– Discounting in ecommerce should be done when it is appropriately priced into the unit economics.
– Discounts should be offered for an intro offer of a best-selling product via paid traffic, as well as for newsletter signups with follow-up questions to improve conversion rates.
– Discounting may not be applicable for products sold in retail, as MAPP pricing applies and coordination with retailers is necessary.Offer an introductory discount for your best-selling product through paid traffic and limit the quantity that can be purchased.When should you discount in ecommerce? When you’ve appropriately priced it into your unit economics. That’s it. End of post. But I’ll take it further because there are some places you should 100% be offering a discount.
1. Intro offer of your best seller via Paid Traffic
If you’re spending money on paid traffic, you should have an intro offer that you have for that specific traffic, and you should limit the amount of that offer that can be purchased. Your goal of spending money should be product in hand whenever possible, especially for all goods that are less than $50. This only works for products that have a repeat purchase rate that is high. If you’re selling a product that doesn’t have a high repurchase rate, odds are you have bigger problems. Repeat this until you’re a household name.
2. Via your newsletter signup
You should always offer a discount for a signup, but if you stop at just an email or a phone number, you’re not getting the value you should be getting. Instead, ask follow-up questions that you can use to improve your ads, landing pages, and product pages. This information can be used overall to improve your conversion rates, which drives more profit. Don’t stop doing this, there’s always room for improvement, and your audience is constantly changing. Every subscriber is a new visitor.
3. If you’re also sold in retail
Sorry, no offers for you. MAPP pricing applies most of the time, and your sales need to coordinate with their sales. I threw this in here because most DTC companies sell across multiple channels, but fewer sell into multiple channels. At scale, you’re going to be selling into channels, and the rules around discounting are quite a bit more strict. This is a problem you want to have, but everyone does sales. Even Apple does sales these days. So discounting isn’t something that’s going to go away. Even the most valuable brand in the world that is traditionally against sales does sales from time to time, coordinated across multiple retailers, and they have their own retail presence. Discounting is a fine art of math and understanding scale as well as market opportunities. Find your balance, but you’re not going to find it on a whiteboard. You’ll find it in spreadsheets and calculations. #ecommerce #discounting #marketinghttps://www.linkedin.com/in/jivanco