The four rules for successful e-commerce promotions

Author: Nicolás Ortiz
Date: 2021/07/05

In an increasingly competitive environment, e-commerce companies are faced with the challenge of remaining visible and relevant to their customers. Only after online shops are viewed as user-friendly and relevant can visitors be converted into loyal customers. Here, the principle “good experience is good business” applies. The user experience should also be the focus of sales and promotions. The following four rules and dos & don’ts are important for successful promotions.

#1 The benefit, value, and condition of the promotion should be easy to understand

The benefit and value of a promotion must be easy to understand for customers to develop any interest in it. These dos and don’ts show what that means:

Do: Free gift on purchases above €50 (€15 value). Click now.
Don’t: Get 15 loyalty points on purchases above €50.

Note how the first example (Do) makes both the benefit (“free gift”) and the value (€15) clear. The second example (Don’t) looks rather unclear: If a new customer is unfamiliar with a brand’s loyalty points, they will not understand the benefit and value of this offer. Customers can only be sure that they have found a great deal if the conditions of the promotion are easy to understand.

Customers also need to know how to take advantage of the deal. Where should they click, which button should they press? If the conditions of a promotion are too extensive, misleading, or possibly buried under footnotes, this will negatively affect the trust between the customer and the brand. They will not give the vendor their money or their data. The consequence: Despite the promotion, the vendor walks away empty-handed. A dedicated landing page for the respective promotion can help display the conditions clearly and clarify open questions without distractions.

#2 Purchasing within the promotion should be as simple as possible for the customer

Customers want to be able to take part in a promotion as quickly and smoothly as possible and benefit from it – additional steps and distractions up to the purchasing process are merely disruptive.

Do: An info box in the product detail page close to the “Add to cart” button informing about a promotion applying to this product. A promo code is directly provided.
Don’t: A promotion banner on the homepage informing about a product promotion, but no more information anywhere else along the customer journey.

A customer journey is rarely linear – especially in e-commerce. Customers jump back and forth between pages, get to the shopping cart several times, or interrupt the checkout process. Therefore, companies should remind their customers of the valid promotion at every opportunity. A banner on the homepage alone is not enough; information on the homepage should be supplemented by pop-up windows or additional info boxes in the product detail pages and the shopping cart. Similarly, this applies to promo codes. Up-to-date promo codes should also be available everywhere on the website, ideally as copyable text. Nevertheless, the rule of thumb for promo codes as well as minimum order values is to only use them sparingly. From the customer’s point of view, they make the purchasing process seem more complicated than it should be.

#3 The promotion should be targeted at specific customer segments and be available for a limited time

Customers only want to see promotions that are relevant to them and give them the feeling that they can get a particularly good deal in a limited time.

Do: Blanket discounts combined with specific offers for newly registered customers within a specific promotional period.
Don’t: Only blanket discounts that always apply.

Some promotions aim to increase sales by offering blanket discounts (“Free shipping on all orders”). However, a much more promising approach is one in which companies tailor their promotions precisely to individual customer segments. The better companies understand who their customers are and what they want, the better they can target their own products and services. By adding a time limit to the promotion, companies can trigger the “fear of missing out” (FOMO) – in this case, the customer’s fear of missing out on a great deal. With a tailored, limited-time offer, customers will see a unique opportunity they do not want to miss.

#4 The applied promotion should be visible in the checkout process

Customers want to know that a promotion has been applied to their order and that they are getting the benefit as expected. The magic word here is transparency.

Do: Clearly display in the shopping cart and order review the applied promotion and the benefit, e.g., “10 per cent welcome discount”.
Don’t: Show the total sum in the shopping cart without highlighting the applied promotion.

Companies should clearly show customers whether all promotional conditions have been met, whether the expected benefit is taking effect, and how this will specifically affect their order. This way, customers feel empowered in their purchase decision, and the overall experience is positively influenced.

In any case, online shopping carts are probably the trickiest point on any user journey. At this stage, customers often ponder, hesitate, leave, come back, calculate, and compare before either walking away completely or ordering. A particular promotion can be the deciding factor in choosing between Shop A or Shop B. This is exactly why it is important not only to transparently communicate whether customers are benefitting from a particular offer but also to show them why this is not the case – regardless of whether the reasons are technical or the conditions have not been met. In the latter case, they should be shown the steps they can take to benefit from the promotion.

If companies take these four points to heart, they will provide their customers with an optimal shopping experience throughout the entire customer journey. On top of the promotion’s positive outcome for the vendor, the satisfactory shopping experience will also be associated with the brand. A company’s position in the highly competitive market is strengthened in the long term by customer-oriented promotions.

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The four rules for successful e-commerce promotions

Author: Nicolás Ortiz Date: 2021/07/05

#1 The benefit, value, and condition of the promotion should be easy to understand

#2 Purchasing within the promotion should be as simple as possible for the customer

#3 The promotion should be targeted at specific customer segments and be available for a limited time

#4 The applied promotion should be visible in the checkout process

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