Pros and Cons of Using Online Offers For Your eCommerce Store.

Posted April 1, 2021

In Customer Service, eCommerce, Fulfillment

More often than not, eCommerce stores are tempted into offering deals, offers, and discounts as a sales tactic to attract customers and increase online sales. This gets especially so nearing the holiday season. Use deals haphazardly and without a solid plan and you might just end up damaging your reputation if you are unable to keep up with the deals. Once your reputation is damaged online, it is next to impossible to recover. So, effective use of special online offers is crucial to increase sales and customer loyalty for your eCommerce Store.

Pros and Cons of Online Offers

Undoubtedly, offers are a very effective tool for both customer acquisition and loyalty for an eCommerce store. However, you ought to consider your brand strategy before offering deals and discounts.

Pros

Easy to implement and track
Increased customer conversion, acquisition, and loyalty
Increase in sales during discount/promotion periods

Cons

Risk of damaging your brand reputation
Reduced average order size which in turn leads to decreased profit margins
Tendency to only get price-driven customers who may not really be loyal to your brand
Reduced conversions during other days when you aren’t offering any sale or discount

Should You Use Online Offers as a Marketing Strategy? Is Using Such Offers the Right Strategy For Your Brand?

If you want to establish yourself as a top brand or aren’t getting high enough profit margins, you may want to consider utilizing customer loyalty type offers for your eCommerce store.

If you are lucky enough to enjoy higher profits, you want to offer good discounts or daily/weekly sales to hit higher goals.

It requires a lot of experimentation to understand what works best for your eCommerce store. Start by setting a goal for every campaign and measure the results. This is the best approach to design your “discount/offer” strategy.

Types of Online Offers

Percentage Based Discounts are the most popular form of discounts used in the online marketing world. You may want to offer larger discounts, such as up to 20% or 30%, to drive sales or smaller discounts if you can’t afford to offer big discount deals.
Dollar Value Discounts are increasingly becoming popular in the eCommerce market, which involve using offers based on a dollar value. This is a smart way to convince customers to make a purchase, as they are under the impression that they’re wasting money if they don’t use the dollar value discount offer.
Free Shipping is one of the best tactics to boost eCommerce store sales and increase conversions. Statistics reveal that one of the prime reasons for shopping cart abandonment is the shipping cost.
Freebies are used as bait to attract customer attention. Offering a free gift with a purchase of specific value can be a very smart way to provide additional value to your customers. Use it strategically, and you can convince customers to increase their average order size. This is a smart tactic to get rid of an item that isn’t selling.

What Makes a Great Deal?

Shoppers are easily attracted to offers that save them money. Before making a purchase decision, they often shop for different offers in their effort to get their hands on a great offer. So what makes a great offer in real sense that will drive customer acquisition and conversions?

A great deal provides real value to shoppers while increasing your eCommerce store sales.
A good deal is one that is easy to use. For example, if you require your customers to input a code, keep it short, so that they don’t face any inconvenience.
A great deal is easy to understand and access. It will help if you create a dedicated offer-specific landing page to make it easily accessible to visitors.
A deal is of no use if shoppers aren’t clear as to how to redeem it. Make it clear whether it is automatic, requires a code, or is reflected in the price.
A great deal has No or Minimum Restrictions. It is important you are aptly clear with your restrictions.
A good deal is always accompanied by an expiry date. This will create a sense of urgency for prospective buyers and make it easier for you to track the campaign results.

Bottom Line

True, any eCommerce store can be tempted into using discount deals and offers to increase conversions. However, the reality is that discounts don’t always work for every online business. But this does not mean you should not use offers at all. A firm understanding of your brand and its goals can be your guiding light when it comes to offering discounts. Some experimentation with baby steps can help you utilize offers to reach your business goals and build customer loyalty.

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