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How Promotions Change Customer Behavior

May 1, 2015 8:00:00 AM  |  BY: Grant Thomas

Shoppers are set in their ways. Your experience with shoppers in ecommerce most likely has you frustrated. First, the majority of people coming to your website will leave without purchasing. Second, shoppers may have the intent to return and make a purchase but that doesn't always happen. So what can you do to change your customer's behaviorand get them to either purchase or submit contact info? The answer is to engage shoppers with on-site promotions to influence their decisions. Promotions, when properly run, increase sales by influencing shoppers to make a purchase. Let’s take an in depth look at how promotions change customer behavior.

Types of Promotions:

Dollar Amount or Percentage Off

The most widely used type of promotion. Discounts work because they display an actual value to the customer. For example, if there’s a 15% off promotion running, you know that you’d pay 15% less than you would otherwise. Discounts can be for specific items or all items depending on how the promotion is configured.

Free Shipping

Potentially the most powerful promotion for actually influencing a purchasing decision. Free shipping is the most valued factor in the online shopping experience and can significantly increase the amount of sales conversions on your site. Shipping is different for each business which makes it difficult for some businesses to offer this promotion.

Gift with Purchase

A simple way to drive more conversions and build relationships with your customers is to offer them a free gift with purchase.

Threshold Promotions

Make specific discounts or shipping options available to shoppers who have orders over a threshold. For example, offer “Free Shipping on orders of $50 or more” or “Get 15% off of orders of $100 or more.” This is an effective way to increase your customer’s order sizes!

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Promotions Generate Customer Interest

An effective sales promotion will grab people’s attention and bring more visitors to your site because they are interested in the offer. The first step to any great promotion is creating value that can evidently be seen by your customer base. Advertise your promotion via email, social channels, and even PPC ads to generate that interest and drive traffic to your website.

Promotions Keep Shoppers on your Site

Using promotions on-site reduces bouncing visitors and cart abandoners by giving them what they would normally go elsewhere to look for. Shoppers largely leave a site to hunt for a coupon elsewhere or compare your prices with a competitor. By engaging your shoppers with a promotional offer, you can eliminate two major causes of leaving visitors.

Promotions Create Urgency to Purchase

Customers understand that promotions aren’t always available to them when they are looking to purchase something. This creates scarcity and therefore exclusivity with your promotion which can get your shoppers to purchase sooner. You can also create urgency within your promotions by implementing a time limit so shoppers know they need to purchase sooner rather than later. This created urgency is an effective way to move customers past the purchasing threshold where they ultimately decide to buy from you.

Promotions Influence Customers to Buy More

When a shopper receives an offer for a discount or free shipping, one of their first thoughts is “How can I get the most out of this offer?” The answer to this question is to purchase more so they receive more discounted merchandise. By using threshold promotions, you can put parameters in place so customers will increase the size of their order to receive that value.  A study by Compete found that 93% of online buyers are encouraged to buy more products if free shipping options are available. In addition 39% of shoppers would purchase enough to reach a free shipping or discount threshold. In short, promotions don’t just get people to buy from you, they get people to buy MORE from you.

Promotions Drive Shoppers Back to your Store

If an individual receives a discount or is influenced by another type of promotion, they are more likely to return to your site looking for a similar offer. While I do agree that this can create an expectation from shoppers, I’d argue it to be more of a benefit. Repeat visitors and customers are much more familiar with your website and product offerings which means that much of the legwork has already been done. You just need to get them to purchase. Think about potentially having some promotional offers for repeat customers as an incentive to return.


Takeaways

No matter what you’re selling, we can all agree that promotions are a valuable part of ecommerce success. With that being said, every business should choose their promotional offers strategically. Crunch some numbers and figure out what discounts you can offer, what your promotion thresholds should be, and how long and how often you should run your promotions. Over time, you’ll gain a much better understanding of what works with your customers. Break the mold by using promotions on your site!

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Topics: Conversion Optimization, Promotion Strategy