BENEFITS OF CUSTOMER ACCOUNTS & DISCOUNTS
As members of the eCommerce industry, we are constantly searching for ways for our clients to boost their business and create loyalty around their brand. One strategy we have been researching is the power behind customer discounts and the use of customer accounts. Join us as we break down the benefits of these two features.
The benefits of Discounts
Let’s talk about why even bother creating discounts. Apps like Honey are making it easier for loyal customers and new customers to save at every corner. Why not keep them around with offering a customer account with your business, making it even easier to shop on your site?
Though a seemingly daunting task, even a small discount can carry a long way.
Attract new customers
Connecting with new customers is usually a top priority for budding businesses. 92% of consumers in the U.S. used coupons when making purchases last year. In offering discounts in exchange for account creation or other incentives that benefit you, users are more likely to explore your store and pick up a product or sign up for a service, if anything for the curiosity around the brand and the potential of receiving positive reinforcement for stopping by.
Build retention and loyalty with current customers
Loyal customers are as valuable if not more so than first-time customers. Your loyal customers are where word of mouth recommendations thrive, as well as the safety and security of knowing that these same customers will be back with more business in increments of time, whether it be days, weeks or even months. Offering an incentive as a thank you for their loyalty will cement those relationships with ease on both sides of the transaction.
Boost Sales
In a study completed in 2012, researchers found that coupon recipients who received a $10 voucher experienced a 38% rise in oxytocin levels and were 11% happier than those who did not receive a coupon. Not only are your discounts boosting sales, but they’re also boosting happiness levels within your customers! Use the power of oxytocin and the idea of cheap or free to rake in sales when you might need it most.
Move Old Inventory Fast
For some businesses, especially those who operate in a product-based industry, find themselves ever so often with a surplus of inventory. One of the faster ways to move the inventory out of the store and into the hands of customers is through significant discounts. Offer a discount, or pair the excess inventory with another product if you have reached the point of simply giving away said inventory.
Examples of Discounts
Now that we better understand the benefits of discounts, how does one determine the type of discount to offer? While we wholly encourage creativity and the decision to create something that is unique and eye catching for your business, here are a few traditional examples to catalyst your own ideas.
Free shipping
Who doesn’t love free anything? Free shipping, over anything, might be one of the strongest driving forces behind first-time purchasers as well as the loyal customer. One has a hard time denying themselves free shipping, especially if the order is filled with desired,must-have products. If you choose to extend the free shipping to outside of your state, or even your country, you open opportunities to expand your business outside of your typical realm of operation. Who knows- someone in Hungary might love your soaps and invest in the entire line just because you offered free shipping. Obviously, operate within your means, but this type of discount is a great starting point for testing the effectiveness of discounts on your client base.
BOGO (Buy One Get One)
Another effective tool when it comes to moving excess inventory as well as client recruitment, the BOGO, or Buy One Get One method is heavily employed in the retail and food service industries. For many, BOGO is presented with an assortment of “get one” offerings, but typically are found as “get one free” or “get one half off.” Clear out inventory in no time with this method.
Seasonal discounts
Seasonal and event related discounts are popular amongst most brands. Think of “seasons” like tax-free weekend, Christmastime, or even birthdays if you operate from the individual perspective. Seasonal celebrations can inspire customers to splurge for that gift for the special someone, or perhaps just themselves. While it’s just fine to follow along with general seasons, we always encourage exploring holidays or seasonal celebrations that play outside of Hallmark Holidays. Think days like “National Pet Day” or “Saturnalia” if your client base is of a paganistic persuasion. No matter what you do, do what best fits the interest of your customers.
Volume discounts
A popular discount amongst retailers, the volume discount is a great “ the more you buy, the more you save” incentive. It essentially tells it like it is - buy X amount of product, get X dollars or percent off. The more they buy, the greater the savings they see, while you watch inventory figuratively fly off the shelves.
Prepayment discounts
Prepayment discounts, more commonly known as pre-orders, are commonly used amongst hospitality brands as well as the video game industry. In this case, users are able to pay for a room, or a video game, at a discounted rate, only on the condition that they receive the product at a later date, such as your projected release date. This strategy is a great tool used to generate hype around your upcoming product or service, while also projecting success at an earlier stage thanks to the response of your customers. However, should you choose to follow this route, we recommend ensuring that you are able to meet the demand. While having extreme success can be appealing, the downfall from not being able to meet demand far outweighs any potential success. Make sure to set realistic goals so as to not over or underestimate.
Bundled Discounts - buy these products and receive this product for free or for x%/$ off.
Bundle or Kit discounts are great ways to upsell products and sell more products at once. This bundle or kit could take your client on a journey through your brand, or lead them on a relaxing or fun evening alone or with friends and family. Combine your bundle or kit with a particular season or holiday to further incentivize your offerings.
The benefits of Accounts (for your users)
Now that we have addressed the benefits of customer discounts, let’s take it a step further by exploring the benefits of customer accounts for your returning and loyal customers. We understand that offering a customer account is not possible for everyone; operating on a platform that can support a customer membership base can be difficult and expensive. It requires brands to host their information on a platform that already offers this service, or is able to integrate a third party platform to achieve said goal. With that said, if this is the next step in your wheelhouse, then by all means continue along. If this is not possible for you yet, take the next section as a template for any future investments.
1-Click Pay or Stored Payment Info
With customer accounts, users are able to make shopping even faster and easier, with the help of stored payment and shipping information. If your website allows for features like Google Pay, then those users who have 1-click features such as Google Pay integrated to their smart devices are able to buy your products in seconds. Look to brands like Amazon or even your local grocer or retailer for examples on how this feature works.
Loyalty and Rewards Programs
We’ve already acknowledged that humans thrive on positive reinforcement - behold, the discount. So you’ve lured in a new customer with a first time account creator’s discount of 30% off. How do you keep them coming back? Offerings of discounts with each purchase are most likely not possible, so what can we do to continue feeding positive reinforcement with each purchase so they’ll keep coming back? Enter the loyalty or rewards program. Depending on the platform, let’s say Five Star, users are offered points that build up to earning rewards that are exclusive to users who hold accounts with a particular brand. Once that user reaches a certain threshold, they’re rewarded with a discount or free item. If you’re able to deliver that kind of reward on a consistent basis, we recommend exploring this option.
Saved order history
It’s a bit redundant to state that humans are habitual, predictable creatures. However, the ability to understand how your customers interact with your brand is integral to your sustainability and success. Introduce a saved order history feature and your users now have the available option to bookmark your site and return to what’s familiar. We see this as an extremely popular feature amongst service industry brands, such as pizza delivery or wine distribution. Combined with single-click or stored auto pay, you’re on the right track to quick ordering and an even faster payout on your end.
A “ You May Also Like These” Feature Section
With access to user shopping behavior and purchase history, an opportunity to keep said users in your site longer awaits. Brands who use the “You May Also Like These” related products feature, experience a noticeable, positive impact on sales. Not only are users able to find products they might also enjoy, you are able to cross promote and possibly move inventory sooner if it’s needed. A win on both sides. Note: This type of feature, we feel is worth it to be available for guest users as well as account holders, though we might be speaking from an account holder perspective at this time.
Conclusion
At GSATi, we are always working to grow and innovate as the industries ebb and flow around us. Our hope is that we inspire that same sentiment within our clients as we work with them to grow their business. The decision to take steps and act in ways that benefit both the brand and your users demonstrate that your passion exceeds profit. Take these examples of benefits that are mutually rewarding and let them guide you on your first journey through discounts and accounts.
If you need any assistance, don’t hesitate to contact us.
