If you are selling a product online for £40/$50 or above below is an example why you should not discount your amazing ecommerce product at the front of your website. (drop shippers or lower priced items the below does not necessarily apply)
One of our ecommerce clients was adamant they run a discount campaign this month on one of their successful products because everyone else in their industry was beating them on price and they wanted a bigger share of the market. After all they have the best quality product and amazing customer service so by discounting they would attract lots more customers.
We did our best to convince them not to do it however they are the customer so we pushed the campaign live at the start of the month.
Over the past 12 months we have been working with them to build their average order value up which has resulted in sales jumping from £10,000 per month to £30,000 per month in sales on this particular product. The strategy has attracted the best customers they have ever had who are purchasing multiple times from them with less returns/refunds.
If you look at the data below you will see from the same period last month
- the number of sales has increase from 78 to 83
- the average order value due to the discounting is down from £269 to £209 (-£60)
- but more alarming is revenue is down from £21,018.60 to £17,406.85 (-£3,611.75)
Now this is by no means a ‘told you so’ to the customer. They are happy for us to share the results (anonymously) and we want you to not make the same mistakes we see so many ecommerce entrepreneurs and brands making.
The minute you start discounting you are in a race to the bottom. You start to attract the wrong type of customers and your problems grow because of this.
So if you have a great product what should you do:
- DO NOT DISCOUNT on the front of your website or in your advertising. You have a great product and customer service so the value is there for your ideal customers.
- Make your offer incredible value. What can you add to your product that has a low cost but helps your customer? A guide, local information, a blueprint, a short video series etc.
- Offer discount in your shopping cart as a one-time-offer for multiple purchases of your product. You have done the hard work and spent to acquire this ideal customer so now you can increase their order value.
- Offer complimentary products in your shopping cart again at a one-time-offer discount.
- Build an ‘After The Sale’ process that communicates with your customer to add value.
- Obtain feedback, testimonials or share more valuable information to add value to them
Do the above and you will grow your sales and attract more ideal customers. Discount and you are on the slippery slope to the bottom. Not to mention attracting the wrong type of customers clicking on your Facebook ads and messing that up too.
Wishing you success.