We live in a digital era where online sales and discounts have made a world of difference. However, discounts have a massive role in attracting new customers, helping businesses engage and retain current customers, and boosting conversions, sales, and revenues.
As an online store owner who wants to improve their customer base, you must learn about different types of discount pricing. This blog post will help you understand various discount pricing types and their importance alongside effective practices.
The Significance of Discount Strategies
Exploring various discount types and benefits allows businesses to improve their sales tactics’ effectiveness considerably. Different reasons suggest why discount strategies are crucial for businesses of all sizes. These reasons are:
- Grabbing Potential Customers: Discounts motivate new customers to buy products at discounted prices. It could facilitate them if they are not interested in getting products at their original prices.
- Retaining Current Customers: Businesses must offer exciting deals to current customers, improving their satisfaction and encouraging them to buy more products.
- Enhance Average Order Value: Motivate customers towards bulk purchases by offering bundle offers and volume discounts.
- Attaining an Edge: Continual discounting strategies help businesses gain a competitive edge over competitors.
Discounts not only increase sales but also allow businesses to solidify their position in the future.
Types of Discount Pricing
Let us discuss various discount pricing types that can boost your WooCommerce business performance in terms of sales and revenues in the long run:
1. Percentage Discounts
Percentage discounts are a type of discount pricing businesses use to attract new and current customers and increase conversions and sales. Businesses deduct a specific percentage from a product’s original price. They tend to deploy percentage discounts on different occasions, such as BFCM (Black Friday Cyber Monday), New Year’s, and throughout the year.
Luckily, online store owners can utilize various WordPress plugins, such as Dynamic and Role Pricing for WooCommerce. This plugin can help them benefit from user role-based discounts and reap rewards through customer retention, increased sales, and increased revenues.
2. Dollar Amount Discounts
In this discount pricing strategy, businesses deduct a fixed dollar amount from the original product price. For example, if a product’s original cost is $200 and a business applies a $60 discount, the discounted price will be $140.
Dollar amount discounts are handy when businesses sell products that cost over $100. Therefore, you should benefit from this discount pricing type when you start selling products with prices over $100.
This impactful pricing tactic can lure new customers and entice existing customers to buy your products. Clearing your inventory helps you effectively satisfy the demands of diversified customer bases.
3. BOGO (Bye One Get One) Deals
Buy One, Get One, or BOGO offers customers huge discounts when they buy two products of the same value. The same offer applies to products of higher value, and more importantly, businesses can link this helpful strategy to a bundle discount.
Customers who buy multiple products simultaneously will receive a more than reasonable discount. BOGO deals have a clear edge over percentage discounts as they can powerfully motivate new customers due to substantial discounts.
Retail store owners can maximize this by creating attractive deals and offers, allowing varied customers to buy multiple products at relatively low prices. For that reason, they can opt for Smart Product Bundle for WooCommerce, an impressive WordPress plugin. Businesses can create customized product bundles to delight customers through engaging deals.
BOGO is a results-driven discounting tactic that entices current and potential customers to increase their purchases and improves profitability.
4. Volume Discounts
When businesses offer an incentive to customers who buy products in bulk, this incentive is called a volume discount. In this scenario, businesses decrease the price per unit or provide a discount on the total cost when purchasing a product in bulk.
Volume discounts are suitable for sellers and buyers. Sellers can sell large quantities, increasing sales and profits, while buyers can get their desired products at discounted prices. It is a win-win situation for both.
Fortunately, you can take advantage of volume discounts by utilizing the impressive WooCommerce plugin Wholesale for WooCommerce. In addition, they can use another plugin, Sales Agent for WooCommerce. This plugin helps businesses boost sales by appointing sales agents and managing the sales commission system on their behalf.
Effective Practices for Applying Discounts
Businesses can benefit from different practices that allow them to implement discounts appropriately. Here are a few practices you can follow as an online store owner, including:
- Clear Communication: Ensure customers are informed about the BOGO offer or any other discount. This will encourage them to buy their desired products from your online store, increasing sales and revenues.
- Categorize Your Customers: Businesses can use customer data to create discount deals and other offers for specific customer groups.
- Try Discount Combinations: Businesses can apply discount combinations to attract current and new customers. This could be a decisive factor in improving conversions and sales.
- Monitoring and Adjustment: Examine the performance of your discount pricing tactics and update them accordingly to increase impact and achieve the required outcome.
Enhancing Sales with Diverse Discount Strategies
Discounting comes with immediate transactional gain and tactics such as loyalty programs. Loyalty programs help build long-term customer relationships and allow businesses to establish trust and brand loyalty over time. Customers prefer other offers, and loyalty programs may not be viable for all customers.
Therefore, diverse discount strategies should be a go-to option for businesses as they can target multiple customer segments. They should consider displaying the original and discounted prices of products in their online stores.
Wrapping Up
We hope you liked our blog post discussing various types of discount pricing and their significance in detail. Whether you own a small or big online store, these discount pricing strategies will help you retain and expand your current customer base considerably.
Furthermore, you should know how to take advantage of different discount deals and offers to lure and keep your customers engaged with your products and services. That said, discounts will remain a secret yet potent weapon in the e-commerce industry in the coming years. So, use them wisely to maximize their impact.
