5 Types of Promotions Ecommerce Stores Should Offer

Did you know that 57% of shoppers say they would not have made a first-time purchase from a new retailer without a coupon? This means that if you’re not offering any discounts for your ecommerce store, you could be alienating over half of your potential customers! Coupons can also help you retain customers — 91% of coupon redeemers say they will revisit a retailer after being offered a coupon.

Convinced you need to start offering discounts for your ecommerce store, but not sure where to start? In this article, we’ll cover the five most common types of ecommerce promotions, as well as three strategies for how and when to implement these offers.

The 5 most common types of ecommerce promotions

These are the most often used and very effective email promotions and flash sales.

Dollar value discount

A dollar value discount, such as offering $10 off, can make customers feel like they’re getting “free money” rather than just saving it. According to one study cited by Entrepreneur, a dollar value discount can generate up to 170% more revenue and have up to a 72% higher conversion rate than a percentage discount.

You can make this discount static, or make it dependent on how much a customer spends, such as concurrently offering $10 off orders over $100 and $25 off orders over $150. The latter strategy can increase average purchase value by encouraging customers to add more to their carts to receive a bigger discount.

Percentage discount

A percentage discount can be versatile; you can choose to offer a certain percentage off of a specific product, or off of an entire order. You can use smaller percentage discounts to pique customer interest, while larger discounts (think 50% off or more) are good for liquidating inventory that isn’t moving otherwise.

Shopify recommends the following strategy to choose between offering a percentage or dollar value discount for individual items: If the item that you are discounting originally costs less than $100, use a percentage discount. If it costs more than $100, use a dollar discount. This strategy helps result in the most perceived value on behalf of the customer.

BOGO

BOGO stands for “buy one, get one.” One example of a BOGO discount is “Buy one, get one 50% off,” while another might be “Buy two shirts at full price, receive the third for $10.” This deal format encourages customers to buy additional items and spend more than they may have originally planned.

Free gift

Offering a free gift with purchase is another great way to boost sales. This is also a good way to move inventory that isn’t selling on its own by offering it as a gift. This gift can either be a surprise or a known item, though researchers from the University of Miami found that for certain industries, offering a mystery gift with purchase is more likely to prompt people to buy than ruining the surprise.

We recommend adding a free gift when a customer meets a purchase minimum. This encourages customers to buy more. And, as an added bonus, the Journal of Marketing found that people who got a product for free talked about it 20% more than those who paid for the item — free advertising!

Free shipping

Last but not least, free shipping can be one of the most effective types of promotions. High shipping costs are one of the main reasons that shoppers abandon their carts before completing checkout. While many retailers always provide a free shipping option, offering free shipping as a limited-time discount can be a great strategy for those who don’t.

According to Wharton marketing professor David Bell, customers find a free shipping offer more appealing than a $10 overall purchase discount, even if shipping costs would be less than $10. Requiring a minimum purchase to activate a free shipping discount can also help boost average order value. Just make sure you have the right ecommerce fulfillment strategy in place.

How to offer ecommerce promotions

Here are a few must-do steps you have to do first.

Build an email list

Email marketing can be a hugely effective tool for ecommerce businesses, but in order to send out emails, you need a list of shopper email addresses. Promotions can be a great way to encourage customers or potential customers to sign up for your email list or newsletter.

According to Adestra, 85% of subscribers to email lists signed up because they received a discount to do so. Make sure to continue sending special promotions to your email subscribers once you acquire them, too. In the same Adestra report, customers rated discounts in email as the biggest influence on their purchase decisions.

Reward loyal shoppers

Once you acquire shoppers, make sure to reward them for shopping with you over and over again. It costs retailers 7x more to acquire a new customer than it does to retain an existing one. Whether you choose to send exclusive discounts to your customer list or implement a more complex points-based loyalty program, rewarding customer loyalty with promotions can have huge benefits for your bottom line.

A study by Stitch Labs found that returning customers spend 120% more annually than new customers. With a number like that, your business can’t afford not to reward customer loyalty.

Given the immense benefits to be had by keeping your existing customers engaged with your brand over the long-term, it’s also a smart strategy to vary your messaging a bit, so that every email they receive isn’t an urgent discount or a special promotion. Come up with some blog post ideas that provide value to your customers in different ways—whether that’s through product comparison reviews, instructional tutorials, value-adding guides written by industry experts, or telling stories about how your product helps real customers through a case study campaign.

Evangelize your customers

You can also use promotions to help get the word out about your store. This can be particularly effective if your business is relatively new; Word-of-mouth marketing is vitally important for building a customer base. There are two main ways to reward your customers for spreading the word: social media promotions and referral promotions.

Social media promotions involve offering an incentive for customers to share your ecommerce website with their social circles by sharing or liking posts on Facebook or Twitter. For example, offering either 10% off or a free small gift when a customer retweets a specific tweet.

Referral bonuses are another great way to encourage customers to share information about your store with their friends and family. You can offer individualized referral codes for each loyal customer to share with their social circles.

When your customers’ friends use their code, both the original customer and the friend who uses the code will receive a discount. This encourages customers to share their codes and, more importantly, recommend your store to potential customers.

Conclusion

No matter what kind of promotions you offer your customers, discounts can be an effective way to drive customer loyalty, boost word-of-mouth marketing, and help your business grow.

To learn more about increasing conversions, building brand loyalty, and reducing shopping cart abandonment, download “The Ecommerce Guide to Getting (and Keeping) Customers.”