When we’ve discussed best practices for email content, we’ve noted that discounts shouldn’t always be included in your initial recovery emails.
While discounting can be a powerful tool in saving lost sales, it’s also a double-edged sword as offering discounts can affect your brand value and customer expectations. Knowing when to offer discounts and what kind of discounts can be difficult, and recovery emails can call for different discount set ups.
Why Offer Discounts
Pricing and expected cost vs cost presented during purchase can drastically affect whether customers are comfortable buying from your site. The leading cause of abandonment is due to unexpected additional costs while purchasing:
61% of customers cite, “Extra costs too high” as a reason for leaving a purchase
This means that costs such as taxes, shipping, and fees can drastically affect conversions and abandonment. Knowing what the expected order total is as early as possible is important to avoid abandonment:
24% of customers cite, “I couldn’t see / calculate order total costs up front.”
Since customers are put off by unexpected prices, it can be logical to offer a discount to offset these unexpected costs and encourage them to buy. In fact, studies show more than half of customers will purchase if given a discount as a result:
54% of shoppers will purchase products left in shopping carts, if those products are offered at a lower price.
Despite the effectiveness of discounts, offering the right discount at the right time is important.
Avoid Brand Devaluation
Offering discounts encourages your shoppers to purchase to get lower prices, but it can change their perception of your brand:
Discounting quite literally is devaluing the goods you sell, in order to entice a shopper to make a purchase. The danger is that it can create a permanent perception of lesser quality.
Consistently offering discounts can also prompt customers to question whether they’ve been “overpaying” for products when purchasing at full price. SweetTooth notes:
Another conclusion your shoppers might draw is that you have been selling your items for really high margins, and taking advantage of them.
Offering cart amount or percentage discounts can irreversibly alter customer perception of your brand, and therefore should be considered carefully.
If you offer discounts often right away (for example, in your first recovery email), you can run the risk of “training” customers to wait for a discount before purchasing.
This is typically tied into the way customers perceive or devalue your brand: giving them too many discounts can start to move the perception from, “I’m getting a great deal!” to, “This product is never worth paying full price.”
When you discount too often, your sale price becomes your regular price, cutting significantly into profit margins and setting the unwanted expectation that there will always be a discount. ConversionXL puts this quite succinctly:
Offering discounts too soon can not only be a poor strategy in terms of maintaining good margins, but it can also cause your customers to become accustomed to discounts or change the value perception they once had.
When to Include Discounts
Discount timing is a sort of black art, and it will vary based on audience. For example, discounts may be more effective if your target audience is females aged 40 to 55, but not as effective if you target males 18 to 24. The basic idea is: if you offer a discount, just wait. Don’t offer one immediately in your first interaction or recovery email — offer one in the second or third email.
ConversionXL notes that many brands wait 5 days or more to offer discounts to customers:
Most brands that offer discounts wait until no action has been taken for quite some time. Think 5 days to 2 weeks later. (The Honest company sends their first discount 2 weeks post-abandonment.)
Jilt merchants tend to have the best experiences with discounting when waiting at least a day, but typically 2 or more days, before discounting an order.
What Kind of Discounts to Offer
You should also consider that discounts don’t need to always be in the form of “10% off” or “$5 off”. SweetTooth has a great expression for this:
Provide your customers value through addition, rather than subtraction.
Rather than offering cart discounts, you can consider offering benefits as a form of discount or purchase incentive instead:
- Offer free shipping to recover an order (typically simple with a Free shipping-type coupon via Shopify or WooCommerce)
- Offer a free gift for completing the purchase, such as a sample product or expedited shipping
- If you’ve implemented a loyalty program, remind a customer how many points they’ll earn for purchasing.
While these strategies may not directly decrease product price, they can address customer reasons for abandoning the cart by mitigating added costs, such as shipping, to encourage customers to complete the sale.
Considering when to include discounts in addition to discount type will help you improve your discounting strategy overall.