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Offers, coupons, discounts and deals. At some point in time a merchant will be faced with the decision of whether to offer discounts, if so, when and how much should the discounts be worth.

Offering discounts for your business can be a powerful weapon in your conversion arsenal, however, used haphazardly and you can do significant damage to your brand or worse, become unprofitable.

In this post, we’ll review some of the pros and cons of offering deals for your business, look at some of the most popular ways you can use discounts to drive conversions and, of course, how to most effectively use them.

Types of Offers

 There are several overall types of discounts and offers you have at your disposal. For the purpose of keeping things simple, we’ll refer to coupons, discount and deals all as offers. Let’s take a look at the most common:

  • Percentage Based Discount – The most popular way to offer discounts is percentage based discounts. This can include small incentive percentages like 5% or 10% off, larger discount to really drive sales like 20% and 25% or large percentages like 50%+ to liquidate merchandise that isn’t moving or old.

  • Dollar Value Discount – Offers that are based on a dollar value can be positioned as a credit. This makes people feel like they’re wasting money if they don’t use it. In some studies, redemption of dollar based offers vs. percentage based offers can be as much as 175% greater. Pair one of these with a minimum purchase to increase its impact. An easy trick to keep in mind when deciding between a percentage or fixed amount discount for a specific product is the rule of 100. If your item is less than $100.00, use a percentage discount, if higher, use a fixed amount discount. This is a psychological trigger that will result in the highest perceived value for your customers.

  • Free Shipping – if you sell online or have an ecommerce website, shipping costs are often cited as the number one reason for shopping cart abandonment. Offering free shipping is a great way to mitigate this and increase conversions. Use Free Shipping discounts in conjunction with a minimum purchase requirement to increase your average order value. You can also limit this discount type to specific areas or groups of customers in order to avoid cutting into your margins by excluding shipping rates over a certain amount.

  • Free Gift – A free gift with a purchase can be a great way to provide additional value to customer. If used strategically, it can also be used to increase average order size and/or to get rid of product that isn’t moving.

When and How to Use Offers

There are a hundred and one ways you can use sales, offers, discount and deals to drive customer acquisition and conversions:

Email/Newsletter Subscription Offer

As you probably already know, building an email list is extremely important for online retailers. By providing an offer in exchange for visitors emails address, not only do you increase the chance of a conversion, but you also get their email, providing you with the opportunity to market new products and offers to them in the future.

By building a “buyer list”, not only do you increase the likelihood of a conversion, you also capture the vistors email address whichwill give you the opportunity to market new products and offers to them in the future.

Weekly/Monthly Offers to Drive Sales and Meet Revenue Goals

These are traditional sales used to drive increased sales. Many times sales are used at the end of a month or quarter to increase revenues to meet projections and goals.

Referral Offers

People are much more likely to purchase from you if referred by a friend or family member. Use this to your advantage and use offers to encourage referrals. You can choose to give a deal to the person referring, the person being referred or both.

When and How to Use Offers

Minimum Purchase Discount

An offer based on the total value of a shopping cart is an effective upselling tactic to encourage customers to spend more, increasing your average order size. A strategic way to incorporate this into your business is to calculate your average order value for the previous few months and offer a discount or free shipping on all order 10-20% over your average order value. You can also offer minimum purchase discounts for specific collections and products. If there’s a particular collection you want customers to focus on, try adding a minimum purchase discount to incentivize customers.

When and How to Use Offers

Exclusive Social Offers

Exclusive offers on your social networks can be a great way to build a strong relationship with those that follow you as well as provide a reason for new people to follow and subscribe to your social channels, which will allow you to market to them in the future.

When and How to Use Offers

First Time Shopper Offer

Providing first time customers with an offer specifically tailored to them can rove to be just the thing to convert them into repeat, loyal, paying customers.

Customer Loyalty Offers

Rewarding customer loyalty can help build an even stronger bond while also only providing discounts to customers that already spend money with you. It can be as simple as sending your best customers a personal email with a discount or credit, using an automated email marketing app to send out email offers when someone makes a certain number of purchases from you or implementing a customer loyalty program.

When and How to Use Offers


Offers and discounts may not be a good fit for all businesses (perhaps only a handful fall into that category, however, with a clear goal in mind, a firm understanding of the brand and some experimentation, you can most effectively utilize offers to meet your objectives, building customer loyalty and increasing revenues.