One of the people in the retail space that I follow is Kevin Hillstrom. He’s a veteran retail analyst and brings a very fresh, insightful, and data-driven perspective to questions of ecommerce analytics.
One of the things that I’ve noticed him talk about recently is how, many times, the discount strategies employed by merchants end up doing more harm than good to their long term business goals.
There are basically two reasons why:
- Discounts are fundamentally unfair to customers who paid full price.
- Customers who come into your store on a discount purchase most likely won’t end up paying full price later on — they’re bargain hunters.
If you look at successful companies with highly sought-after products, like Apple, you’ll notice that they hardly discount their prices at all. People gladly pay full price for them – and wait in a line for a few hours to boot!
We also hardly offer discounts at all. We have a high quality product line, and fantastic customers who are more than happy to pay full prices.
Merchants should be in the business of selling quality products at competitive prices. At the end of the day, if you’re regularly discounting your products, either the quality is not there, or the prices are not right.
Now, let me tie this into the context of the way that MageMail works, in regards to the discounts that it allows merchants to offer via triggered emails.
First off, you don’t actually have to use discounts for it to work, but I do believe that offering discounts helps.
The way that you would offer a discount in MageMail, is that you would offer, let’s say, a 10% discount to inactive customers, who had not purchased from you in a certain period of time — it varies by the length of your product’s purchase cycle — but let’s call it 3 months to use round numbers.
You can also offer a discount coupon to customers for submitting a product review or for their purchase anniversary date (the date of their first purchase with you).
So how are these discounts different?
Let’s take a look at the two criteria that I listed above.
These discounts are fair. They’re offered to every customer in the same way. Not at the same time all at once, but at the same point in the customer’s lifecycle. A customer that makes a purchase today at full price isn’t getting a bad deal because of the customer who gets a discount tomorrow.
Both customers will receive the same discounts in time.
The customers receiving discounts have already paid full price In order to receive a triggered email in the first place, because they’re already a customer of yours.
So you’re not pulling in bargain hunters who will never purchase full price, you’re giving a little additional incentive to active customers who have already proved their intent to purchase full price.
Well, thanks for reading this far! If you have any questions, please free to reach out. And if you’re interested in using MageMail to send out triggered emails to your customers in Magento, you know who to ask!
