6 Tips To Drive E-Commerce Sales without Discounting

6 Tips To Drive E-Commerce Sales without Discounting

Sale! The mere mention of the word causes a flutter of excitement in the minds of some customers. But offering a reduced price presents a Pandora’s Box of potential problems that may hurt your company in more ways than one. 

Discounting shouldn’t be your ultimate strategy to drive more sales. Because you might not be realizing how discounting hurts brand image,

In the minds of your customers, quality and pricing are not separate entities – they are rather intertwined. And this is precisely what Dan Ariely discusses in his book  Predictably Irrational: The Hidden Forces That Shape Our Decisions. 

“Price can change experience. If we see a discounted item, we will instinctively assume that its quality is less than that of a full-price item – and then, in fact, we will make it so.

Once a buyer considers you like a bargain brand with low-quality products, that perception will likely last forever. There are plenty of reasons why it is a catastrophe you need to get yourself out of. Here are some we both can agree on.

Discounting Invites Bargain Hunters:

When you use discounts to incentivize purchases, you make “Bargain Hunters” a greater part of your customer base. As a result, you become reliant on their purchases to keep your business afloat. 

However, as you are fully aware, bargain seekers are far less profitable than “The Loyal Crowd.” To put it in numbers, 80% of profits come from 20% of a company’s loyal customers. 

The bottom line is: bargain hunters will never develop an emotional attachment to your brand. Thus, chasing them with discounts will only bring you some petty cash, not long-term profit. 

Discounting Sets Wrong Expectations:

If you recall the 2008 financial crisis, retailers were compelled to drop prices by up to 80% to attract buyers. And over time, customers developed an ingrained belief that “The discounted price is the justified price.” 

Take, for example, the case of JC Penny. In 2012, the company abandoned discounts in favor of an “everyday” low pricing approach, which backfired miserably, costing the company billions in sales. 

Finally, JC Penny was compelled to revert to its prior discounting and sales tactics.

The issue was that discounts became synonymous with JC Penny. And when they were discarded, customers felt as if they had no incentive from purchasing there.

Discounting Drains Profit:

No matter how much you dress it up – and even if you pretend to be fine with it — price cuts sting. You’ve invested a great deal of time and effort into your business, and it’s a tremendous letdown to receive next to nothing in return.

And the drawbacks of discounts don’t end there. 

To maintain the minimum margins after selling at a discount, you may consider cutting corners — even compromise the quality of your goods.

Discounting Alienates Loyal Customers:

Despite having other alternatives, loyal customers stick with your brand because they believe they receive a superior product. 

So as to, they don’t hesitate to appreciate the superior value at full price.

On the flip side, if they previously purchased a product at full price, which is now on sale, they may feel betrayed and question, “Why did I pay such a high amount for this? Was the regular price even fair?” 

Donald Ngwe, a Harvard Professor, highlighted the issue in his acclaimed paper, Fake Discounts Drive Retail Revenues: 

“Repeat customers were least willing to pay more money based on fake prices, while the least frequent shoppers paid higher average prices based on the ‘original’ price tags.” 

As shown above: A cheap or reduced pricing suggests that you don’t trust your own product or service – and if you don’t, why should anyone else?

6 Tips To Boost Sales Without Ever Using Discounts

Here are 6 tips we found to be extremely effective to shoot up sales and bring loyal customers to your door.

1. Offer a Delightful Customer Experience:

Wondering how this aspect is even relevant here? Here’s why it’s important. Firstly, discounts can help you catch a few leaking bucks, but they will drain you in the long run. 

Secondly, discounts alone cannot give you a competitive edge – it’s no big deal for your competitors to deliver product parity in terms of price and quality. 

The only thing that can set you apart from the rest of the pack is the customer experience you deliver throughout the buyer’s journey. 

86% of shoppers are willing to pay more for a great customer experience. On the other hand, a single negative encounter may cause a brand to lose 1 in 3 customers. 

Granted that, let’s now reflect on the critical elements of the experience equation.

  • Well-designed and user-friendly website: 

It goes without saying that frictional websites hurt user experience, often resulting in customer churn. On the other hand, customers will not only engage more with a user-friendly site, but they will also return for more (with their friends and family, in fact).

And speaking of engagement, customers today have 2X more interactions with brands on mobile than anywhere else. So, your mobile sites should be: 

—  Easy to read the text without squinting

—  Appealing to the eye

—  Easy to navigate with big  enough buttons and links

  • Simple checkout:  

As an ecommerce business owner, there’s perhaps nothing as frustrating as losing a sale at checkout.

In all fairness, a chunk of cart abandonments occurs due to customers merely window shopping, comparing prices, adding things to wishlists, and so on. But, if you exclude this “simply browsing” category, the following causes emerge:

One-page checkout is undoubtedly the best option, followed by cost transparency and guest checkout to retain and profit from customers. Additionally, you can take it a notch by implementing an in-chat checkout solution.

2. Make the most of FOMO and Exclusivity:

When it comes to your eCommerce store, take advantage of the scarcity principle – the more difficult it is to acquire something, the more valuable it is. 

  • Limited editions: 

Think of the hugely successful Coca-Cola campaign of 2017 when the company brought out limited-edition coke featuring the word “Love.” Two cans would have to be brought together to produce the word and display the shape of the heart. The campaign induced a sense of urgency in customers, skyrocketing sales by nearly 80%.

Another brand that has made good use of the Limited Edition Strategy is Supreme. The company’s limited releases have pushed them far beyond their beginnings, making people feel they’re part of something exclusive.

  • Contests and Giveaways: 

This is a strategy that can instantly create buzz around your brand, driving brand awareness and engagement. 

To reap maximum benefits, you should select a prize associated with your brand. Apart from product samples, you can also reward loyalty points and membership programs. 

In addition, ensure that your reward is proportional to the effort that participants put in. For instance, if you urge your followers to like your postings, you can do away with offering product samples in exchange for their support. 

However, if you want them to post pictures with your branded hashtags, you must raise the stakes.

Consider the Instagram giveaway promotion run by Birchbox. The company displayed a selection of new Living Proof Inc. items and offered away exclusive packages (i.e., product samples) to the lucky winners.

So much so that in 2016 and 2017, high shipping prices accounted for 63% and 54% of shopping cart abandonment, respectively. The only way to win back these customers is to provide free shipping.

However, it is advised that you make free shipping a conditional offer. Encourage customers to spend a particular amount in order to receive free shipping — similar to how Brandless provides free shipping on sales above $40.

To further garner customer loyalty, it’s critical to have easy return policies. More than 60% of shoppers review the return policy before purchasing while 79% expect free return shipping. 

Tuft and Needle, a mattress brand, offers free returns as well as a 100-night trial to convince buyers that it’s okay if the mattress they choose isn’t good enough for them to sleep. 

3. Loyalty Programs:

While loyalty programs may not yield instant benefits like a seasonal sale, it does help to strengthen brand loyalty over time. Consumers who participate in paid loyalty programs are 62% more inclined to spend more on the brand. 

Making the customer feel valued is the genuine soul of a loyalty program. 

The tiered loyalty program at Lancome exemplifies this really well. There are three levels of loyalty benefits offered by the cosmetics company. After a specific number of purchases, you are eligible for a different tier. 

Based on the nature of your business, you can opt for Tiered Loyalty Program, Points Program, Punch Card Program, Cash Back Loyalty Program, Coalition Loyalty Program, and so on. 

 4. Subscription-based Pricing:

Apart from Instagram giveaways, another reason why Birchbox has been able to succeed is that it sells its products via a subscription-based pricing model. 

Each month, Birchbox subscribers receive a box containing four to five tester cosmetics. Then they get unique samples based on what they like. Each package is thus personalized for the customers.

And you know why it works? Because it’s noncommittal (customers can try different goods until they find the ones that they like) and consumers perceive it as a free gift every month. 

Offering subscriptions can thus help you turn one-time transactions into long-term relationships, lowering customer churn and increasing customer lifetime value (LTV). However, do consider your pricing strategy – $70 per year can seem to be a lot more than $5.50 per month.

5. Highlight social proof and feedback:

Let’s say a customer is looking to buy a high-end item from your store. He/she is, however, wary of making the transaction because there is no previous customer feedback. As a result, you face the risk of losing customers.

Truth (more like fact) be told, Facebook advertising isn’t going to bring you the same sales as customer referrals. Consumers are more likely to trust recommendations from friends and family than from the company itself, according to 81% of respondents.

So without being pushy, encourage your consumers to leave a review. If required, provide them with incentives such as gift cards or reward points. Aside from reviews and ratings, other social proofs for your store may include user-generated content, influencer endorsements, media mentions, and so on. 

Below is a product page from Nine West. It has a product review part where users can vote on how helpful the review is, similar to how upvoting works. It also shows the date, name, and, in some cases, location of the customers who left the reviews, making the reviews much more personal and credible. 

6. Upsell at Checkout:

Upselling can come across as pushy when done in-person, but online, it’s easier for companies to take a subtler approach. Furthermore, eCommerce companies can use the data to determine which products are most preferred by their customers.

Source: Groove

The “Rule of Three” often comes in handy in securing an upsell. To elaborate, the “Rule of Three” is the practice of showing consumers three items:

-The one they requested

-A slightly more expensive version of the item

-Finally, a “dream” version of the item that is probably out of your clients’ price range.

While most people go for the middle option, the goal here is to persuade the consumer to choose the most expensive item. 

Another popular upselling strategy is to provide a discount on a minimum purchase. Look Fantastic accomplishes this by allowing customers to save 10% or 15% when they spend a certain amount. 

If a consumer is already spending close to this amount, the offer is likely to persuade them to buy something they hadn’t considered before.

The Gift That Keeps on Giving

Incentivizing and rewarding your customers is the best way to retain their loyalty. And needless to say, it’s a great way to attract new customers.

Leverage technology to measure the effectiveness of each campaign by tracking average order values, conversions, and customer retention. 

Rather than devaluing your brand with endless discounts, offer rewards and value-add. Delight your customers, and they’ll reward you in return. All said and done, which strategy (or, strategies) will you implement?


Naziba Ali is a Content Editor at MyAlice. She is an ardent writer who believes in the mightiness of compelling storytelling. In her spare time, she would rather go for a stroll than binge-watching Netflix. Connect with her on LinkedIn