From the humblest mom-and-pop to the world’s largest retailers, discounts are a universally agreed-upon secret sauce to fueling business growth. 📈

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Discounts serve as a magnet to attract new customers while simultaneously acting as a glue that keeps your existing ones sticking around.

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In a world brimming with choices, a well-placed discount can be the nudge that turns a window shopper into a dedicated buyer. ⭐

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Discounts and offers are a strategic tool in your business arsenal that, when implemented thoughtfully, can help clear out old inventory, drive customer loyalty, and trigger sales during slow periods. 

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But before you slash the prices on your entire store, discounts can also have unwanted consequences:

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• Constant sales can lead customers to question the authenticity of your deals
• Skepticism can deter impulse buyers from your brand, as they might assume another sale is just around the corner
• Don't rely solely on discounts to earn your customers' loyalty. Quality should always be your top priority; customers often associate low prices with low quality

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To master the art of discounting, let's dip our toes into some of the most popular ways businesses work their discount magic. 🪄

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💲Percentage discounts

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FOMO is real. 

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And businesses know how to use it to their advantage—often through limited-time percentage discounts or sales. 🛒

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Such discounts aren't just useful to tempt shoppers with attractive price drops; they're also a savvy way for businesses to sell older inventory. 

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For example, companies like Asos frequently host "flash sales," where select items are discounted by up to 70% for a limited time. These sales give customers a reason to keep coming back to see what new deals they can score. 👍

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💸 Cashback

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On the other end of the discount spectrum, there are cashback incentives. When implemented well, these programs help customers associate their patronage of your business with direct personal benefits.

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For example, rather than offering a direct $20 discount on their products, CrossNet shifted to a cashback strategy, allowing customers to redeem $20 cash-back post-purchase. 

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It was a smashing success. 💥

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Only 15% of the people redeemed their cashback! Their conversion rates increased, adding 600% to their bottom line, while they retained much of their margins. 💰

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Even if more customers had redeemed, the fact that their average order value (AOV) is above $20 would have positively impacted their bottom line compared to offering a flat $20 discount.

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Money aside, the cashback offer not only boosted their brand image (a cut-price deal can seem like a value reduction, whereas cashback feels like a 'thank you' to the customer), it also nudged customer loyalty. 

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Cashback gives shoppers a reason to return and buy again. 🤝

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🛒 Re-engagement and abandoned cart discounts

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Let's be real: If you hear "I miss you" these days, it's probably from a brand in your email inbox. (Or you’re very into Blink-182!)

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It might seem odd, but this messaging effectively draws customers back after purchasing or leaving something in their cart.

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Check out this example of the organic skincare brand evanhealy’s abandoned cart strategy. 👀

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If a customer fills up their cart but doesn't check out, the brand swings into action, sending an email reminder about the 'forgotten' cart with a special discount code used to track the efficacy of the email.

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This approach works on two levels: it nudges customers to finalize a purchase they were on the fence about and keeps evanhealy top of mind. 

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⬆️ Threshold discounts

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At first glance, placing a discount behind a fixed-price threshold might seem like a tricky move. But guess what? Customers often willingly spend a bit more if it means they can access those sweet savings. 

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Brands also often tie free shipping offers to a minimum purchase threshold. It stings less when shipping costs are covered for larger orders. 

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Locally-owned dessert shop Valerie Confections used this strategy in an email campaign to keep their sales volume humming.

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🙏 Loyalty, loyalty, loyalty

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With rising customer acquisition costs, maintaining strong LTV (lifetime value) consumers is the lifeblood of any brand. 

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Sure, having a solid lifetime value across your customer base is essential, but it doesn't fully encapsulate the influence a single loyal customer can have on your brand’s image. 

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Beyond securing recurring revenue, strong customer loyalty births brand advocates who extend your reach through their personal networks and word of mouth.

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So, how have deals and discounts shaped your customer base? We're all ears.