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How To Boost Conversion with Automated Discounts

9 min read

There are discount codes, and there are automatic/automated discounts. Knowing the right pricing strategy requires a great deal of effort, especially in terms of experimentation. Knowing when to use either guarantees potential to maximize sales.

However, automated discounts can be correctly applied if customers are mandated to include every eligible item to their carts before checkout. Some of these items are those that must be purchased to be eligible for the discount. Others are given as part of the promotion. But to what end, you might ask?

In this article, we will dig deeper into the concept of automated discount and it can help improve conversion. Read on to learn more!

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The Concept of Discount Pricing

As interesting as discount pricing might be, there is a problem that businesses should be weary of. Lack of proper ground work will result in possible damage of the brand or in some cases, the discounts might cut into the profits.

Therefore, businesses have learned to adopt some means to guarantee benefits from discount pricing rather than damage.

First, it is essential to set solid objectives and be able to differentiate among approaches to reach the objectives. Also, being able to compute the metrics is a plus, as this would ensure that the goals are achieved.

Types of Discount Strategies for Businesses

Now that you have picked a sale or discount goal, you can now determine the pricing discount that suits the goal. There are certain common approaches you can adopt, and you are the liberty of choosing anyone you like. These include:

Bundled discount or group discount

Here, you just have to lower the price of a group of items purchased together — as against lowering the selling price of one service or product. The upsides of this type are: increased number of items, ability to sell both popular and not-so-popular products, and also, customers can try other products as they please.

Prepayment discount

In this type of discount, you offer a small discount to customers who have the money to pay for their desired products and services in advance before they receive them. This will help you build cash flow, and you can use the advanced payments to buy extra inventory, bulk supplies or other investments.

But note that this does not work with all businesses, only those products or services that require recurring payments. It is common among businesses such as software-as-a-service.

Volume discount

In a volume discount, the customers pay less per item if they are willing to buy the item in bulk. Others are event/seasonal discounts, free shipping, and buy one, get one free (bogo) discounts.

bulk discount example

Bulk discount in Ecwid store

What are Automated Discounts?

One common approach taken by small businesses seeking to boost conversion and move their sales numbers is to offer a discount. Some online marketplaces offer customers discounts. These discounts apply at checkout in different forms including automated discounts.

Other top-performing discounts such as free gift with purchase, subtotal, tiered promos, and BOGO are founded on the basis of spending thresholds.

Automatic discounts order subtotal

Automated subtotal discount encourages consumers to buy more to pay less per item

Besides, you also have to bear in mind that all brands have discounting plan. But those that implement and invest in it will be able to boast of improved customer loyalty and increased sales.

How to Boost Conversion with Automated Discounts

Online shoppers often receive discounts and coupons, reducing the need to pay full price. Retailers use these strategies to boost customer loyalty and enhance conversion rates. Automated discounts at checkout streamline the process, leading to a smoother shopping experience and increased order placement.

There are numerous ways to apply sales, discounts, offers and deals for massive conversions. Among these are:

  • pre-launch offers
  • abandoned cart offers
  • referral promos
  • exclusive social offers
  • customer loyalty offers
  • weekly/monthly discounts
  • exit intent offer
  • retargeted promotions
  • email/newsletter subscription offer
  • minimum purchase discount, among others.

Adopting the right type of discount can have a tremendous impact on sales.

For instance, about 97% of retailers said discounting is their go-to pricing strategy. On the other hand, using the wrong or an inefficient type can bring about adverse consequences.

Discount codes are generally used to promote a discount on a site to capture visitors’ interest, track conversion performance of partners, and improve the customer service or cart email campaigns that are no longer in use. Among these discount codes are buy one, get one free (bogo) discount and subtotal discount.

Meanwhile, the automated discount works differently.

First, you must find out whether your choice of ecommerce platform has capabilities to offer automated discounting or not. Specifically, you should be able to offer discounts that apply at checkout, and this can be in different forms: create percentage, buy A and get B automatic discounts or fixed amount. But note that while discounting is automatic, you still have an enormous control by the rules you set.

To boost conversion, with automatic/automated discounting, you can show your customers the markdown at checkout so they get to see the value you offer. You can also remove the original price and indicate the promotional price to show them the value they are getting.

And lastly, you can enhance the promotions’ flexibility by offering customized discounts through addition of a minimum purchase or quantity. Alternatively, you can also set conditions which apply the discount to unique collections or products.

Moreover, when you introduce automated discount at checkout, you have gotten rid of abandoned cart to a very large extent. Baymard Institute research says that over 70% of customers fail to complete their orders. But when you offer automated discounts, which customers get at checkout, you are able to close this gap, and possibly, eliminate the chances of incomplete orders.

Some of the pros of automated discounting are: elimination of data entry work required for discount codes, reduction in the number of steps required at checkout which consequently increases conversion rate, and ultimately, triggering urgency for an informed and better buying decision.

Final Verdict

Without doubt, the conversion rate in a business is a significant pointer to its efficiency. Given the fact that the majority of visitors will not end up as customers, it is important to consider different ways to boost conversion.

One excellent way to go about that is through an automated discount. In order to outlast your competition, you have to know and master proven ways to convert leads professionally and skillfully. Offering automated discounts is an effective way to boost conversions. In this article, we have looked into the different ways this works.


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About the author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

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