How To Drive Customer Acquisition With Discount Pricing Strategies
With the rise of digital coupons, Americans are increasingly taking advantage of discounts when shopping in 2024.
In a survey, over 88% of respondents shared that they had used a voucher during their most recent trip to the store. This shows that discounts can be a compelling way to drive customer acquisition.
From everyday BOGOs to flash deals, companies are turning to special offers and discounts to drive sales and appeal to new customers. But how can a company know what the right discounting approach is?
Here is a discussion of some essential discount strategies to help guide firms’ decision-making to craft effective promotions to bring in new business.
Essential Discount Strategies To Drive More Customers Towards Your Business
Have you just started your business? Or are you planning to grow your business? Then, you might want to try these discount pricing strategies to attract more customers to your business.
People love discounts as they feel like they are getting an exciting deal on their purchases. Therefore, more people shop during the sale season or when prices are slashed. So, try these discount strategies to increase your sales and revenue while attracting new customers.
Provide Free Shipping
Free shipping is a popular promotion that can have a significant impact on customer acquisition for the following reasons:
- Attract new customers: Offering free shipping can be a compelling incentive for customers considering purchasing from a new brand. This initiative reduces the overall cost of the purchase.
- Increases average order value: When customers know that shipping is free, they are more likely to add more items to their cart, leading to an increase in average order value.
- Encourages repeat purchases: Once customers have experienced the convenience of free shipping, they are more likely to return for future purchases, building loyalty to the brand.
- Enhances brand perception: Offering free shipping can enhance a brand’s reputation and perceived value, making it more attractive to potential customers.
- Reduces cart abandonment: Shipping costs are one of the leading reasons for cart abandonment, so offering free shipping can help to reduce this and increase conversions.
Display Limited-Time Deals
Businesses should display limited-time deals to take advantage of customers’ impulse to act fast when presented with an attractive offer.
Limited-time discounts not only attract customers who are incentive driven but can also increase the sense of urgency and enthusiasm amongst people who may otherwise not be inclined to take advantage of a deal. This urgency convinces customers to make their purchases promptly, thereby driving sales.
Such limited-time deals are the perfect opportunity for businesses to reach a wider pool of customers or promote new products while maintaining strong customer relationships through generous incentives.
Here are some examples of limited-time deals businesses can provide:
- Flash sales: Offer a discount on selected products for a limited time, creating a sense of urgency for customers to purchase.
- Early bird promotions: Providing a discount to customers who purchase before a certain deadline, incentivizing them to act quickly.
- Time-limited bundles: Allowing a package deal on multiple products for a limited time, providing customers with a good value, and encouraging them to purchase.
- Countdown deals: Showcasing a countdown clock on the website to create a sense of urgency and encourage customers to take advantage of a limited-time offer.
Offer Referral Discounts
Referral discounts are a win-win situation for customers who refer their friends and family and the referred individual who gets a discount on their purchase.
It benefits shoppers financially, and referral discounts can also help businesses grow quickly. It’s an effective way to reward existing customers for referring their friends and family, introducing the brand to many prospects.
This initiative also fosters a sense of loyalty from customers who feel incentivized to make recommendations about a particular business. Furthermore, referral discounts allow companies to target new customers precisely and track the source of new customers. This combines to create an efficient way for businesses to increase sales without incurring additional staffing costs or resources beyond the initial effort.
Here are three types of referral discounts:
- Referral code discounts: Customers receive a unique referral code they can share with their network. When a new customer uses the code to make a purchase, the referrer and the new customer both receive a discount on their next purchase.
- Friend-get-friend discounts: The referrer and the new customer receive a discount on their next purchase when the new customer makes a purchase. This encourages the prospect to invest in the company’s products/services.
- Bonus point rewards: With this approach, buyers earn bonus points that can be redeemed for discounts or other prizes when they refer new customers to the brand. These points can be used to incentivize repeat purchases and increase customer loyalty. Customers can also use their points to get discounts on other products.
Frequently Asked Questions
Several businesses are using discount pricing strategies to attract customers to their brands. Therefore, this kind of strategy is gaining popularity rapidly leading to more questions from business owners about the strategy. So, here are some frequently asked questions online about discount pricing strategies that you might find useful.
You have five different types of discount pricing strategies, and each type of discount strategy has its disadvantages and advantages.
Firstly, there are percentage-based discounts, such as a 20% discount on the product price. It’s easy to calculate and often used during the sale season.
Secondly, cash discounts are less common in the market. You provide a cash discount on a fixed product. Take, for example, a 5-dollar discount on a 50-dollar product.
Thirdly, there are quantity discounts based on bulk orders. So, you must purchase a certain number of units to get a discount on the total amount.
Fourthly, bundling discounts are offered during bulk orders or when purchasing multiple orders at once. This type of discount encourages customers to purchase more products.
Lastly, seasonal discounts are offered at specific times of the year. These discounts are typically given during high demand for products at certain times.
All love discounts, and they help attract new customers to your business who otherwise would not have tried your products. So, discounts open a door for new customers to try your products; some might love them and become your regular customers.
Wrapping Up
Businesses must consider using discount pricing strategies to increase sales and drive customer acquisition. Firms can offer free shipping, BOGOs, limited discounts, referral discounts, and other strategies.
With a little creativity, companies can implement the right discounting plan that attracts their target customers and encourages them to make a purchase. In addition to crafting the discount offer, firms must promote it on their social channels to maximize its reach. With this, companies can make the most out of their discount price initiatives.
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