Do you want to know a sure way to lose money on an eCommerce venture?
Here’s one proven method: try to beat out the competition by offering heavily discounted prices.
Don’t get me wrong: done correctly, sales and discounts can help increase revenue. Get the strategy wrong, though, and you’re sunk.
In this article, I’ll give you nine proven tips on how to run promotions that build your business over time to help you get and stay ahead of competitors.
The low price battle between Target, Walmart, and Costco is hurting all three. (Source)
Why Discounting Isn’t Always the Best Strategy
Heavy discounting can definitely increase the number of sales, but it doesn’t always result in greater profits. And don’t fall for the idea that the “loss leader” pricing strategy is a foolproof way to bring in more buyers and generate business. It isn’t. Too often, it’s a race to the bottom.
Even if your aim is to become the Walmart of your niche, you’ll need more than low prices to stay afloat. If being the cheapest option isn’t your aim – if you want to be known as a brand that offers high quality and exceptional service – you absolutely must find other methods to generate sales.
Here are three reasons why:
- Discounting trains your customers to wait for the next big sale before buying. That makes for lean times in between the booms and for never-ending campaign work that adds to overhead expense.
- Discounting tells customers you think your prices are too high. If you can afford to slash the selling price by 50 percent this week, how can you justify doubling the price next week?
- Discounting can devalue your brand. It especially hurts companies that stand for quality or luxury. Imagine Rolex coming out with a fifty-dollar watch. How would that affect customer pride in ownership and loyalty to the brand?
Point to Amazon as an example of how low prices make for better sales, if you will, but shoppers don’t always get the best price there. Amazon uses sophisticated software and algorithms few companies can afford to adjust their prices on the fly.
You might be offered a discount on a best-selling product tonight, for instance, but pay more for the accessory items that go with it. Or you might be guided towards a different model in order to get the specifications you seek, without realizing that configuration is actually priced higher than the competition. Amazon specializes at selling perceived value at a premium price.
You can profit from promotions, but it’s important to be smart and deliberate with them. Here are nine suggestions that don’t require extraordinary technical resources, but can help you get more eCommerce sales — without needing to resort to big discounts.
9 Tips to Boost Sales Without Racing to the Bottom of the Pricing Barrel
I’m giving you a mixed bag of tactics here. You’ll need to pick and choose the tips that best fit your particular brand and your own strategic plan. If the first doesn’t sound like it’s right for your ecommerce store, go on to the next. You’re sure to find one or more tips you can apply and take to the bank.
1. Streamline your checkout process.
Make it the easiest thing your shoppers have done all day. Don’t make them clear hurdles to buy from you. Offer guest checkout to new customers. Buy something from yourself. Look for frustrations your buyers feel, then find a way to smooth the path and ease stress. I’ve seen this tactic alone significantly diminish the cart abandonment rate.
2. Offer free shipping.
Hooking customers with a low price on the front end, then adding it back in as “shipping and handling” on the backend is a defunct strategy and a sure recipe for disaster. You’ll probably need to do some serious number-crunching, but it’s essential to come up with a way to include a free shipping option.
Many of today’s online shopper won’t even consider buying from you unless free shipping is an option. A recent Walker-Sands study found that free shipping is the leading incentive for getting people to shop online.
3. Highlight great feedback.
Make social proof an integral part of your online store. Use testimonials and customer reviews on product pages, category pages, landing pages, even during your checkout sequence. Have you ever been in line at a local store and received a “Hey, I bought one of those last week – best thing ever” sort of remark from another shopper?
Social proof can cement the sale like nothing else. Studies consistently show that shoppers trust recommendations from others above any other form of advertising.
4. Branch out past reviews
Include star ratings, endorsements, and indicating how many people have purchased the item recently. Any and every touchpoint that introduces your prospective customers to those who’ve already purchased from you is a high-value commodity.
Each positive review helps build sales. Don’t just use them… seek them, encourage them, acknowledge customers who leave them. Social proof is golden. Treat it with respect.
LL Bean (see the screenshot above) excels at providing social proof to help customers make a purchasing decision. (Source)
5. Create a sense of urgency.
Nobody likes to miss out on something good. When supplies get low, tell shoppers it’s important to order now.
Mentioning “9 items left in stock” is subtle, but powerful. And since it’s variable based on the product, customers may believe it even more than a more general “while supplies last” message. But even when stock is plentiful, you can use “only while supplies last” – especially for items that have a history of going from in stock to out of stock quickly.
A gentle nudge or subtle reason to make the purchase often makes the difference between a sale and a lost opportunity.
6. Give your visitors a virtual in-store experience.
Don’t skimp on product photos, look for ways to incorporate videos, you might even provide audio options. Your eCommerce site is a round-the-clock salesperson, so why not give your site a personal touch.
Shoppers who watch a video presentation about the item are more likely to buy. High-quality photos showing everything the potential customer needs to know are an absolute necessity, and audio walk-throughs can be a unique way of making it feel like your sales staff is right there with the prospect. Answer the most frequently asked questions and objections. Consider adding a live chat function to keep prospects engaged and guide them on to check-out.
By the way, it may not be long before the virtual shopping experience means “virtual reality.” Check the eBay video below.
7. Include a free gift with the purchase.
Instead of providing a deep discount, provide extra value. That will help build your brand, instead of diminishing it, and it creates goodwill.
Everything you do to exceed customer expectations helps create loyal customers who love to brag about your business. You can’t buy better advertising than that.
8. Reward your loyal customers with special offers and benefits.
Make sure they realize how much you appreciate them. The more your repeat shoppers feel like you really do care for them, the more likely they are to buy more and remain customers longer.
Take a close look at loyalty program options. Make sure the methods you choose are aimed at creating a sense of family, a sense of belonging. Bring out the “Macy’s Magic.”
9. Provide iron-clad guarantees and stand behind them.
Shoppers will often pay more for an item if they know any warranty claims or returns will be low friction. If you can’t stand behind a product, don’t offer it. Guarantees remove hesitance and give the buyer a “I’ve nothing to lose” attitude.
Smart ecommerce stores remove the risk of online shopping, and they deserve the trustworthy reputation that strategy imparts.
You Don’t Have to Rely on Discounted Prices to Compete
Rather than resort to major discounts to grab shopper attention, work on building the perceived value of your products and making it super easy for visitors to shop with you. Use abundant social proof and reduce the perceived risk to shoppers. Raise the value of your brand instead of lowering prices.
You can do the same.
Make sure the copy on your pages highlights your brand’s unique selling points. What makes your brand feel great? Fast delivery? Great customer service? Range of payment options? Highlight them, then follow through and do exactly what you say you’ll do.
That’s the bottom line practice for exceptional business.