Pushing For More Sales: Purchase Incentives To Win Over Buying Customers

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If getting solid sales seem like a battle you’re not likely to win, why not mix things up by offering great incentives to attract buying customers? Discounts, coupon codes or free shipping, these exciting deals are bound to be a hit among customers!

Let’s face it, sometimes no matter how hard you work on your marketing campaign to attract buying customers, the waiting game is affecting how you do business. This is especially problematic for people who are venturing into the eCommerce industry for the first time. If sales have been pretty bleak and your competitors are eating a large chunk of market share, your business is in real danger of being left behind.

The good news is, there are ways to increase sales while you wait for your marketing campaign to take effect. Offering incentives is one of the most effective marketing strategies on the web. From giving small discounts to offering free shipping, these incentives not only boost sales, it also help cultivate lasting relationships among customers.

According to ILoveCoupons, a leading Australian-based coupon site, more Australian  retailers are reporting soaring online sales figures in 2012,all because they joined the online coupon revolution.

With a reported 30% jump on online sales, ILoveCoupons’ CEO Dominic Gluchowsk attributes the glowing sales increase on retailers seeing the value of offering great discounts to their customers. Incentives such as online coupons and discounts dramatically increases customer base which leads to increase in online sales.

“At the end of the day this is great news for consumers, who reap the rewards of unbelievable savings, while shopping at their own convenience; anytime, anywhere.” Mr. Gluchowsk said.

The latest National Australia Bank Retail Sales Index clearly shows a dramatic increase in online retails sales as well, with 27% increase in the 12 months to November. All these numbers point to one thing: purchase incentives are effective strategies that draw customers in and improve customer satisfaction.

However, with no definite plan for your pricing strategy, you could end up losing more if you offer purchase incentives. In this post, we will discuss some of the best ways to reward customers without being broke!


Offering purchase incentives like coupons is an effective way to increase sales for small online businesses. Unfortunately, not a lot of business owners are keen on offering any type of purchase incentives because of fear that they could face substantial loss that may result in closing shop. This couldn’t be further from the truth, eCoupons and other purchase incentives are proven marketing strategies that not only enhance business’ performance, it also helps increase the level of customer satisfaction.

Couponing has hit the mainstream market after the show “Extreme Couponing” went on air. The show was deemed by shopathome.com’s founder, Marc Braunstein as revolutionary because it spread awareness that with a little effort, shoppers could save a lot of money through coupons.

The show sparked total pandemonium among bargain hunters in the US, leading coupon aggregation sites like RetailMeNot and shopathome.com to achieve unprecedented growth shortly during the first season of the show.

To illustrate how couponing has helped increase online sales, Ipsos conducted a study for RetailMeNot.com. The study indicates that there is a 23% increase in online coupon usage in year over year for three months prior to November of 2011. Sales connected to coupons and codes also increased on other merchant sales with a jump of 82% for the same period.

In the US, more than 1.75 billion coupons were redeemed by consumers during the first six months of 2011 according to NCH Marketing Services. That’s an 18% increase compared to the first half of 2009!

Read more about the benefits of eCoupons from a 2011 commissioned study by Forrester Consulting on behalf of WhalseShark Media on The Impact of Online Coupons and Promotion Codes here.

All these statistics show two things. First, online shoppers love a good deal and couponing offers the best of deals and two, coupons as an incentive, helps increase business revenues and profits immensely.

How To offer eCoupons to Customers

eCoupons work the same way as traditional couponing we all love, except, you don’t need to spend hours collecting and cutting coupons from the dailies.

eCoupons a great purchase incentive because it is very easy to implement. As long as your eCommerce site features a shopping cart program, you can encourage customers to take advantage of this exclusive promo. Customers simply need to enter a coupon code during checkout. The coupon code is composed of a series of numbers and letters integrated within the shopping card software to apply the discount amount set for specific purchases. In terms of dispersing eCoupons to customers, here are the most popular ways to do it:

Loyalty Programs: Give repeat customers more incentives, issue eCoupons after they made a set dollar amount or they completed a specific number of purchases. Offering eCoupons as part of your loyalty program motivates customers to make more purchases each time.

Reward For Return Customers: Got customers who buy once and never come back again? Offering eCoupons is a great way to win back customers. You can add the coupon code once the customer checks out or by sending the coupon via email once you confirm their order.

Sign Up Promo: Convert new customers to avid buyers by offering exclusive deals if they sign up for membership! You can create a system that tracks down all new members and offer them one or a set of eCoupons so they can start shopping immediately.

Upsell, Cross-Sell:eCoupons can also be used to upsell or cross sell products to existing customers. For example, you can offer coupons for mobile phone cases or SD cards if your customer just bought a mobile phone from your eStore.

Subscriber Incentives: You can use eCoupons to reward customers who signed up to your weekly/monthly newsletter. By offering great incentives to subscriber signups, you will build a great contact list which may lead to future sales.

There are a wide range of ways to offer eCoupons so be creative! Remember, each company has different needs in terms of attracting customers so make sure you develop a compelling marketing scheme to disperse eCoupons to your target audience.

Special Discounts

Another popular way to reward customers online is by offering discounts on specific products or services. Just like eCoupons, discounts are a strategic way to increase sales, attract new customers and maintain high level of customer satisfaction from old customers.

Advantages of Offering Discounts to eShoppers

Customer discounts are quick ways to draw buying customers into your store. More than increasing sales, offering discounts or any other incentives for that matter, helps establish better reputation and retain existing customers. Below are other benefits of offering discounts to your customers:

Offering potential customers discounts on purchases is a way to quickly draw people into your store. Anytime you tell a customer that he can save money, you’re likely to get his attention. Discounts don’t only help your shoppers; they also help your business. From increased sales to improved reputation, discounts may be that one ingredient that can bring business success.

Increase Site Traffic: Most shoppers can’t resist a great deal. More people are likely make a purchase if you put emphasis on discounted items. Even better, offering discounts for a limited time only creates a sense of urgency among customers, increasing the chances of people rushing to your store to take advantage of a great deal.

Increase Sales: Because no one can say no to sale items, discounts help increase online sales. And these sales are not only limited to products with discounted prices but also items that are offered at regular rates. Why? Because buying discounted items meant customers have more room for buying other items in your store. For example, say you sell streetwear for women online and you just gave large discounts on all dresses from your collection. Customers are likely to take advantage of the discounts but they are also likely to purchase accessories like belts, cardigans or skirts to go with their other purchases!

Make Room For New Products: For multi-product businesses, offering discounts on slow-selling items is a sure-fire way to speed up sales and then free up some room in your inventory for new items. Put the offer prominently on your homepage to catch the attention of customers right off the bat.

Improve Business Reputation: Offering discounts is also an effective way to improve business reputation especially if special discounts are offered for the elderly or those enlisted in the military. By showing customers that your business provide more value to those who are in very difficult situations or those who may be having financial troubles, you show how much you value your customers and this will all lead to improved reputation.

Surpass Sale Figure Goals:Got revenue goals you’re not likely to meet? Flash sales and discount promos are the perfect solution to achieve weekly, monthly or annual goals you may have set for yourself!

As you can see from the examples above, offering discounts to your customers is one of the best ways to promote your business and continuously attract buying customers. However, if you do decide to offer discounts to your store, there are certain factors you have to consider first. One is the age of your business, as well as the number of your customers and how you implement pricing.

While offering discounts and other purchase incentives is an effective way to attract more people into your business, it’s equally important to know IF such strategy suits your business at its current state. Depending on your business plan, offering discounts may buying customers or it could create confusion that could affect how you do business. If you’re unsure whether now’s a good time to offer discounts to your customers, we’ve compiled these tips to help you decide your next move:

Use Discount Promos As Customer Rewards

… not to chase after customers. In some market culture, discounts are used to give incentives to long-time customers who have been making timely payments. This is a common reward to show customers their business is valued. If your budget allows for certain incentives like giving discounts to long-time customers, then by all means, show them that you appreciate their patronage all these years.

However, stop short at giving discounts for the sake of retaining customers who are threatening to switch to another service provider IF you don’t give them a discount. If you know that you provide better service at a reasonable price, don’t undervalue your business. Giving in to unnecessary pressure like these could have detrimental effects on how you do business later on. Discounts should be given to customers as rewards; it shouldn’t be used as a tool to forcibly lower costs just to retain customers nor to chase after customers who are threatening to make the switch.

Who Should You Give Discounts To?

This is a tricky question. On one hand, giving discounts to all customers is a great way to build better relationships and boost customer satisfaction. On the other hand, your profits and business revenues could be gravely affected if you offer discounts to ALL customers.  Offering discounts to majority of your customers have its own perils. For one thing, it could be hard to switch the prices back to its normal range.

Another thing is, it’ll be hard to undo the effects of offering discounts if your income has become insufficient. Offering 10% discounts to select customers is a safer alternative than offering general discounts to, say, all new customers, etc. Additionally, don’t just randomly select customers to award discounts to. You need to create a set of standards to determine select customers’ eligibility for discounts. A great place to start is to determine by checking for:

  • Customers who have been loyal to you for years
  • Customers that pay on time
  • Customers that referred other people to your business
  • Customers you completed several projects for

Always weigh the pros and cons of any purchase incentives you offer. Find out if your business has more to lose if you offer such incentives and develop a plan B if things didn’t work out the way you intended once the incentives are rolled out to customers.

Check Your Customer Base

Don’t offer discounts when you’ve yet established a firm customer base! If you got very little to gain and so much to lose by offering discounts, then it’s better to wait for the perfect time to implement such incentives. Startups tend to offer discounts to give people a reason to check their business out instead of continuously patronizing their more established competitors. However, if such marketing ploy will only leave you short in the balance sheet, don’t.

Success in any type of business cannot be built around pricing strategy alone. It’s built around expertise, quality, high level of customer satisfaction and excellent customer service. Again, don’t undervalue your business by offering discounts to chase after customers.

However, if you must insist on giving customers discounts to increase your revenues, go for long-term projects and offer small discounts. You could also promise customers discounts for future projects. For instance, you could give 5% to 10% discounts for customers who can 1) refer you to other customers or 2) customer that come to you for second or third project/purchase

It pays to always check how firm your customer base is before implementing any sort of discounts because having a sustainable number of buying customers will make it easier for your business to yield funds for such rewards.

It’s All About Timing

 If say, you decided to finally roll out your discount offers, it’s important to consider the timing of the promo. There are two ways to announce the discounts. One, you can post it publicly i.e. straight on your website or two; you can announce privately i.e. contacting select customers about the promo.

Public Announcement: The advantage of announcing incentives to a predefined group of customers is it encourages other customers to patronize your business to get the same incentives sometime in the future. It could also attract people to sign up for your service and help retain existing customers.

However, it could also alienate people who were not included in the predefined group of customers eligible for the discounts. You can avoid this by ensuring other parties may be eligible for discounts in the future. When announcing discounts publicly, do so with an inviting, well-written copy. No flashing graphics no oversized fonts or big buttons to get people’s attention.

Private Announcement: If you chose to discuss the new promo privately to select clients,make sure you offer such incentives to people who have been loyal to your service for years, those that you had great business relationships with and those who have referred your services to other customers. Use the promo to show your customers that you value their business all these years and also to improve business relations.

Free Shipping

Free shipping is without a doubt, a great incentive to give particularly for wholesale and retail eCommerce businesses. By offering free shipping, you encourage customers to make MORE purchases and provide them a more fulfilling shopping experience. However, shipping costs aren’t exactly cheap either and if you’re footing the bill, you need to make sure it’s worth the added cost. In this part the post, we will discuss the science of free shipping and how to do it right.

Free Shipping: Do You Need To Offer It?

When it comes to offering incentives of any kind, the first question you ask yourself is: “Do I really need to offer this?” Let’s assume you can offer purchase incentives like free shipping, let’s take a look on whether or not you should offer such rewards to customers.

A 2011 holiday survey conducted by comScore showed that around 26% of online shoppers won’t purchase products unless the eShops offer free shipping. 42% of those who participated in the survey said free shipping is somewhat important and are actively seeking free shipping deals when they shop online.

It’s hard to argue the importance of free shipping or shipping discounts on online businesses, particularly those that offer wholesale items.

In the same survey by comScore, more than half of all holiday transactions in 2011 included free shipping deals, a sign that retailers are finally recognizing the need to offer customers rewards for their continued business.

Another study conducted showed that women in particular, are drawn by free shipping offers than men with 31% preferring that offer versus 21% in men. Interestingly, searches for free shipping in general jumped to 29% last October, 2011.

Free Shipping: How Will It Benefit Your Business

Free shipping may be great for consumers but when you look at it from a merchant’s perspective, it could be both a good thing and a bad thing. Free shipping may benefit businesses because it helps motivate customers to make multiple and/or repeat purchases, minimize the risk of cart abandonment and enhance customer satisfaction. Below are other benefits that free shipping provides to business owners:

Boost Revenues: Free shipping is a great tool to boost online sales and business revenues. It could result in bulk orders. However, free shipping may not necessarily boost profits. A comScore survey indicate that although 46% of online retailers claims that offering free shipping increase their profits, almost a third of online sellers says otherwise. When it comes to offering free shipping, most online businesses tend to overlook the minimal profitability of the offer; rather, they tend to focus on the long-term gains of offering such incentives.

Enhance Repeat Purchases: Most online sellers that offer free shipping admit that they acquire new customers easily and repeat purchases have become quite common after offering free shipping or discounted shipping. Because customers sees free shipping as a way for merchants to give more value for their money, they tend to make the most out of the offer and this will ultimately result in repeat purchases, bulk orders, etc.

Edge Out Competitors: When you offer free shipping, you get the edge you need to stay competitive in a very tight race for more market share. With so many eCommerce sites fighting over the same target audience, how can your business possibly stand out? By aggressively pushing for better customer service, quality products and a rewarding shopping experience. Free shipping may just be the vehicle you need to maintain existing levels of sales in an otherwise cutthroat competition in the marketplace.

Free Shipping: Added Costs To Consider

Say you want to offer free shipping to your customers online but is unsure what types of added costs you have to contend with once you rolled out this new reward program. Below are added costs you have to consider before you offer free shipping to your customers:

Profit Margin Loss: One of the most common costs of offering free shipping is the loss of profit market. Shipping costs aren’t exactly cheap and prices have continued to rise over the past years. One way to minimize profit margin loss is to reduce the delivery charges via economy shipping. However, economy shipping tends to deliver very slow service at times and even order tracking loss.

Design and Marketing Costs: When you offer purchase incentives like free shipping, your website should be programmed to handle special promos like this. If your website cannot handle such promos, you will have to hire a team to program your website to manage orders with free shipping. You’ll also need to spread the word about your incentive programs and this will cost additional expenses as well.

Calculating Shipping Costs

Free shipping may be great for customers but not always for sellers, particularly for small and medium-sized online businesses that lack the negotiating power that bigger, more established retailers have. This means profit margins may become even slimmer if they implement free shipping. The good news is, there are ways to offer free shipping without it affecting profitability. But before we get into alternative options for free shipping, consider the following:

Profit Margins: As a business offering incentives, your profit margin is likely to be affected by such pricing strategy, especially if you offer multiple products as profit margins vary from product to product. These elements may affect the level of discounted shipping you can offer to customers.

Product Specs: From the weight of your product to restrictions in handling, certain products cost more when shipped. Some products require special handling and on average, is one of the most common reasons why products are very expensive to ship. Consumer electronic products, laptops, etc. are just a few items that require special handling during shipping.

Order Value: Most online sellers offer free shipping for bulk orders or when customers reach a set of order numbers.

Shipping Location:International shipping costs more than domestic shipping. You’re likely to absorb more costs when you ship in other countries. This is why most sellers tend to limit free shipping to domestic shipping only.

Ways You Can Offer Free Shipping To Customers

Nearly 61% of online shoppers are likely to cancel their purchases if free shipping isn’t offered to them, this according to a recent comScore survey. No free shipping offer is also the primary cause of cart abandonment as reported by many eCommerce site owners. As a business owner, there are different types of shipping promos you can offer to your customers. You don’t need to settle for free shipping to get people into your business. Below are different ways you can offer free shipping to your customers:

Members-Only Free Shipping: This option requires customers to pay an annual fee to join your members-only club where incentives like free shipping are offered. This reward scheme is similar to Amazon Prime.

Free Shipping For Minimum Order: In order for customers to get free shipping, they have to reach a certain number of orders.

Free Shipping For Selected Items: This is a great way to get old or overstocked items out of your hands. Offering free shipping for selected items only is also best to sell items with the best margins.

Site to Store Free Shipping: This type of offer is gaining traction particularly in big name brands that have several stores in various locations. This scheme offers free shipping if the customer drops by the store nearest to the customer’s location for pickup.

Flat-Rate Shipping: Although this type of shipping offer isn’t entirely free, it’s still considered as an incentive because it offers substantial discounts on the shipping that might otherwise be paid in full by the customer.

Tina Lee-Almazar | Tinaciouslee

Tina Lee-Almazar is a writer and editor based in the Philippines. She holds a Bachelor’s degree in Broadcasting from Centro Escolar University in Manila. She started out as a production associate at ABS-CBN Broadcasting Network in 2004 before transitioning to creative writing in 2006. Her years of experience as a writer resulted in having considerable knowledge in a variety of writing fields. When she’s not surrounding herself with pretty things or discussing herself in the third person, Tina watches funny cat videos all day.

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