6 Ecommerce Discount Mistakes That Can Harm Your Brand


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Have you ever discounted some product on your eCommerce site and watched it backfire hours after activating the promotion? It seems like a discount is a simple way to increase sales or drive more traffic to both online and offline stores. But smart marketers have realized that not every sale is profitable. Sometimes it’s because we set unrealistic expectations. But in most cases, brands drop prices without considering their impact on the brand. Here are 8 eCommerce discounting mistakes that most marketers, who are journeying in the field of eCommerce, often make.

The purpose of providing an eCommerce discount promotion

eCommerce Discount
eCommerce Discount

eCommerce stores offer discounts for the same reasons as offline stores. Discounts are a quick way to attract customers, but they shouldn’t be the main reason you’re discounting. If you only treat eCommerce discounts as a sales strategy, you minimize their power. In addition to increasing sales, discounts can do more for your brand if they are well thought out.
So when it comes to eCommerce discounts, increasing sales should always come second and let your brand drive the whole strategy. Creating a positive brand experience should be the main reason you’re discounting. So, before you come up with a discount strategy, think about the following questions:

  • What impact will a discount promotion have on your brand?
  • Will it add or reduce brand value?
  • Does an eCommerce discount strategy create a positive brand experience?
  • You may want to increase your brand loyalty and awareness through discounts, but still don’t want to hurt your profit margins. So you must offer eCommerce discounts that don’t affect your profit margins.

8 mistakes to avoid about eCommerce discounts

1. Confusing a discount strategy with a discount campaign

Ecommerce Discount
Confusing a discount strategy with a discount campaign

Many people often confuse a bearish strategy with a tactic. The discount strategy describes the destination (what you are trying to achieve), while the discount strategy outlines the specific actions that will help you get there.
Example: If your eCommerce discount strategy is to increase brand awareness, your discount tactic could be to reward customers who share your products on their social media accounts. their association.
But if your discount strategy is to increase customer loyalty, the best tactic might be to offer discounts to all who sign up to become members of your brand.
Offering an eCommerce discount without a clear definition of what you are trying to achieve is an unwarranted risk. That’s how businesses will hurt their brand value in the long run or cut their profit margins. The discount strategy itself doesn’t work unless it’s rooted in your overall brand. So, the route you should use when creating an eCommerce discount would be as follows: Brand => Discount Strategy => Discount Tactics.

2. eCommerce discount strategy doesn’t match the brand

It is better not to discount than to launch a discount program that will reduce the value of your brand. Your sales can still be boosted, but a damaged brand won’t mean anything. Tailoring your discount strategy to your brand isn’t easy, but it’s certainly profitable in the long run.

3. Discount as a sales strategy

eCommerce discount
eCommerce discounts as a sales strategy

Offering discounts as a sales strategy is good when you intend to get rid of products that are on sale or liquidate old inventory. But if you’re only rolling out discounts on any type of product, you’re also making your customers in the habit of waiting for a discount before buying any product. In the long run, this will eventually cut profits or reduce your brand value.
JC Penney is a perfect example of a great brand that learned the hard lesson of offering discounts as a way to boost sales. As expected, sales increased of course, but the problem was that when the company tried to get rid of this discount strategy, sales began to plummet, and even when JC-Penney tried to get back to the In old strategy, the customer’s view of the brand was very negative. Even to this day, JCPenney is still trying to recover from that damage. So does this mean that brands shouldn’t see discounts as a sales strategy?
You might choose this strategy if your ultimate goal is to liquidate inventory. Or you can be tactical in your approach and target different customer groups for discounts that emphasize brand and product values.

4. Offer complex discount promotions

Complicated discount promotions always ruin a positive customer experience, and they are the killer of many potential conversions on eCommerce sites. You can’t expect customers to have a super-fast brain to understand a discount promotion and make a purchase decision at the same time.
Here are some examples of complex discount promotions:

  • Buy more than 5 products of class A, B, and C to get a discount for class E.
  • Buy product A at the original price, get a second product with a 40% discount, a third with 30% off, and a fourth with 20% off.
  • Buy any 3 quantities of Products A, B, C, or D and get 10% off. However, there is no discount if the customer purchases Products B and D.

It will take a long time for customers to understand these discount rules.

5. Products with strong discounts

No matter how large or small your eCommerce store is, offering steep discounts as a way to lower the price of goods is a serious mistake that will affect your bottom line. Before you decide on a deep discount (more than 50% off the regular price), every eCommerce marketer should at least answer these questions:

  • Will the discount attract the customers we want?
  • What impact will deep discounts have on brands?
  • How do you plan to prove the value after the discount ends?
  • Have you optimized the price and value?

The main problem with steep discounts is this: they ask you to sell more items to meet your monthly quota. The profit margin you lose due to a price drop must be made up for future opportunities, forcing you to work harder to sell and close more deals at a higher price to compensate.
The other thing is that deep discounts always say something about your product’s value. You can increase sales but on the other hand, deep discounts will lower your brand value. Since customers love to buy products at a discount, the drastic discount raises questions like: Is the quality of this product that good?

Humans naturally tend to get annoyed when something seems too good to be true. And this feeling also comes when we come across a product with a strong discount.

6. eCommerce discounts without tracking and metrics

 eCommerce discount
Measure eCommerce discount strategy metrics

One big mistake you can make when running a sale is ignoring metrics related to the product or service being discounted. Running a successful discount strategy requires a thorough analysis of the results. And this is not possible without tracking and measuring the relevant metrics. Discount metrics are data points that represent the performance of a discounted product or service over a given period. When tracked and measured correctly, discount metrics can help you see if the eCommerce discounting strategies or tactics you’re using are working.

The type of metrics you must track depends on your discounting strategy, as well as what you are trying to achieve. But the most commonly tracked discount metrics include:

  • Profit: It is important to evaluate the impact of promotions on profits because promotions can lead to higher sales but lower profits.
  • Sales volume: To accurately measure the increase in sales volume, you need to know what sales were before the promotion and this means that you will have to use both your collected and the data you collect for the duration of the promotion. promotion.
  • Customer Satisfaction: This is a key metric for customer loyalty and long-term brand conversion, so you must measure customer satisfaction by collecting data to accurately measure customer satisfaction with your discount and with your overall product.
  • Achieving Goals: If you’ve set goals for your rebates, why not measure them? Even if your discount promotion isn’t as “successful” as you intended, having accurate measurements of all the factors at hand will allow you and your team to identify areas that need to improve.

If you run an eCommerce site, chances are you’ll have to drop the price at some point. Therefore, it is important to consider discounts as one of the extremely powerful tools that can help increase brand awareness and customer loyalty, If used improperly, commercial discount electronics can be ineffective, or worse, can be detrimental to your brand. If severely abused, they can even cost your company a serious amount of money. This is why you should do whatever is necessary to avoid the aforementioned pitfalls.

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