Customer retention and its importance to one’s business has been discussed in multiple of our blog posts. Customer retention is vitally important to maintain a successful business, but it is not easily achieved. E-commerce companies are constantly striving to gain new customers while encouraging existing customers to continue to purchase from their sites. It is a lot less costly to continue to bring back these current customers than to advertise and draw in new customers. One strategy that will increase your customer retention is discount schemes or programs.
Discount schemes help create urgency, increase awareness and drive purchases. Things such as quantity discounts, specialty item discount, buy one get on free, etc. are considered discount schemes and they can be offered to consumers. These discounts are aimed at grabbing customers attention and can also be offered to current customers to encourage them to come back. Companies can even go a step further and make the discount personalized, which will create a sense of loyalty from the customer because it has enhanced their experience. Most of the times customers will purchase additional items than the discounted items, giving you more sales while they still feel that they are getting a good deal. We have listed a few different types of discount schemes below:
- Simple immediate discount issued when the customer purchases for the first time.
- When a customer purchases from you, they will receive a discount off their next purchase. For example, purchase another item in the next 7 days and receive 20% off!
- Customer is emailed at intervals with targeted promotional material.
- Offer discount for customers buying in bulk.
- Generic coupon codes that you advertise.
- Buy one get on free” or a promotion similar. They have to purchase a set number of items before receiving a free item.
- Bundled discounts. This works well with online software. For example, if a customer is playing a game that requires them to purchase in-game apps, you could offer a bundle of tokens with a specific weapon at a discounted rate. They only receive the discount if they purchase the specific items together.
There are some things to keep in mind when structuring these discount schemes as well. There needs to be a time constraint in order to create a sense of urgency. For example, “This sale ends tomorrow at midnight!” Also, you want to make sure your most valuable customers do not feel less valuable by you offering everyone the same discount all the time. The discounts need to change and they should also be tiered to a customer’s value with your company. Lastly, you want to incentive your customers to share or talk about these discounts on social media, if you are looking to increase your awareness and gain new customers. For example, if they share the discount on Facebook and three people click the link they post and purchase from you, then the customer that shared about your company receives the item for free.
By using discount schemes, you can encourage your customers to keep coming back to you, but also at the same time encourage them to spend more. Discount schemes can increase your customer retention, customer frequency, customer spend, customer referrals, and increase the success of your marketing strategies. It can also enhance your image in the customer’s eyes. With BMT Micro, you can offer all of the discount schemes listed above! You can set automatic discounts based on the quantity of a single product, the quantity of multiple products or the total dollar amount being purchased, with support for rounding the final price. Discount schemes allow you to distribute a single discount code or multiple single-use discount codes for special promotions. If you would like to learn more about how you can use discount schemes through BMT Micro’s robust system, please contact us!