You’ll end up looking like the store that’s been holding a “Going out of business” sale for years. Eventually, you’ll lose credibility. Customers will stop feeling a sense of urgency. They’ll quickly figure out that all they have to do is wait for the next discount. They’ll begin to think that everything is always marked down.

The disadvantages of discount pricing

Discounts can also be the starting point of a downward pricing spiral that may eventually damage your ability to sell the product at full price.

The disadvantages of discounting are serious enough that any ecommerce manager considering launching a discount campaign should think well on the idea before proceeding. Once your company’s reputation moves from quality and service to low price leader, you’ll be drawing a whole new crowd and experiencing a whole different set of problems.

The cost of discounting: competing against discount pricing

Companies often get unwittingly pulled into a price war with the competition. Perhaps management doesn’t really want to discount, they just see no other way of responding to the advertised price cuts by others.

Here’s how to hold your ground:

• Highlight your value proposition. What differentiates you? Why is buying from you the best choice – price aside? When others lowball to gain business, your best bet may be to hold your ground and point out the obvious: low price seldom means the best value.
• Focus on providing a better customer experience. Be more helpful than competitors. Provide better service. Let your audience know you’re in it for the long run, not to make a quick buck.
• Use the foundational principles of optimization to increase sales. Discount pricing is just one way to obtain customers, and it’s usually not the best way. Optimization can shore up your sales without resorting to dropping your prices.

If you choose to employ discount pricing strategies and tactics, make sure your decision comes from a reasonable plan of action. Much of the time, discounting is based on reaction to the path others have chosen. Let the competition price itself right out of business. Just don’t follow them.

How to add value to your discounts

Don’t just follow the crowd when it comes to discounts and run sales for the sake of it. Instead, add value to your promotions to attract the right kind of customers and keep them coming back for more. 

1. Define what you want to achieve

Think about what you want to achieve with your discount strategy. Do you want to: 

• Improve customer acquisition
• Increase sales
• Earn repeat customers
• Get rid of unsold inventory

When you know what results you want to get, it’s easier to decide what type of discount to run or whether running a discount is the right thing to do. If you simply want to get rid of unsold stock, a flash sale can work wonders, but there might be a more strategic way to reach new customers. 

2. Discount the right products

Not everyone is going to jump at the chance to get your worst selling product at a reduced rate (there’s a reason it’s not shifted off the shelves yet, after all). Instead, think about your most successful products and whether a discount is the right way to go. 

For example, don’t run  BOGO sales on an exclusive product that customers aren’t going to want or need two of. On the flipside, do discount products that are fitting with the season, like academic books in the lead up to the new school year. 

3. Be strategic with your marketing

Where will you shout about your discount? Do you want everyone to have access to it or just a select few? Make sure the right people see it by sharing it in your email marketing campaigns, on the front page of your website, and relevant social media channels. 

Tinitell splashes their discount across their homepage with an eye-catching design. 

Do you really need to discount?

Before you hit “go” on your discount pricing campaign, stop and think. 

Will offering a discount help you reach your goals? Are you just doing it because everyone else is? What other strategies could you use that will get similar results? 

Discount pricing, handled incorrectly, can lead to the devaluation of your products in your customers’ eyes and teach buyers to wait for the next sale before purchasing from your ecommerce website. Discount pricing, done right, can help you launch special events and give sales a healthy boost. The difference is all in the planning. Before discounting, read back through this guide to check your motives. Look beyond the immediate impact of the tactics you’re about to employ to the potential after-effects.

Never employ discounts if your brand will suffer in the long term. When sales are so bad you feel forced to turn to discounting prices in order to stay afloat, your problems are much deeper than your pricing strategy.

The post The Definitive Guide to Effective Ecommerce Discount Pricing appeared first on The Good.

What is the key to growing your ecommerce revenue?

The obvious response is, “attract more customers,” but let’s not jump to conclusions. According to research from Adobe, as much as 41% of a store’s revenue comes from only 8% of its customers. 

What does that mean to you?

Making investments in attracting new customers and growing your audience is worthwhile, but the growth lever you should really be focused on is increasing the lifetime value of your existing customers.

How do you increase lifetime value? You get customers to stick around longer. In other words, you earn their loyalty through outstanding customer experiences.

There are many strategies you can use to increase customer loyalty. For example, you could double-down on customer research, create a membership program, or focus on delivering fast, reliable, pleasant customer support.

These are common approaches to creating loyal customers, but there’s one tactic you may not have thought about: presenting compelling offers immediately post-purchase. It might seem counterintuitive, but asking someone to buy from you again immediately after they make a purchase can be a simple, effective way to provide them more value and boost your revenue.

In this blog post, you’ll learn everything you need to know about post-purchase offers, such as:

• What are post-purchase offers
• The benefits of post-purchase offers for your store
• 4 examples of post-purchase offers done right
• The best practices for getting started with post-purchase offers

Sound interesting? Let’s dig in…

What Are Post-Purchase Offers?

Post-purchase offers are additional sales messages that are presented to customers immediately after they complete their purchase. These offers typically focus on items that will complement or upgrade the item that was just purchased.

You’re probably used to seeing a similar feature on Amazon labeled as the “People Also Bought” section. The key difference is that those CTAs are presented before you check out, whereas post-purchase offers get out of the way of that initial conversion.

For example, let’s say you’re buying a coffee machine online. As a bonus, the store might recommend that you purchase some coffee filters, a cleaning kit, or subscribe to receive a monthly delivery of their dark roast coffee beans.

In this scenario, everybody benefits from post-purchase offers. The customer gets access to other products that will improve their experience with the coffee machine – potentially at a discount – and the coffee brand increases the total value of that shopping experience.

“When you buy something and click on the buy button, you are at your most euphoric moment,” says Jordan Gal, CEO at Carthook, an upselling tool for Shopify stores. “That’s a good time to make an offer. If you can set up your offer in a way wherever it’s beneficial for both parties, then everybody wins.”

There are two different types of post-purchase offers: up-sells and cross-sells. With up-sells, customers upgrade to a more expensive version of your product. Cross-sells, on the other hand, invite the customer to only add an item to their existing shopping cart.

So, to keep our coffee example going, an up-sell would involve offering to upgrade the customer to a higher priced model of coffee machine, or perhaps sell them an attachment to also grind their beans. Conversely, a cross-sell would involve selling them coffee beans, filters, or other complementary products.

Regardless of how they are implemented, the main goal of post-purchase offers is to increase average order value without compromising the initial conversion. If you present your offer before the purchase is completed, you risk overwhelming your customer with information or an increasing total cost.

By getting customers to add more to their shopping cart after they make an initial purchase, you catch them when their brand affinity is highest and make it easy for them to make an additional purchase with confidence.

Why Post-Purchase Offers Need to Be Part of Your Strategy

Optimizing the post-purchase experience is vital to retaining customers and driving repeat sales. Here’s why upselling and cross-selling needs to be part of your game plan:

Reason #1: It’s Easier to Sell to Existing Customers Than New Ones

Don’t get me wrong, engaging new customers is vital for business. But stores are so focused on “filling the funnel” that they forget one crucial thing: there is an untapped well of revenue, referrals, and customer feedback right under their nose.

Your existing customer base represents your most significant source of potential revenue. In fact, it’s 60 – 70% easier to sell to an existing customer. What are your odds of successfully selling a new-to-file customer? Probably somewhere between 2% and 15%, if you’re lucky.

With post-purchase offers, you’re targeting the prospects most likely to convert. In fact, when 310 Nutrition started providing customers with post-purchase offers, they were able to get 30% of their customers to say yes to buying an additional item. 

Reason #2: It Boosts Your Store’s Revenue

Without post-purchase offers, you’re leaving a mountain of potential sales on the table. When implemented correctly, it’s a low demand, high yield tactic that can significantly improve your earnings.

For example, think about abandoned carts. If someone initiates and checkout process, but doesn’t buy, what should you do?

You should probably reach out and see if they have any questions or reservations, right? Share some social proof to help build trust and purchasing confidence. Perhaps even offer an incentive or a discount to get them over the finish line.

Doing this consistently tends to motivate as high as 30-50% of these “close, but no cigar” customers to come back and finish their checkout. But if you don’t contact them, you’re missing out on all of those potential sales.

Post-purchase offers are no different. If all you do is drop your new customer on a “thank you” page and send them a confirmation email, you’re missing a key opportunity to present them with a compelling offer when they are most likely to take advantage of it.

“If you don’t offer anything post-purchase, you won’t make any money post-purchase”, says Jordan. “But if you do, roughly 20% of those customers will buy. You’ll make more revenue, have a better average order value, a better return on ad spend, and a lot of your shoppers will be happy for it.”

Reason #3: It Creates More Loyal Customers

When implemented properly, post-purchase offers can be a great way to delight your customers and, as a result, increase their affinity and loyalty for your brand.

The key here is to make your post-purchase offers as relevant and valuable as possible. You are trying to find a mutually beneficial arrangement that helps them get more value out of their product while also increasing the value of their purchase for your business.

For example, if I purchase a grill, you probably don’t want to present me with a post-purchase offer for a tent or a backpack. Instead, you’ll want to highlight items like a propane tank, cooking utensils, or a recipe book. Equip me to have a better experience with my new toy.

By suggesting relevant, personalized post-purchase offers that add value to the customer’s shopping experience, you’re building rapport with them and putting them in an emotional state that makes them more likely to buy from you again or refer a friend.

4 Examples of Post-Purchase Offers Done Right

Now that we’ve covered the benefits of post-purchase offers, you may be wondering what this looks like in action. Here are a few examples of real-world post-purchase offers being used by some of the world’s top ecommerce brands.

1. Dollar Shave Club

Dollar Shave Club is a men’s grooming brand whose flagship offering is a razor and accessories to help improve the shaving experience. They have done an excellent job building a dedicated community of fans through their unique shopping experience. 

In the example above, you can see that a customer who buys one of their razors can also purchase additional products, such as post-shave cream, personal wipes, or a body cleanser.

Whether it’s a first-time buying experience or a reminder about their upcoming subscription delivery, Dollar Shave Club frequently uses post-purchase offers to help their customers get an even better shaving experience, which also boosts the company’s average order value.

2. BombTech Golf

Tyler “Sully” Sullivan is the CEO of an ecommerce company called BombTech Golf. In a world where high-priced equipment from stuffy, established brands reigns supreme, BombTech is bringing more affordable options to the public, without sacrificing performance.

Sully decided to try post-purchase offers as part of a campaign to launch one of his new products. Spoiler alert: it turned out to be their most successful product launch ever. 

Here are some high level stats about the campaign results:

1. They sold over $100,000 in a single day and $600,000 in the first month.
2. Their conversion rate increased to 45%!
3. Their abandoned cart rate went down 10%
4. About 8% of customers claimed the post-purchase offer
5. Their average order value increased by $60 (about 43%) over time

“Our average order value has gone way up,” says Sully. “Last year, it was about $140…and now it’s at $200. So it’s much more profitable, and that means we can actually spend more money on advertising to acquire customers and scale way faster.”

And the best part about all of this? Sully describes their post-purchase strategy as “set it and forget it.” Once they got the offers and the checkout flow dialed in, they knew it was profitable, so they put it on autopilot and moved on to the next project.

3. Kettle & Fire

Kettle and Fire is a company that makes nutritious and convenient bone broths and bone soups. They were an early entrant into the market, which meant they were getting lots of new customer, but still had room for improvement in terms of customer lifetime value.

As they continued to grow, someone from the marketing team noticed that customers who purchased a greater number of flavors tended to have a much higher retention rate. The more flavors they were able to try, the more likely they were to find one that they enjoy and want to purchase again and again.

So, the challenge for Kettle and Fire’s Director of Growth, Wilson Hung, was to find a way to make more first-time customers aware that they offered a variety of products and flavors. His first experiment was with post-purchase upsells and cross-sells.

“The first iteration, we had just one upsell and one downsell…and that gave us 41% higher revenue per visitor,” says Wilson. “For the checkout conversions, over the course of three iterations, we’ve seen an increase of over 140%. That’s a big factor.”

Thanks to post-purchase upsells, Kettle & Fire now has a 10% higher average order value…and they’ve done it without compromising their stellar conversion rate, because the offers are being presented after the customer has already completed their initial purchase.

Best Practices for Setting Up Post-Purchase Offers

It’s clear that post-purchase offers can boost sales and customer loyalty, but you need to have the right strategy to make sure they’re effective. It’s not as simple as presenting recommendations for random items or “best sellers” and hoping for the best.

To help you get off on the right foot, here are some of the best practices for adding post-purchase offer to your existing checkout experience:

Step #1: Choose The Right Platform

Technology goes a long way when it comes to optimizing the post-purchase experience. If you’re on a platform like Shopify, there are a variety of upselling platforms you can choose from.

However, not all upselling platforms are created equal. You want to make sure to select the right platform that gives you full control over how you want to set up your post-purchase offers. 

The tool we recommend is Carthook. This easy-to-install plug-in makes it simple to create compelling post-purchase offers that convert:

You can offer up to three cross-sell or upsell items once the customer completes their initial purchase. Carthook automatically populates the customer’s payment details using their previous purchase, so they don’t have to re-enter their credit card number or billing address.

CartHook also offers you great flexibility when it comes to styling your upsell, product, and checkout pages. There is no coding necessary — with its drag and drop UI, you can customize your pages thanks to ready-made templates, timers, and CTAs.

Step #2: Make Each of Your Post-Purchase Offers Relevant and Personal

Customers shouldn’t feel forced to buy upgrades or add-ons that they don’t want. To drive the best results, you need to make each upsell offer as relevant and personalized as possible.

“Personalization is non-negotiable”, says Carthook founder Jordan Gal. “You can’t just blast someone with a random offer and expect a certain percentage. That’s a recipe for getting customers to be mad at you.”

You need to consider things like purchase history, items in cart, and total cart value when developing your post-purchase offer flows. 

For example, if someone completes a purchase of a few spices or seasonings totaling $35, you might not want to present them with a post-purchase offer for a deluxe pellet grill that costs $400. 

Instead, you might want to pitch them additional spices with different flavor profiles, cooking oils, recipe books, or utensils/cookware to help them prepare their meal. In general, you probably want to keep the cost of post-purchase items no more than 50-100% higher than the customer’s original cart value.

Similarly, you might choose to only present post-purchase offers to repeat customers (Ex: Those with at least 2-3 previous purchases in their history) or customers with a total cart value above a certain amount.

“If you care about shoppers, you want to make your offers as congruent and relevant as possible”, continues Jordan. “That’s like sending random emails: it doesn’t work.”

Step #3: Use One-Click Post-Purchase Offers

Where you place your offer and the steps required to claim it will make or break the success of your campaign. Post-purchase offers should only show up once the customer has already completed their initial purchase and they should ideally require just a single click to claim. 

Making this process contextual and seamless will optimize the buyer’s experience, which generates a number of positive outcomes for your business.

“If you make additional offers in between the time they put something in the cart and checking out, you are endangering the sale,” says Jordan. “You are adding additional friction. So the balance is tricky.”

With post-purchase offers, you eliminate any risk of losing the sale due to information overload or second thoughts, while still maximizing the value of every purchasing experience.

Step #4: Track Your Results And Keep Experimenting

Lasty, it’s important that you regularly measure the impact of your post-purchase offers. Keeping an eye on performance will help you continue to test new messages and checkout flows to generate the best results.

There’s no one-size-fits-all approach when it comes to post-purchase offers. You’ll have to come up with a hypothesis to start and then monitor the performance of that flow to see if it’s making a significant improvement.

To get the most out of this strategy, you’ll want to have a library of post purchase flows that are customized to specifically address checkouts that meet certain criteria like:

• # of past purchases greater than or equal to X
• Total cart value above or below $X
• Completed purchase contains (product name)
• Purchase history does note contain (product name)

Much like email segmentation or ad targeting, there are numerous ways that you can customize who sees your post-purchase CTAs and which offers they are presented with. 

Don’t over complicate things, though. Start with simple offers on your best-selling products and continue to iterate and improve over time. 

Start Offering More Value to Customers Today With Post-Purchase Offers

Soon, post-purchase offers will become table stakes for ecommerce brands, just like abandoned cart emails, exit intent pop-ups, and retargeting ads. If you’re not taking advantage of them, you will risk losing that business to your competitors or alternative products.

And what’s not to love? When done correctly, post-purchase offers help your customers get more value out of your products while also generating more revenue and repeat purchases for your business. Sounds like a win/win to me!

The post Boost Your Customer Loyalty and AOV With Post-Purchase Offers appeared first on The Good.

Discounting seems like a no-brainer way to increase site sales. You certainly don’t have to go far to find this tactic. 

The prevalence of discounting implies this is an effective way to convert prospects into customers.  

But here’s the truth: 

While discounting feels like a good way to improve your conversion rate and increase sales, it’s actually draining your margins and tarnishing your brand.

The fact is, discounting is all over ecommerce because it’s the easy button — not because it’s the best way to convert customers. 

Think of discounts as reaching for fast food every time you’re hungry. Over 35% of Americans (roughly 85 million) do this on any given day. 

Yet, you don’t have to be a nutrition expert to know regular fast food is bad for you. Sure, it’s convenient, effective (it curbs your hunger), and tastes good. But all this is deceiving; while you’re checking the box for short-term needs, you’re damaging your long term health. Worse, if fast food becomes a habit, that habit will put you in a bad spot down the road. 

Discounts are the large fries equivalent for your business. 

They are…

• Convenient: You can have them up and running in hours, if not minutes.
• Effective: They often drive a short-term boost in conversion rate and sales.
• Pleasurable: Who doesn’t enjoy seeing a spike on their revenue chart?

But once you start on them, they’re a hard habit to break. And they’re seriously damaging to your business’s long term health.  

How ecommerce brands SHOULD think about discounts 

First, a quick clarification. We’re not saying, “never have a sale again.” Rather, we’re saying it’s better to incentivize purchases by increasing the value your customer receives versus reducing the cost of your goods.

Here’s what I mean: 

Leading with price vs. value: the difference between discount pricing and promotions

The difference between discounts and promotions is more than semantics: 

• Discounting refers to direct dollar discounts or taking a percentage off your price. Discounts encourage the customer to look at price as the main (perhaps even the only) influence on their decision. Think a “10% off your first order when you sign up here” popup, such as the one Artifact Uprising employs:   

• Promotions are anything other than slashing the price. Promotions offer additional value to the customers — something they wouldn’t otherwise receive. Done well, this incentive can be more compelling than saving a few dollars. Think volume and loyalty-based perks that gift “something extra.” For example, the way Supply offers a free year of blades with a full-price purchase of their razor…plus free shipping and returns (talk about building trust and busting objections!):

Both promotions and discounts have a similar, two-fold goal: prompt the customer to take action and create urgency that motivates customers to act right now. 

But discounting leads with price and scoring a deal, whereas promotions (done well) lead with the value of your product. There’s a big psychological difference for your customers, which means there’s a big difference for your brand and revenue, too. 

We’ll get into promotion options later on. For now, let’s look at the long term effects discounts have on ecommerce brands. 

Six painful, long term effects of discounting your products 

Note that none of the effects below are short-term. These aren’t surface-level pains. They’re not like the headache you get from staring at a computer screen all day — they can’t be fixed with an Advil, glass of wine, and good book. 

Rather, they’re the latent pains. They start off imperceptible, but they grow into something that devastates your brand. They’re like the herniated disk (think headache x100) you get from years of poor posture at your desk — insidious, painful, and expensive. 

They’re also widespread: they impact your customers, reputation, and your financial health. 

Financial Effects

1. Draining your margins 

Discounts hack into your margins and reduce your total revenue. You bring in less profit compared to other incentives such as a free gift with purchase or free shipping over a certain threshold. 

Need proof?

Profitwell’s Patrick Campbell dug into data from 4,200 subscription ecommerce brands and found higher discounts at purchase correlate with: 

• Lower customer lifetime value

• Lower satisfaction scores
• Higher revenue churn

Whereas promotions such as a free gift with purchase correlated with higher lifetime value compared to percentage discounts. 

Customer Effects

2. Training customers to expect (and wait for) steep discounts 

Kohl’s always has a sale going on, and it’s usually between 10 and 40% off. But over time, these frequent discounts desensitize customers to the thrill of a deal. 

Customers begin ignoring the 10% and 20% off sales and hold out for 40% off sales. This means when you run frequent discounts, you actually work against the very thing you’re trying to do. Instead of prompting action and urgency, you train customers to sit back and wait. 

True, discounts work the first time because folks don’t want to miss the deal. But when you get on the “hamster wheel” of discounts, you start creating fake urgency. When there’s always another deal coming right behind the current deal, the urgency evaporates. 

Think about it: when was the last time you paid full price for an item from Michaels or Bed Bath and Beyond? 

Sometimes, this fake urgency comes in a more malicious form — think countdown timers for sales/offers that don’t actually disappear if you miss the window. For example, when we reviewed Native Deodorant (check out the podcast episode), we discovered a countdown timer on their site. Only, when you waited it out, you could still sign up for the giveaway. 

That kind of fake scarcity/urgency is gross, erodes trust, and damages your reputation.

Another fake urgency tactic shows up on checkout screens. Think an “only 3 items left in stock!” or a “this price is only good for 15 minutes” memo with a countdown timer.

If that scarcity is true, it can be crazy effective. But if it’s false, it’s gross and erodes customer trust. There are much healthier ways to drive genuine urgency. 

3. Attracting less-than-ideal customers

Brands attract 7 types of customers:

• Just Looking 
• Bargain Hunters
• Buyers 
• Researchers 
• New Customers
• Dissatisfied Customers
• The Loyal Crowd 

While it’s worth looking at how you can convert all types of customers, discounts disproportionately attract the bargain hunter crowd — the “no discount, no purchase” customers who only buy when there’s a substantial sale.

When you consistently use discounts to incentivize purchases, you make “Bargain Hunters”  a larger portion of your customer base. These aren’t bad customers per se, but they’re less profitable than the “The Loyal Crowd.” So, the more you discount and attract “Bargain Hunters,” the more you cut into revenue. 

When you train customers to expect discounts and disproportionately attract coupon-clippers, you fast-track your transition to a deal buster brand. You condition customers to think, “this product really isn’t worth what they usually charge.” And that’s a hard perception to reverse. 

4. Lowering customers’ perception of quality

As Jon noted on a recent episode of our Drive & Convert podcast, once you’re a discount brand in the eyes of the consumer, you’re forever going to be a discount brand. It’s just not something you can easily recover from. 

Other Long-term Effects

5. Falling into a race to the bottom

When you compete on price, you enter your brand in a race to the bottom. Because price cuts are the easiest thing for you to implement, they are also the easiest thing for your competitors to match. You do 10%, competitors do 15%; you do 20%, they do 25%. 

While you and your competitor might both win a pricing battle here and there, you’ll both lose the discount war.  

Keep in mind: 

Other brands are discounting, but that doesn’t mean you have to copy them. You’ve no idea how that tactic is working out for them behind the scenes. They may have higher top-line revenue, but there’s a good chance their profitability isn’t as healthy as yours. And the company with a better profit margin almost always wins. 

6. Putting a bucket under a leaky pipe 

Discounts do provide a temporary lift in revenue, which is why brands reach for them. But they’re a short term fix.

If you’re losing customers because of poor traffic quality, bad copywriting, confusing site structure, or a lack of social proof, a discount might help you catch some of those dripping dollars. But discounting will never address the root cause — a bucket can’t plug holes in the sales funnel. 

Discounts aren’t ALWAYS bad. Here are two scenarios where we recommend using them

As a general rule, discounts are harmful to your brand. But there are two exceptions where it makes sense.

1. Securing a high lifetime value customer with a breakeven sale

If you discount an initial sale to secure a high lifetime value customer at a breakeven price, that’s a win. This customer will more than make up for it down the road. 

For example, let’s say you sell a product that has frequent repeat purchasers. If your customers stick around for at least a few months, then, on average, you can afford to break even or take a slight loss on the initial sale. Over time, you’ll come out way ahead. 

Look at Quip:

Quip sells electric toothbrushes and flossers. They’re confident in their product and they know their customer lifetime value, so they include your first replacement brush for free. This gets new customers into a high-value replenishment plan quickly. 

Quip takes the financial loss on the initial replacement just fine because most customers continue using their product. Over the long haul, the automatic replenishment plan generates above and beyond the value needed to cover the initial loss.

2. A true, infrequent offer once or twice a year

The other time discounting your prices is acceptable is when you run a true, infrequent (less than 3x per year) offer. 

For example, Bare Performance Nutrition only runs two sales a year. The founder, Nick Bare, explains, “We pride ourselves on not being a huge discount brand and only run two sales each year —  Black Friday and 4th of July (each being 20% off site-wide).”  Fun fact: Bare is a veteran, so the July sale is tied directly to his brand’s origins. 

In scenarios like this, you’re introducing genuine urgency at a frequency that won’t train your customers to wait for a deal. And that’s why it works.

Caveat: If you go this route, factor in your customer’s expectations when you select your 1-2 yearly offers. Depending on your product, customers may expect discounts on Black Friday, Mother’s/Father’s Day, Valentine’s Day, or other notable times of the year. In these isolated scenarios, not having a discount on expected days can make it hard to compete or hit your goals. 

Real world example: using promotions instead of price discounts

We’ve seen promotions work firsthand. Recently, one of our Consumer Packaged Goods (CPG) clients launched a limited edition product with a seasonal flavor and a reduced price.

So, this brand paired a reduced cost (not a discounted) item with a genuine urgency play (limited seasonal release). It was a smart move. 

Here’s what happened: 

• Average order value decreased slightly
• # of transitions went up 5%
• Average # of products per transaction increased
• Gross revenue increased by 9%
• Conversation rate increased by 0.5%

Overall, between 10 and 15% of total revenue for the quarter came from this limited release product. Other similar experiments you could run include:

• A bundle that includes a seasonal item at a reduced price 
• A reduced price on a seasonal item when the cart value exceeds a certain amount
• A “free seasonal item with purchase” offer when the customer hits a minimum cart value or adds specific products to their cart 

So, how do you move off discount pricing and start implementing healthier promotions like these? 

How to drop the scissors and move away from price cuts

When you’re used to running discounts, stepping away from them isn’t easy. Especially when it feels like they’re working, and especially when you’re reporting decent numbers up the chain. From that perspective, nixing discounts feels risky — even when you know it’s a smart long term play.

We get that, and we’re not recommending you cut your discounts cold turkey. 

Here are a few things you can do right away to take a healthier approach to discounts in the near-term, while also taking steps to wean yourself off of discounting over the long-term.

What to do right away: improve your existing discounts

1. Have one-time use discount codes

One time use discount codes help keep your brand off sites that aggregate coupons, like the one in the image below.  

Instead of having a universal discount code such as “FALL20,” use an ID that’s unique to each customer and only works once. 

2. Use link-based discounts

If you’re emailing out discounts, you can ditch the promo code altogether and opt for a link-based coupon. In this scenario, the customer doesn’t need to copy and paste a promo code. Rather, you deliver them (via the email link) to a checkout page with the discount already applied in cart. 

3. Hide the coupon field during checkout

Many brands show an open coupon field during the checkout process. But our A/B testing shows that, as soon as your customer sees this empty field, they want to fill it in. The implication is the customer isn’t getting the best deal unless they find that code. 

Once I see a box like the one below, I’ve left a checkout page plenty of times to hunt down a code: 

To ward off this behavior (and associated cart abandonment), hide this field by default. You could remove it altogether if you have no active discounts. Or you could display text that says, “Promo code” or “Referral code” like in the Sundays for Dogs example below. In comparison to an open field, this text only expands into a field when a customer clicks it. 

How to play the long game: move toward value-based promotions

To achieve steady, long term growth, you’ll need to move off price-centered discounts and onto value-centered promotions. Here are two ways to start doing that. 

Step 1: Review your promotions calendar

Pull out your promotions calendar and look at the next 3-12 months (whatever you have planned). Ask yourself what discounts you have scheduled and which ones you can swap out in favor of value-based promotions. Mark those. 

Step 2: Replace a bad habit with a better one. 

The best way to cut a bad habit is to replace it with a better one. As habit expert James Clear pointed out, “bad habits address certain needs in your life. And for that reason, it’s better to replace your bad habits with a healthier behavior that addresses that same need.” Otherwise, you’re poised to fall right back where you started. (Think fasting from Hulu only to binge on Netflix.) 

So, here are five promotions you can use instead of discounts to prompt action and create healthy urgency: 

• Free gift with purchase: Incentivize customers to make an initial purchase by offering them a complimentary gift, the way Thrive Market does in their new customer flow: 

• BOGO: Clear out inventory with a “buy one, get one” offer. You could do buy one, get one half off or buy one, get one free. 
• Free shipping: There’s a reason this is a key perk of the Amazon Prime program. And while it’s become a bit of an expectation thanks to Amazon, it’s still a compelling incentive — especially on bulky items, like furniture and mattresses, where shipping is usually an arm and a leg. Variations like free expedited shipping (e.g. 2-day over 5-day) or free shipping above a certain cart value (to protect your margins) are also effective.

One reason this works is consumers don’t like surprises. In 2020, a whopping 50% of shoppers cite “extra costs too high” (e.g. shipping) as the reason they abandon their cart. Offer free shipping the right way, and you’ll see higher conversions.

• Free returns: If customers are apprehensive about purchasing certain items, free returns can eliminate the fear of “but what if it doesn’t work out?” While this may increase your return rate, it’ll likely increase customer loyalty as well. Mattress brand Tuft and Needle pairs their free returns with a 100-night trial to persuade customers it’s no big deal if the mattress they choose doesn’t lull them to sleep:

• Loyalty programs: According to a Wirecard survey, 92% of consumers are swayed by rewards some or all of the time. So, reward loyal customers with a set of appealing perks that encourage repeat purchases. For example, how Mack Weldon offers tiered loyalty rewards. Their CEO, Brian Berger, explained to CNBC, “We have a permanent loyalty program. … And that gets us out of the cycle of having to think about promotions and retraining customers in a way we wouldn’t want them to behave.”

Keep in mind these five options aren’t even close to an exhaustive list. For more alternatives, such as product bundling and bulk promotions, check out these other resources from The Good:

• 78 tactics you can utilize to run winning sales promotions
• 10 tactics to drive ecommerce sales without discounting
• Top 7 ways to increase ecommerce sales (without discounting) 
• How to form great limited time offers

You don’t have to discount prices to improve your conversion rates 

Discounting isn’t the gold standard of ecommerce. It may seem that way because “everyone else is doing it.” But remember, that’s not because it’s a great business practice — that’s because it’s easy. 

Don’t be lazy; get creative with your incentives and lead with value, not price. You’ll improve your margins, strengthen your brand, and best competitors…all without slashing your prices. 

Want more insights like this one? Subscribe to our email list. Every Tuesday, you’ll join thousands of ecommerce leaders receiving strategy and tactics around: 

• Identifying what your customers want
• Getting site visitors un-stuck
• Improving conversions
• Earning more revenue, customers, and leads

The post Why Discounting Is Bad For Your Brand (And What To Do Instead) appeared first on The Good.

As you consider your options, the idea of offering discounts crosses your mind. It’s a common tactic for boosting ecommerce sales and generating additional revenue. Maybe running a sale will give your business the shot in the arm that it needs. 

Probably not. 

While it’s true that offering sales and discounts can provide a temporary lift in revenue, it’s ultimately not a sustainable strategy and will only provide you with short-term success. A better solution is needed. 

In this Insight, we’ll be providing you with 10 proven tactics to increase ecommerce sales without discounting. Here’s what we’re covering:

1. Why shouldn’t you be utilizing discounts? 
2. What are your options besides offering a discount?

Why shouldn’t you be utilizing discounts? 

On the surface, offering discounts seems like a perfectly fine idea. Many successful online companies have been using the strategy for decades, and it appears to be working for them, right? There’s an entire economy built around helping customers find the lowest prices. Honey, a discount-finding tool, was recently purchased by PayPal for a staggering $4 billion.  

So why are they such a problem? 

Three reasons. 

1. Discounting leads customers to think that you’re a discount brand. Instead of being known for quality products or outstanding service, customers associate your company with the lowest price. You become the ecommerce version of Dollar General, attracting those searching for bargains. When a customer receives a discount on their first purchase, you can be pretty confident that they’re going to try to get the same discount with every subsequent purchase. 

Do you really want to join other discount brands in a race to the bottom? Probably not. 

2. If you want to turn a profit, shoppers with a “no discount, no purchase” mentality are likely not your ideal customers. Discounts cannibalize your profits, leaving you with razor thin margins. If you want a healthy bottom line, you probably don’t want your primary customers to be bargain hunters. 

3. Discounting is a short-term solution to a larger problem. Ultimately, you need to figure out why your sales are slumping. In other words, where are the holes in your sales funnel? Is your website confusing? Are your landing pages or Google Ads ineffective? 

Leaning on discounting to help your business make it through a tough time is like putting a bucket under a leaky pipe instead of taking the time to repair the pipe. 

Clearly, you need strategies for increasing ecommerce sales without discounting. 

What are your options to drive ecommerce sales without discounting? (10 Tactics)

To increase ecommerce sales without discounting, utilize tactics like promotions, exclusivity, scarcity, and guarantees. These strategies enable you to boost sales without eroding your profits. 

Promotions 

While discounts seek to attract customers with lower prices, promotions focus primarily on offering something extra. Promotions create similar feelings in customers as discounts without the downsides. Discounting is simply reducing the price, and possibly devaluing your product in hopes of making up revenue through increased sales volume. 

Here are five examples of promotions you can implement:

1. Buy one, get one: If you have excess inventory, BOGO (free or half-off) is an effective way to increase customer engagement and generate sales. You can even stack the offer so that they get more when they buy more, like Beloved Shirts does:

2. Free gift with purchase: Offering a free gift with purchase can be a powerful incentive, giving customers the nudge they need to buy. And if the gift is a sample of one of your products, it gives customers yet another reason to buy from you in the future. Sephora knows this and often includes product samples for free with orders:

3. Free shipping: Ecommerce conversion rates are always higher when free shipping is included. No surprise there. There’s a reason it’s the cornerstone of the Amazon Prime program. If you want to see your ecommerce sales increase, give free shipping to customers, just like Bonobos does for customers in the United States:

4. Free returns: Offering free returns sets customers minds at ease and incentivises them to purchase. They know that they can easily return products if they have any issues. Yes, it will probably increase your return rate, but it will also increase customer loyalty.

5. Discount price threshold: Offering some form of discount or other perk for orders over a threshold amount can motivate shoppers to add more items to their cart, increasing key metrics like Average Order Value (AOV) and Customer Lifetime Value (LTV). Athleta offers free shipping on all orders over $50:

Exclusivity and Scarcity

Fear of missing out (FOMO) is a big consumer purchase motivator, and you can take advantage of it by utilizing both exclusivity and scarcity. With exclusivity, you offer bonuses to customers that they can’t get anywhere else, while scarcity highlights the limited availability of particular products. 

6. Loyalty programs: A loyalty program allows you to reward customers who are particularly faithful to your brand. Whether through special discounts on high-demand items or exclusive access to particular products, loyalty programs keep customers coming back again and again. Keenly aware of this reality, Amazon offers all sorts of perks to Prime members:

7. Displaying “limited quantities available”: Showing that you have a limited number of something in stock can create a sense of urgency in customers. They don’t want to miss out on the opportunity to buy. Etsy does a great job of increasing urgency on their product pages by showing how many items are in stock, as well as alerting customers if an item is already in someone’s cart. 

8. Show sold out items: Highlighting sold out items shows how popular they are, which can cause even more people to want them. Just be sure to give customers the option of being notified when the product is back in stock. Otherwise they may forget about it. Black Milk Clothing uses this technique with out of stock items:

Guarantees

Even though online shopping is ubiquitous at this point, customers still deeply appreciate guarantees. Almost everyone has had at least one bad online shopping experience, and guarantees go a long way in assuring customers that they’ll have a good experience with your company. 

9. Money-back guarantee: The greatest fear of most online shoppers is buying something, not liking it, and not being able to easily get a refund. Offering a rock-solid money-back guarantee can ease this fear and compel the customer to purchase. Fly-fishing company Orvis offers what they call a “Great Catch Guarantee”:

10. Service guarantee: Even broader than a money-back guarantee, a service guarantee assures your customers that you will do whatever is necessary to assure their satisfaction. Companies who offer outstanding customer service create customers for life, reducing churn rate and increasing Customer Lifetime Value. Bombas offers a happiness guarantee that gives customers every reason to purchase from them:

Play the long game and boost ecommerce sales without discounting

Constantly relying on discounts to boost sales is a losing game in the long run. Yes, revenue increases, but profits take a hit. What’s more, you label yourself as a discount brand in the eyes of many customers, and once you’re on that path it’s hard to escape. 

There are effective ways to increase ecommerce sales without discounting. By strategically leveraging promotions, exclusivity and scarcity, and guarantees, you can compel customers to purchase while still maintaining healthy profit margins. 

The strategies listed above are just one part of the Conversion Rate Optimization process. If you would like help optimizing your website for maximum ecommerce sales, request a free landing page teardown. 

A member of our strategy team will provide you with a base-level assessment of your website and identify potential areas that could be optimized to elevate your website experience.

The post 10 Tactics to Drive Ecommerce Sales Without Discounting appeared first on The Good.

They want products arriving at their front door within two business days (or less), and they don’t want to have to pay for shipping costs. 

Research has repeatedly shown that free shipping is one of the top purchase drivers for millennial-aged consumers, closely followed by free returns and same-day shipping. 

If your online business isn’t already offering free-shipping to its customers, you’re missing out on a significant opportunity to reduce cart abandonment and improve conversion rates on your ecommerce site. 

In this Insight we’re focusing on how free shipping can impact your customers’ purchase decisions, and how you can get the most value out of offering free shipping to your audience. 

Why Offer Free Shipping?

As a customer, it’s fairly obvious that the benefit to free shipping is it saves you money – at least it makes you believe you’re saving money – on your order. However, as a business owner you might find it difficult to understand the upfront benefits of offering free shipping.

For retailers, it’s important to consider both the short-term and long-term benefits. In the short-term, offering free shipping will likely lead to an increase in orders and a higher average order value (AOV), especially if you set a minimum order threshold that your customers need to reach before they “unlock” free shipping. 

60 percent of ecommerce businesses report that “free shipping with conditions” is their most successful marketing tool. If adding one more items to the shopping cart results in getting free two-day shipping, most consumers will do it. 

In the long-term, offering free shipping will benefit your business by increasing customer lifetime value, and helping you build a group of loyal repeat purchasers. Additionally, it can be a great way to maintain your competitive edge in the marketplace, especially if you’re operating in an industry that sells commonly available products, or even commodity products that compete heavily on price.

Here’s the thing: before you start running a free shipping promotion on your site right away, it’s crucial that you understand how to offer it in a way that delivers the most value to both you and your customers. 

How to Offer Free Shipping the Right Way

Based on our observations, the most effective free-shipping messaging incorporates a hint of marketing psychology to set the tone for shopping behavior. We’ve identified five key behavioral principles that you can utilize to directly influence purchasing decisions on your site. 

1. Reciprocity

Reciprocity is the social norm of responding to a positive action with another positive action. If someone does something for you, then naturally you will feel persuaded to do something for them in return. Using the influence of reciprocity to persuade customers to complete a purchase on your site is a particularly effective method for positioning your free shipping offer. 

Brand Example: In this example, Clevr Blends utilizes reciprocity to encourage customers to complete a purchase by promising to share 10 percent of their proceeds to aid in COVID-19 relief (see screenshot below).

This messaging is impactful because it plants a deep seed of brand resonance in the customer’s mind. Users are taking away a memorable impression. This is a unique purchase that extends beyond the value of the product, but towards a substantial impact in the world. They recommend 2+ bags of coffee to enable free shipping – implementing this minimum order threshold helps to raise their AOV, while also cushioning the revenue impact. 

2. Ingroup Bias

Ingroup bias is the tendency to favor a particular group above others. Businesses will often utilize ingroup bias to connect with their target audience on an issue or topic that pertains to their particular needs. 

Brand Example: In this example, Trade Coffee uses ingroup bias as a purchase motivator by specifically giving back to the independent roasters that sell coffee on their site. The messaging is niche, but attracts all coffee enthusiasts to support their “ingroup” community. 

Trade is taking advantage of the fact that their audience values independent coffee roasters and using specific related messaging to motivate transactions (with every transaction, Trade donates $2 to local roasters nationwide).

3. Framing Effect

The framing effect is a cognitive bias where people make decisions based on whether their options are presented with positive or negative outcomes. The framing effect is a simple but effective way to encourage consumers to take action on your ecommerce site. 

Brand Example 1: In this example, Revive Superfoods structures their messaging to play up the notion of convenience to heighten the likelihood of purchases. The benefit is positioned first, “Skip groceries!”. That benefit is towards the safety and security of the user, a compelling and thoughtful gain in today’s social climate. Additionally, they offer a 60 percent discount on first-time orders, as well as free shipping to further increase purchase motivation. 

Brand Example 2: Goldmine uses simple messaging to convey encouragement and increase purchasing motivation. The simple messaging has an underlying tone of encouragement that resonates with their audience. This exemplifies customer value so users feel more inclined to complete a purchase. Additional messaging on the homepage reinforces this notion of encouragement. 

4. Exclusivity Effect

The exclusivity effect relates to the idea that individuals want what they cannot obtain; if not everyone can have it, then naturally we want it. Businesses will often use the exclusivity effect to increase purchase motivation and attribute added value to their products/services.

Brand Example: In this example, Death Wish Coffee demonstrates a spin on the exclusivity effect to motivate users that have an account to purchase. The benefit is easy to retrieve, all you need to do is sign-up for an account through their site and you’ll “unlock” free shipping. 

5. Noble Edge Effect

The noble edge effect is when a business demonstrates social responsibility to incentivize purchases; typically seen as being genuine and transparent. The theory behind this principle is that consumers will place a higher value on your products if you demonstrate an obligation to ethical business practices. 

Customers with particularly strong moral aspirations and those with little product knowledge or expertise are shown to be particularly affected by this. 

Brand Example: In this example, YourSuper–an organic superfood company–shows how they value supporting their community by donating 100,000 units of product to health care workers to keep them healthy. Additional savings were also implemented as a part of this campaign to encourage customers to complete a purchase.

Consumers feel good about supporting companies that are committed to a positive ethical agenda, and this is an excellent way of building goodwill with your audience, especially if you have the financial means to do so without negatively impacting your business. 

It’s Time to Amplify Your Free Shipping Incentives

Using these five principles of marketing psychology, you should be able to craft a free shipping message that connects with your audience and motivates them to complete a purchase on your site. If you’re going to invest the resources and time into running a free shipping promotion, make sure you do it in a way that benefits both the customer and your business. 

Now is the best time to start testing different free shipping incentives on your site to determine what approach works the best. The five principles we covered in this article aren’t the only ones to consider or test. Do your research and start looking at how competitors in your marketplace are offering free shipping through their websites.

In the world of ecommerce where your target customers likely have an abundance of options to choose from, the perfectly crafted offer will be what sets you apart from the rest. 

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