Hi All,
Offering discounts for your online store can be a powerful weapon in your conversion arsenal, however, used without plan, and you can do significant damage to your brand or worse, become unprofitable.
In this post, we'll review some of the pros and cons of offering deals for your online store, look at some of the most popular ways you can use discounts to drive conversions and, of course, how to most effectively use them.
The Pros and Cons of Online Store Offers
Before we jump into some different ways you can effectively use offers to help increase customer loyalty and acquisition, let's first look at some of the pros and cons of utilizing offers for your online store:
Pros
- Easy and quick to implement.
- Easy to track.
- Increased customer acquisition.
- Increased conversions.
- Increased customer loyalty.
Cons
- Decreased margins and profitability.
- Possible brand damage.
- Decreased conversions outside of sale periods if you train visitors to wait for offers.
- Tendency to drive non-loyal (price driven) shoppers.
- Tendency to reduce average order size.
Who Are Offers Right For?
As mentioned previously, online store offers can be an effective tool for not only customer acquisition, but also for customer loyalty, however, it’s important to consider your overall brand strategy before you begin offering discounts.
If you want to position yourself as a higher end brand or if you have slimmer margins, you may want to consider sticking to customer loyalty type offers as oppose to weekly sales. On the other hand, if you have healthy margins deep discounting and daily/weekly sales might be better for hitting your goals.
Ultimately, you need to consider if offers and the type of offer is the right strategy for your brand. Regardless, building an online business will generally involve a lot of experimentation to understand what works best. The best approach is to choose a goal for every campaign and offer, start small and measure the results.
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