This is the ugly truth about site-wide discounts.
We’ve all walked by giant posters on the windows of a retailer promoting their largest discounts to every single potential shopper that walks by and cringed at the sight of their unsophisticated tactics. The reality is, your brand is likely doing the same thing but digitally. Would you seriously consider giving someone a discount if you knew they would buy your products without one? If yes, please stop reading now.
Historically, a marketing team with goals based on top-line revenue would only care about the deepest discount necessary to drive revenue, regardless of profitability. With internal incentives aligned for more and more organizations, now is the time to look at promotional strategy to improve gross margin, not just protect it.
Similarly, an Offer Management Platform, or OMP, is the technology to execute and manage this dynamic discounting strategy. OMPs usually have staff that specializes in effective and targeted discount strategies, so if your org needs help there, you should be covered. When combined, these solutions can deliver a way to decide and deliver personalized discounts to site visitors in lieu of the “30 percent for everybody” that is just plain stupid for the business’ bottom line.
The other groups of customers are either slightly or moderately discount sensitive. That means that some customers would likely pay full price but are using a discount code because that’s what you are putting right in their face when they hit your site. Other customers would likely purchase with a lower discount. Giving a customer a 40 percent discount code when she would be happy with 20 percent is no longer crystal ball theory.
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