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E-Commerce Promotions 101: A Beginner’s Guide to Creating Successful Promotions

Sales promotions are nothing new. They’ve been used by traditional brick-and-mortars for over half a century to increase consumer demand and boost sales.

But promotions have also become an integral part of E-commerce where a growing number of brands are using this technique and seeing great success. They’re especially popular among millennials with over a third (34 percent) looking for online coupons each week.

When done correctly, E-commerce promotions can help you increase exposure, grow your customer base and maximize your profitability.

In this post, we’ll discuss the basics of creating successful promotions and providing an excellent experience for your customers.

Choosing a promotion

At the end of the day, you have one primary goal. Persuade users to open your app/website and ultimately make a purchase. So the techniques and strategies you use should all be executed with that end goal in mind.

With that being said, here are some specific types of promotions that can provide the incentive needed to bring more users to your app and prime them to make a purchase.

Percentage based discounts

This is perhaps the most classic of all promotions. It works because it’s so simple and straightforward. Percentage based discounts also don’t include any actual prices, so customers aren’t thinking about the exact amount of money they will end up paying.

So even if you’re selling a high-priced item, it will still seem like they’re getting a bargain. In turn, this can reduce much of the friction involved in online shopping and keep customers’ minds focused on the fact that they’re saving money.

One option is to offer a percentage based discount (e.g. 20 percent) off on certain products within your E-commerce store or on everything storewide. Another is to offer varying discounts based on different factors like how much a person spends, customer loyalty, and so on.

Dollar off sales

This is another wildly popular promotion and for good reason. Customers tend to respond quite favorably to it.

In fact, Craig Simpson, author and owner of Simpson Direct, Inc. discusses a study that compared the results of a campaign that offered customers a $50 coupon on outdoor gear versus a 15 percent off coupon. It turns out that the $50 off generated 170 percent more revenue and had a conversion rate that was 72 percent higher than the 15 percent off.

Simpson states, “The authors of the study believed the $50 off coupon was of higher perceived value. They also surmised that the $50 off did better because it didn’t require buyers to do any math. They saw immediately what their discount was and it sounded good to them.”

This is a great point and shows how effective dollar off sales can be. It also shows the benefits of experimenting with different promotions to see which ones have the biggest impact.  

Free shipping

Here’s another promotion that many shoppers find attractive. A study by the e-tailing group even found that this was the number one most important feature when making a purchase from a website with 73 percent of respondents favoring free shipping over anything else.

There’s just something about not being bothered with shipping that strikes a chord with most people. So this is certainly something to consider.

Now there are two ways to approach a free shipping promotion. One is to offer it on all purchases across the board. The other is to only offer it once a customer reaches a certain threshold. For instance, you might only offer free shipping on orders of $50 or more.

While both are effective, the latter is a nice way to encourage customers to increase the size of their purchase.

Receive a gift with a purchase

This is a great way to provide additional value with a purchase and can make visiting your app seem much more enticing. Keep in mind that this doesn’t need to be anything over the top, and even a small gift can be enough incentive in many cases.

You could even give away a digital product that’s of zero cost to you such as an eBook, digital tool, etc.

Remember that the promotions listed here are just the tip of the iceberg. For more ideas, check out this post from The Good that features 80 promotional tactics in detail.

Using the right channels

At this point, we know about some of the most effective E-commerce promotions. But how do you cast the widest possible net and ensure that prospects actually see your promotions?

It’s all about using the right channels for distribution. To reach out to your audience in an optimum way, there are two channels External and Internal. Here are some ways that tend to work best under an External channel:

  • Email – This is a great option if you already have a built-in audience and a sizable number of subscribers. You can get your promotions in front of a lot of people in a short period of time at little to no cost. Most email marketing platforms like MailChimp allows you to create professional looking emails where you provide the details of your promotion and include a link to your app or desired page on your website.
  • Social media – This too demands a fairly large audience if you’re doing it organically and simply displaying your promotion to existing followers. Nonetheless, the response rate can be significant.
  • Blog – Although less conventional, this can also be an effective way to notify prospects when a promotion is underway and provides added incentive to check your blog regularly.
  • Paid advertising – One option is to use pay-per-click advertising on platforms like Google AdWords and Bing Ads. Many social networks such as Facebook, Instagram and Twitter now offer paid advertising as well and allow you to target narrow segments of the population.

The other approach of doing E-commerce promotions effectively is via an Internal Channel. Let’s have a look at some of the methods:

Personalizing the app for the specific promotion

Another aspect of creating successful promotions is personalizing them.

A 2015 study by Marketo found, “78.6 percent of consumers said they are only likely to engage with a brand using coupons or other offers if those promotions are directly tied to how they have interacted with the brand previously.

These days it’s not enough to just offer a deal or discount. You need to create a customized experience that’s specifically tailored to each individual person.

This can be done in a few different ways, but one of the most potent techniques is to personalize your app for the specific promotion once a user opens the app. Here’s an example-

Say that your promotion involves a percentage based discount where you’re offering 20 percent off for buying a certain product. You would want to ensure that a user is prompted with that exact promotion once they open your app. To do so you would need to configure your promotion to match the format—in this case, 20 percent off.

Another way to customize the user experience is to use segmentation where you define and create complex user segments for customized promotions. You can create groups based on user attributes like age or geographical location or actions like spending patterns and engagement.

You may also want to modify the copy and use different versions of font, color, language and copy variations for hyper-personalization. This way users will have a fluid, streamlined experience and receive promotions they absolutely love.

Following best practices

Finally, it’s important to discuss a few key components that will increase your chances of success, while ensuring the highest possible ROI. After all, what’s the point of running a campaign like this if your ROI is abysmal?

One of the most crucial things to remember is that a promotion should be a win-win for your customers and for your business. So you’ll want to examine your current profit margins and use that to determine what’s feasible and what’s not.

For instance, offering 15 percent off on a particular product might be completely viable but offering 30 percent off storewide might not.

When it comes to your branding, you need to ensure that it’s consistent across the board. It’s important that the aesthetics, fonts and the overall copy of your promotions reflect your brand and aren’t generic in nature.

Many experts will also tell you that it’s smart to keep your promotions fresh by mixing it up and not using the same one for an extended period of time. Instead, try rotating them periodically and capitalizing on seasonal trends such as holidays.

Not only does this keep promotions interesting for your customers, but you can also keep capturing more data to determine which ones are having the biggest impact.

Getting the most from your promotions

Online shoppers have a lot of different choices and often several brands vying for their attention at once. You can effectively differentiate yourself from the competition and provide an incentive for buying.

It can be promotions, served on a specific day, offered to the right user segments at the right time. For example, you can define user groups based on monthly salary, spending pattern, needs, etc and make a list of customized promotions for each of these groups. Create a list of generic promotions for festivals, special events for an entire quarter and schedule features for the segments in one go. You’ll be able to sit back and be at ease while the promotions are systematically rolled to your users.

While there are multiple ways to go about this, E-commerce promotions are one of the best pound-for-pound. If you’re brand new to this process, following the tips listed here should help you get started on the right foot and greatly increase your odds of success.

Can you think of any other types of promotions that could have a big impact? Please share your ideas:

 

Image Credits
Featured image: Artem Bali / Pexels
In-post image 1: cuncon / Pixabay
In-post image 2: bruce mars / Pexels

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