Discounts are often an eCommerce brand’s quick and easy solution to promote both business and products and it might seem like a great way to position a business as having one of, if not the best, prices on the market. Right? Wrong.

Limiting your business to competing on price point alone means you’re always struggling to find new ways of dropping prices and if you keep dropping them, soon enough, the value of your business will drop with them. Running too many price promotions can be one of the biggest contributors to your decreasing sales figures and here are the things that make them ineffective and what you can do about it.

Always-on discounts

No sooner than you perform a simple Google search or scroll through a social media newsfeed, than you’re swamped by ads promoting discounted products. Being offered random % off day in and day out means consumers focus less on the brand and sometimes even the product, trading off quality in favour of a lower price.

Perpetuating this trend will lead to very low brand loyalty, as users will switch to another eCommerce store as soon as they find a better offer. What’s more, running price promos nearly all the time not only cheapens your products, seeing as they’re always being sold at a quarter or half of their actual price, but devalues the sales campaign itself because it becomes the norm rather than a special occurrence.

What you can do about it: 

Promos are most effective when they are run periodically, in sync with when your consumers are most likely to need your products so try to tailor your discounts based on what your audience is looking for and when. Let’s take a small business selling cakes. One category of shoppers you can easily and effectively target are people whose birthdays are coming up.

Targeting this particular group only, with a discount tailored for them, around the time they are likely to be in the consideration phase of the buying cycle will improve the effectiveness of your campaign, without negatively impacting the rest of your audience.

Advertising to everyone

Since we’re on the topic of targeting, let’s talk about the budget drain that are generic sales campaigns. We don’t need to look any further than the impression rates on our own ads to realise the huge number of ads people are exposed to every day. So much so, that we quickly develop ad blindness and don’t even notice the % and OFF’s anymore.

When your campaigns are generic, your ads, targeting and messaging are generic too. As such, your ads promoting the same type of products, at likely a similar price than every other business, have very little chance of breaking through the noise, and even if they do manage to get noticed, there’s very little incentive in a generic message for a user to click through to a landing page.

What you can do about it: 

Understanding who your audience is, when they buy your products and what each target group purchases is the long-term effort you ought to be investing in, not generic ads.

Having at least a marginal idea about your types of consumers, what they buy from you, when they buy it and what motivates them, will allow you to create individual campaigns that harness the power of those insights, ensuring you can create the tailored messages that not only break through the online sales clutter but provide consumers with actual incentives to buy.

Thinking about yourself not the consumer

When thinking about what products to include in a discount campaign, businesses tend to follow their own product line themes. So you’ll have this much off on kid’s clothes, that much of on women’s bags and so on. While that’s easy to do, it’s not really all that effective, as it’s taking us back to generic territory.

What’s more, it may not be how people buy your products. Parents may look for a variety of things, from clothes to school supplies, which can easily be grouped into a “back to school” type sale, so creating separate campaigns for each category will be less effective than grouping them into a single one.

What you can do about it: 

Sometimes we discount products to get rid of them, they’re called clearance sales and it’s the only time your campaigns should be a mishmash of things. Grouping products into themes other than the menu in your eCommerce store gives you a topic to talk to your consumers about, an audience to target and a tailored message.

While a back to school sale might be easier to put together, other categories might be a bit trickier to group. Our small cake-making business in the first example could, understandably, struggle with coming up with themes based on which to group their products. Enter a good understanding of your consumers.

When you routinely analyse customer behaviour, you’re likely to gain the insights you need to group your products effectively. If you display the nutritional value of your products on your website, you may, for instance, find that a percentage of your shoppers buy low-sugar cakes, giving you the opportunity to create a No-sugar Month sale, where you offer a larger variety of sugar-free products targeted at the demographic groups who’ve shown the most interest in this type of product.

Too many choices

We often assume that the more options people have, the more likely they are to find something they need and buy it. This is one of the reasons we often see dozens of products on sale, even within the same product category.

It’s quite surprising to see people are still running with that strategy considering it’s been proven wrong over 16 years ago. That’s right, in 2000, psychologists Sheena Iyengar and Mark Lepper published a study that analysed the response of shoppers when presented with a choice of 6 gourmet jams versus a selection of 24.

While the interest in the products was higher when presented with the larger selection, the study showed that, when it came to purchases, only one-tenth of those who saw the 24 jams were as likely to buy as those who were presented with the smaller selection.

What you can do about it: 

If you understand what specific consumer categories are interested in, when they’re more likely to buy them and you’re are able to group products into a specific theme or themes, you can easily create multiple sales campaigns, consisting of a smaller product selection, allowing you to effectively target audience groups and significantly shorten the consideration phase of your customers’ buying process.

The Bottom Line

While it might seem like low prices make a great selling point, the eCommerce market is saturated with businesses who are adopting the same strategy and, when you have hundreds of brands competing on the same angle, consumers begin to differentiate them based on other attributes.

Learning to use price promotions as a communication tool not just a method of clearing old stock, will significantly improve not only the campaign’s effectiveness but will support you in creating brand loyalty and an exciting brand experience for your consumers.

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