Conversion Wednesday – The Discount Effect

By Dan G


Welcome to Your Daily Concept, Get Smarter Everyday. This is our 4th installment of the Conversion Wednesdays series. Our topic of the day is “The Discount Effect” on your site. I’ll be your host today, my name is Dan G.

Coupons and Discounts can be a great catalyst for getting shoppers to buy from your business, and they can be placed anywhere on your site.

From my experience as part of Exclusive Concepts’ Conversion team, and more specifically, with our multivariate Conversion Booster program, I’ve seen conversion rates increase upwards of 30% with strategically placed coupons & discount offers. Thats an extra $300,000 a year for a store currently doing $1 million annually.

It’s not as simple as just throwing up a coupon, though. Before you start considering what coupons you’ll use on your site and how, you need to take a series of steps that include identifying your conversion rate bottleneck. You also must consider what segment of your traffic would be interested in coupon-based promotions. Those steps can be analyzed in full detail like our team does for Conversion Booster clients, or just at a basic level of consideration which you can do for your own store. I advise watching past Conversion Wednesday videos to learn this process better, primarily the first one titled “Identifying Conversion Rate Bottlenecks”.

After you’ve done your preliminary analysis, put yourself in your shopper’s shoes. How can you grab your customer’s attention and incentivize them in a way that you’ll actually see a change in their conversion rate and average order value? You can offer shoppers a percentage off their entire order or a “buy 1, get1” and “buy 2 get 1” types of discounts, incentivizing them to buy more product. You can also offer free gifts with the purchase of certain items, or any item in general.

You can offer “Free Shipping” on orders over a certain amount or on certain items. If you have an e-mail newsletter you can offer limited time discounts to current subscribers or discounts to new subscribers to increase your return customer rate. Alternatively, you could also offer similar limited time discounts, say for the month of X after a shopper completes their purchase to retain their business in the future. Another option is to offer discounts on certain products to get shoppers into your site and interested in browsing other products your site has to offer – this is often done through a clearance section on your site.

Which option is the best? Statistically, Free Shipping tops the list of documented factors that make the most significant improvement to conversion rates. That being said, I have been privy to tests of all these options and can say that each has its own merit. Once tested, you can identify which promotion is the most useful on your site, when they should be used, and with what combination of user and product.

As you can see, there is a multitude of ways you can offer coupons and discounts to increase your site’s conversion rate and average order value. In addition to all of the ideas listed, I’ll note that placement, size, and color schemes of these ads are also a huge factor in growing awareness of the offers in the first place. There are obvious ways to get customers to notice your ads, such as using a large font-size or simply increasing the size of the ad. Beyond those methods, loud colors such as red, orange, and yellow (or just choosing colors that are contrasting to your site’s color scheme) can also help generate awareness of your ads. The placement of the ads is a whole other can of worms. Generally speaking, you want to make sure the ads appear above the fold on any given site page (and by that of course I mean that the user doesn’t have to scroll after the page loads to see your ad), and depending on the type of ad, you’ll want to carefully select which pages it appears on to maximize customer interest, such as the product pages, the category pages, the home page, the shopping cart, etc…

But there is only one way to be certain that your choice is the right one for improving conversion rates, and that is testing. By testing various combinations of coupons and discount codes on different pages throughout your site, you can find the magical combination that will increase your conversion rate. That’s where we can help.

Exclusive Concepts offers a full service testing option for our clients called Conversion Booster. Through the program, we will do the work for you and analyze your customers shopping behaviors to determine the best placement for your coupons and/or discount codes and maximize your site’s conversion rate. Every idea will be conceived from thorough analysis and every hypothesis will be tested to statistical significance. Give us a call at 1-800-504-4324 if you’re interested in learning more.

We would be happy to perform free conversion opportunity audits for qualified websites.