How many discount emails and texts do you have in your inbox right now? And how many do you actually open?
Probably not many, right? Inboxes are flooded with generic offers. It’s easy for those discounts to get lost. But what if they were just for you and showed up at the perfect time? You’d be more likely to open and use them.
That’s because people not only crave personalized experiences but also that should reach them at the right time.
Personalized discounts can make a huge difference in eCommerce. They help you stand out in a crowded inbox and build lasting loyalty if that reaches the right time (you must be wondering how? That’s where the email and SMS automation tools come into the picture.
In this guide, we’ll show you how to use them to keep your customers coming back. Let’s get started.
Understand the benefits of personalized discounts
Personalized discounts are designed to delight one specific customer. They may be based on their past search history or tailored to their shopping habits, but how do they analyze it manually?
Personalized discounts make your customers feel special. And they come with some great benefits for businesses, including:
- More loyal and happy customers: When customers receive tailored experiences, they feel valued and a greater connection to your brand. Their personalized discount also means they’re more likely to get what they want, so customers are happier and more appreciative.
- Better customer engagement: Many shoppers feel that the experience a brand provides is just as important as its products. Personalized discounts can make that experience memorable. When customers get offers that resonate with their needs and preferences, they’re more likely to engage with your brand. This can lead to more interaction, feedback, and, ultimately, more revenue coming into your company.
How to use personalized discounts to boost customer loyalty
Now, it’s time to get practical with some tips on how to use personalized discounts.
1. Gather and analyze customer data
First things first, you’ll need to collect as much customer information as you can. Find out what they’ve bought before, what they look at online, and what they’re interested in.
Remember, though, that this needs to be done ethically. Trust is a major factor in the success of personalization efforts. As of last year, 51% of consumers said they trusted brands to keep their personal data safe and to use it responsibly. While that’s over half, it still means an enormous 49% might not trust how you’re using their data.
You should make sure you gather and analyze data from a wide range of sources using loyalty tool. Combine data from your CRM and any customer interaction logs you have with data from your automated billing software. This will help you gain both customer insights and pricing information, guaranteeing that your discounts are not only personalized but also strategic and impactful.
Image sourced from segment.com
2. Segment your customer base
Break down your customers into groups. Think of it as akin to sorting your friends into different squads based on their likes and what they do. Some might be into sports, hitting the gym every weekend. Others might be fashionistas who love shoe shopping.
For your business, you can divide them into lots of different categories, such as:
- Their demographics: Age, gender, location, income level.
- What they like to buy: Their favorite products, brands, or categories.
- When they like to buy: Seasonal preferences (e.g. Black Friday/Cyber Monday), shopping habits, time of day.
Once you’ve got them sorted, you can start creating those special discounts that fit each group perfectly.
Say you’ve got a customer segment of young adults (aged 25-30), mostly women, living in urban areas. They love luxury fashion brands and enjoy shopping online during the evenings. For this group, you could use your email marketing skills to send a friendly evening email with a note such as, “Hey, fashionista! Treat yourself to 20% off your favorite designer brands tonight only. Use code FASHION20 at checkout and shine bright this season!”
3. Develop personalized discount strategies
There are so many ways that you can use discounts to get loads more leads and sales for your online store. The strategy you choose is ultimately going to depend on your company’s goals and also the leads themselves.
Let’s take a look at some of the more popular discount strategies out there:
- Buy One Get One Free (BOGOF): This is a classic. It works great for products that people buy a lot and is perfect for getting customers to add more items to their carts. You can also play around with and adapt this a bit. For example, you could offer a “Buy one, get one 50% off” deal.
- First-time customer discount: Looking to convert brand new leads into winning customers? Then this could be the solution for you. It lets you attract first-time buyers by offering them a special price. ClassPass are a great example of this. They offer free credits to first-time users to help them become loyal customers.
- Free shipping: Nobody likes paying a small fortune for shipping and a lot of customers abandon their carts because of it. By offering free shipping, you can push them to complete the purchase.
- Early bird VIP discounts: This one’s brilliant for making your customers feel really special and important. You can reward your most loyal, die-hard fans by giving them early access to sales or special discounts.
4. Implement personalized discounts in your eCommerce platform
Now that you’ve got the lowdown on your customer’s shopping habits have sorted them into groups, and come up with some discount strategies, it’s time to get them rolling out on your eCommerce platform either by sleek widget or rewards page.
The best part about this is that you don’t have to do this manually (which would likely take days!). You can use your eCommerce platform’s tools like BayRewards, Smile, and LoyaltyLion to automate the delivery of these discounts based on customer actions. This guarantees that the right offer reaches the right customer at the right time, increasing the chances of conversion.
5. Communicate personalized discounts effectively
Sometimes, it’s not what you’re offering but how you’re offering it that makes all the difference. When you’re sending out personalized discount emails, the way you talk about the offer can really impact how engaged your leads will be and your chances of them converting into customers.
Not got the faintest idea of how to do this? Don’t fret. We’ve got some winning tips to help:
- Personalize with names: Use your customer’s name in the email to show the discount is just for them.
- Stick to the 3 Cs: This is a golden rule in copywriting. When writing, you need to be clear (use simple language with no jargon), concise (short and sweet), and compelling (use power words).
- Mention the benefits: Explain why the discount matters to them. Show them how it saves money or fits their needs.
- Create urgency: Nobody likes feeling FOMO (Fear Of Missing Out). Use phrases such as “Limited-time offer” or “Offer ends tonight” to make them act fast or risk missing out on a brilliant deal.
- Time it right: Send emails when your customers are most active. If they’re night owls or love shopping on their morning commute, send emails then. It’ll increase the chance they’ll open and use the discount.
- Manage your stock: There’s nothing worse than spending ages perfecting your messages and getting your customers to buy, only for them to find out the product they want isn’t in stock. Use inventory management tools to track stock levels in real-time and update your discount messages fast. This way, customers won’t be let down at checkout.
6. Measure the impact of personalized discounts
What happens after you send those sweet discounts? Well, that’s what you need to find out. After all, you can’t just throw out deals and hope for the best. You need to know if those discounts are actually making a difference, right?
Track how many people use those discount codes and coupons you sent them, how much they spend, and if they stick around after the discount period ends. This gives you solid data on whether your discounts are working or if you need to make some tweaks.
Your ecommerce platform should have analytics tools that crunch the numbers for you, giving you insights into what’s working and what’s not. Make sure to compare this data with your regular sales figures to understand the true impact.
7. Continuously optimize your discount strategy
Once you’ve started implementing those personalized discounts and measuring how they do, the next step is to keep refining and improving.
The key here is to avoid a “set it and forget it” mentality. You should regularly review your discount performance data and look for patterns and insights that can help you fine-tune your strategy.
If you notice certain discounts aren’t performing well, adjust them. You could tweak the offer amount, change the timing, switch up the subject line, or target different customer segments.
A great way to determine what works best is to perform A/B testing. That means sending out two versions of your promotions with one big difference to see which one gets a better response from your customers.
By constantly tweaking your discount strategy based on what the data tells you, you’ll make sure your efforts are really hitting the mark. You can boost customer engagement, build loyalty, and, of course, grow your business in the process.
Final takeaway
So there you have it—our complete guide on using personalized discounts to boost customer loyalty in e-commerce. We’ve covered everything from understanding your customers’ habits to creating and using discounts effectively. The trick is to make your customers feel special by offering discounts that match their interests.
By using data, talking clearly, and always improving your discount strategy, you can make customers happier, keep them coming back, and help your business grow.
Start small, see what works, and keep tweaking your approach to strengthen your connections with your customers through personalized discounts.
Happy discounting!
