E-Commerce Promotional Strategy
Promotions are probably the single biggest lever in driving conversion. Showing that deep red price, the discount, the urgency of the countdown - these all motivate customers to buy like nothing else. Researching this article, a couple compelling reports bubbled up.
Shopify reporting that vendors are 8 times more likely to make sale using discounts
RetailMeNot finding that nearly 70% of customers said they made an incremental purchase after discovering a discount
My own testing and experience in retail eCommerce found promotions were incredibly powerful at driving conversion. Beyond that, an effective discount program can drive incremental sales, lift your average order value and drive deep customer loyalty.
More than likely you don’t need convincing to do promotions, more, you’re looking for ideas for optimizing promotions. This article outlines the best practices I’ve used in e-commerce, which should be closely followed by my article on promotional pitfalls.
Promotional Best Practices
Become flexible
Proofing and QA/QC
Use conventional offers
Revenue lifters
Show it clearly and urgently
Don’t make people guess
Find your peak periods
Promotional Strategies and Best Practices
First, let me state the obvious that not every strategy works for every business. You need to test what works for you and be ready to drop what isn’t. Adaptability and flexibility are key to running a strong promotional calendar.
Become Flexible
It comes across a bit zen, but being fluid and flexible is critical to performing promotions. Turning on a new promotion should be quick and predictable, and your technology platform has to support that.
Beyond the obvious desire to save manpower, being flexible prepares you for the inevitable retail emergencies. When inventory runs out on your promo, you may have to shift gears quickly. If a competitor drops a hot offer, you need to be able to pivot to combat that.
I went to my development team with a simple hypothetical. It’s Friday morning and the President has said we’re doing a surprise weekend sale. We have four hours to get it designed, tested and deployed. It took some work, but we built our systems and our team to be last-minute response ready, and it became another advantage we had over other retailers.
Get your team and your technology to a point where it can realistically go from promotional conception to full deployment in a day. It might be tough, but that’s eComm retail.
Looking for help becoming agile in eCommerce?
I consult on eCommerce operations and optimization, including your promotional strategy and team mechanics. Get in touch and let’s have a quick discovery call!
Proofing and QA/QC
Just as a promotion drives conversion, a mis-firing promotion can ruin conversion. A great deal of diligence has to go into ensuring the language and function of a promotion is correct.
Is the language universally understandable to people not in the company?
Does the promotion show up correctly everywhere from homepage to checkout?
Does the offer apply correctly on the purchase?
Once an event has been executed a number of times, it becomes cookie cutter and predictable. This is the goal and key to becoming flexible. Proofing tried and true events becomes quicker so more diligence can be applied to new opportunities.
For a previous retailer, we implemented a ‘future-travel’ for our promotional engine. It meant we could build weeks of promotions in advance and then test our website as to how it would like in the future. This enabled ideal testing and quality assurance as we were viewing the actual website, not some CMS backend or code.
Use Conventional Offers
People understand a flat discount, a buy more save more, buy one get one free, etc. These promotions are time tested and a customer immediately grasps the details. Web design and associated content should be evaluated by the clarity of the message.
We used the term ‘hair’ to describe the clarity of a promotion. If it had ‘too much hair on it’, that meant it needed to be rethought. If you need to buy a specific item, only in this size, only during these hours, while stock applies, it probably has too much hair.
I used to get product buyers bug me all the time why their promotions weren’t working online.
“Why does it work so well in stores?” I would ask.
The response I would get, “The sales team will walk customers through the offer.”
It was hard love, but a complex offer isn’t the website's problem. If you need people to explain how a promotion works, it’s probably a poorly designed sale. Your website doesn’t have the luxury of a trained team to bring clarity. It has to be self-sufficiently clear.
Revenue Lifters
A promotion is a discount, but it doesn’t always have to decrease purchase value. Relying solely on blanket discounts (save $x on this assortment) can lead to eroding margins and hit your bottom line. Some ideas to try that lift revenue:
Have a promo with purchase (buy x and get % off y) to drive attach rate
Have a threshold discount (x% off orders over $y) to lift average order value
These are great promotions to test. If your average order value is $750, then add a free gift for orders over $800. You might be surprised what people will add to their order to hit the magic threshold.
Show it Clearly and Urgently
If the product is on sale, show it. Show it on the collections page, product page, cart and checkout. Change the price, change the colour, add a ‘sale’ badge, do everything you can to communicate the sale and what it is worth.
If I don’t learn about it until I get to the product, I may never learn about it
If the cart doesn’t show it on sale, I may become anxious that I’m not getting the deal
Urgency is elevated through scarcity and time. Saying limited time only is the bare minimum. Ends this weekend! Give it some edge. Posting the dates of the event cleary ensures customers understand they have to make a decision quickly.
With one retailer, we always had two versions of promotional creative. One for when the event started, and one for when the event was ending. For the end of an event, we would tweak the colour and add a prominent ‘FINAL DAY’ across the creative. Urgency increases as time runs out, take advantage of that.
Advertising channels require a lot of diligence in order to optimize them for peak performance. In experimentation we had done, promotions with ads were more effective than the non-promo control. In the same mentality as the above point on showing the promo everywhere, if the customer is going to see the promo on the website anyways, you should leverage it in your add to take more customers from your competition.
Don’t Make People Guess
You want to reduce anxiety in shopping as much as possible. If a customer doesn’t understand or can’t see the savings, they can’t establish the value of the offer.
What looks more effective?
$1000 Or $1000 ($2000)
It’s not even a comparison. With one retailer, we saw sales lift almost 30% when strikethrough pricing was implemented. When we’d talk with customers about this, the answer wasn’t the slightest bit surprising. They’d say that without knowing the discount amount, they couldn’t tell if it was a good deal. What was worse, they would check the competition to see if they had the same offer to understand the discount.
Find Your Peak Periods
Conversion goes up the closer to the sale ending. I ran some hyper-urgent three day sales with same pricing on day one as day three - nearly double sales on the final day every time. We tested this at length and compared all kinds of events, it was always the same.
Two things this proved to me. First, the urgency accelerates towards the end of a promo, and secondly, customers aren’t as afraid of quantities running out as we might think.
Some rules of thumb (test this!):
Shorter events performed better than long events. If urgency accelerates towards end of an event, you benefit more from multiple small events rather than one long one.
End sales at the end of the day, not part way through the day. Generally speaking, you will have higher traffic and higher purchase intent at night in eCommerce. Midnight transitions are also better for tracking performance as it’s easier to evaluate an entire day than having to split it up in analytics.
Have last chance messaging and countdowns where possible. Adding a countdown clock on items, particularly in the cart for the final day is a big win.
I’ve often found that Sundays and Mondays to be higher converting days online than middle of the week or going into a weekend. This is one to test for sure, because it seems counterintuitive to classic bricks and mortar retail.
Promo Pitfalls
There are some serious downsides to promoting incorrectly. So before you get too far down the path on your new e-commerce promotional strategy, read up on the pitfalls.
If any of this is either overwhelming or encouraging, maybe we should talk? I consult on e-commerce operations and conversion optimization, so let me help!
