5 Offers that work
Offers, discount, promotions - whatever you want to call it…offering your customers money off in some way is extremely appealing. And no doubt you don’t need me to explain that concept to you - you’re a business owner and a shopper yourself and you know what a discount for one of your favourite brands can do to your spending!
Your customers are no different and that’s what you need to be mindful of as a business owner. Firstly, can you afford to offer the discount? Do you have a healthy:
Margin
Average order value (and hence cash margin)
Lifetime customer value
And…your shipping costs accounted for?
It’s really important that all of this stacks up. I won’t go into it here, I cover it much more detail in my KPI program, but make sure you uncover all of this before offering any discount.
Your business has to be able to afford it, that’s essential.
So why offer any discounts? (ever)
Offers are vital for your business. They drive customer engagement, boost sales, and enhance brand loyalty. They also help you create a sense of urgency, encouraging quicker purchasing decisions and hence a higher conversion rate. But they also create energy within the business and that’s so important! It’s something to talk to the customer about, it’s a reason to buy, it’s a justification to do it now and it leaves them feeling satisfied.
You’re no doubt used to running the same offers rinse and repeat style. Don’t worry, so are most businesses. But here’s a round up of some other tactics you can trial in your business to switch things up and to test what your customers react best to.
Note - not all are relevant for every business type and product.
THE HOOK OFFER
You’ve got to encourage them to buy NOW. You never want to lose a potential first purchase but more often than not they need nurturing and bringing back to make that purchase. The hook is the thing that might get them to convert for the first time.
Let’s dive into one of the used customer acquisition strategies out there - the hook offer. Think of it as your golden ticket to winning over new customers. The secret sauce or tripwire offer.
So, what’s the deal? It’s all about turning first time browsers into buyers with a low entry, irresistible deal. The magic happens when you start with something affordable and then, once they’re hooked, you introduce them to your higher priced core products. Are you trying to push high ticket items right off the bat? That’s a recipe for friction and reluctance from your customers.
Here’s the genius of the tripwire offer…it gives potential customers a low risk way to test the water. They transact quickly, get a taste of your product, and if they love it, they’re way more likely to come back for more. It’s not about making a huge profit on the first sale. It’s about building a customer base that you can nurture and sell to repeatedly, maximising that sweet lifetime customer value (LCV).
But what if you don’t have a ready made, low cost product to use as a tripwire? Can you create one? Think sample packs or “just pay the shipping” offers. These are killer, especially if you’re selling consumable goods. The goal is to get your product into their hands (or mouths, or homes) so they can experience how great it is first hand.
Once those first time customers are sold on the quality and value of your product, they’ll be more than happy to invest in your higher priced offerings. It’s all about creating a seamless journey from curious newbie to loyal customer.
Here’s a round up:
Everyday Low Entry Item - This tactic is all about offering an affordable, introductory product to welcome new customers to your brand. It's not designed to be a major profit driver but rather a way to attract a large number of buyers who will later explore and purchase from your full product range.
Free Product, Just Pay The Shipping - This can work well for consumable goods and businesses with extensive product catalogues. Companies often source new items in bulk specifically to use as tripwire offers. Customers get a product for free, only covering the shipping cost. This approach pays off by acquiring a lot of new customers, with the real profit coming from their continued purchases and increased lifetime value, but it only works when you’re truly confident about the long term return.
Free Trial - Offering the first month free or at an incredibly low price for a paid subscription (if you offer them) is a great tactic, particularly with consumable goods. This strategy allows potential customers to experience the value of your product totally de-risked, increasing the likelihood that they’ll commit to a full subscription once they’ve had a taste of what you offer.
2. FREE GIFT WITH PURCHASE OFFERS
Another strong strategy is the ‘free gift with purchase’ offer. This is a type of premium deal where you bundle two or more products and sell them for less than their combined individual prices. These offers can take various forms and serve multiple purposes throughout the customer journey, but they’re particularly effective at sparking immediate transactions. People just love something for free.
The idea is simple - incentivise your target buyer to purchase a core product by offering a bonus gift. If the core product is something they already want, the free gift acts as the extra nudge to get them to buy now. This approach works best when the gift complements the core product and is therefore more appealing to the buyer.
Testing is key here, but when your free gift resonates deeply with your customers, it often outperforms a discount offer of similar value. Gifts are tangible and can create a stronger emotional connection, making them a powerful tool to boost sales.
Here are a couple of examples:
BUY ONE SPECIFIC product, get a specific complementary product free.
BUY ONE SPECIFIC product, get a complementary product of choice from a specific collection free.
BUY ANY PRODUCT get a specific product free.
BUY ANY PRODUCT get a complementary product of choice from a specific collection free.
BUY ANY PRODUCT or a specific product, and get a surprise gift with purchase.
THE 2 STEP GIFT - Receive a small gift for the first purchase and a bigger gift for next purchase.
3. DISCOUNT OFFERS
We all know that frequent unplanned discounting can weaken your brand. However, when done strategically with the right timing, reason, and customer journey in mind, discounting can be an incredibly powerful customer acquisition tool. In fact, it’s more often than not THE acquisition tool.
With this in mind, often a free gift of equal value or a tripwire offer can convert better than a traditional discount. Remember, testing is key to finding what works best.
Cash Value Discount: Typically applied using a discount code, this reduces a product’s price or your total basket value by a specified amount.
Percentage Value Discount: This discount is usually applied automatically to a single product or your basket value at checkout, or your customer may need to enter a discount code. Be mindful of the rule of 100 which I wrote about a while back now, you can read the post HERE.
Reason Why Sale: These are sales with a specific purpose, such as seasonal promotions (e.g. birthday sales, Black Friday, summer sales) or clearance sales. These sales are planned to reliably move a lot of stock at reduced prices within a set timeframe (urgency).
VIP Discounts: This strategy involves offering unique discount codes to specific groups within your customer segment.
Early Bird Discounts: These create hype and build demand for product launches or sale campaigns (e.g.first access to Black Friday deals). They not only drive faster sales but can also sell out products before the official sale starts. Early bird discounts also reward your loyal customers.
Limited Time Offers: Time limits create scarcity, which in turn prompts quick decision making.
Price Matching Offer: Though less common among online stores, businesses that compete on price (such as resellers) can offer this. It can build trust by ensuring customers are getting the lowest price.
4. FREE SHIPPING OFFERS
Shipping costs are one of the top reasons shoppers abandon their baskets, I’m sure you’ve been there yourself at some point. One of the best ways to reduce basket abandonment and boost conversions is to offer free shipping. You can also combine free shipping with other offers to maximise value, such as ‘free gift with purchase plus free shipping’ or ‘20% off plus free shipping.’
Your free shipping threshold is always a bone of contention for business owners - what should it be? Generally 20% more than your average order value is about right, but it relies on the fact that you have items they can add to their basket to tip them over the edge. It’s highly unlikely they’re going to double their spend to reach the threshold so bear this in mind. (This is something I cover much more in my Membership).
Here’s some examples of how it can work.
Free Shipping on all orders - Offering free shipping on all orders is a highly effective incentive, especially when paired with a time limited sale.
Free Shipping for a minimum spend - Shoppers receive free shipping once their cart value reaches a specific amount, like free shipping on orders over £100. Use display banners and announcement bars to remind shoppers how close they are to the threshold, such as ‘you are £15 away from free shipping! Messages at basket.
Free Shipping for a certain product spend - This incentive encourages shoppers to add more items to their basket. Once they add one item, a display banner or announcement bar can prompt them with a message like ‘add one more item to be eligible for free shipping’ or the likes, increasing the average number of items per order and hence your average order value too.
5. URGENCY OFFERS
Scarcity and urgency are the most powerful purchase motivators for your customers. Scarcity arises when customers believe there's a limited supply of the products they want, pushing them to buy now. Urgency, on the other hand, is driven by a perceived time constraint, creating FOMO and compelling them to make an immediate purchase.
You can use both of these alongside discounts but it’s not always needed. High end fashion brands, for instance, often leverage scarcity to create demand while maintaining their price. Take Yeezy trainers, for example. These brands never offer discounts but might release only 50 units, each accompanied by a signed card from the designer. If done correctly, these items sell out quickly but it’s all about driving the demand and desire and teaching your audience how it works.
Here’s some tactics:
Low Stock: Create a sense of scarcity by informing customers that stock is running low.
Limited Edition: Highlight that a limited supply was made and won't be produced again, making the item unique and exclusive.
Flash Sale: Typically featuring steep discounts, flash sales drive immediate purchases with their surprise element and clear deadline. Shorter flash sales create more urgency. Adding a countdown timer can heighten this effect.
Deadline: For occasions like Mother's Day or Christmas, emphasise the deadline to order by to ensure timely delivery. Adding a discount or gift with purchase within that deadline can further motivate buyers.
Last Chance: Send a final reminder to act on a previous offer, creating urgency by letting customers know the offer will soon expire.
Last Chance Pricing: Inform customers that prices will increase soon, encouraging them to take advantage of current lower prices before they go up.
That’s a wrap…
And that’s a wrap, 5 different types of offers you can now go off and try. Remember, it’s all about trial and error. I’d love to hear how you get on with them, and what you find works best for your business so please, get in touch and let me know.
If you found this useful then why not check out my private membership where you can really level up your business! It’s £1.09 a day which is a no brainer and you get your first week absolutely free!
See you in there!