So you decide that you need an offer but you can’t decide what to run, now what?
It’s easy to get caught between a variety of offers and simply just go with what you know will work without properly understanding just how effective the results will be for you and the business!
We’ve worked with numerous clients who have struggled to scale results while maintaining a strong profit margin to match the results.
We get it... There’s so much to consider!
That’s why we wanted to break down some of our experiences and make sure you’re considering all aspects of your offer and not necessarily going in blind without giving yourself the best chance to generate the incredible results we’ve seen time and time again.
Okay, so where to start?
Let’s start with why we are offering the discount in the first place…
With the help of an offer, we see that the CPA (Cost Per Acquisition) is reduced as the offer is often eye-catching when implemented in headlines and creatives as CTR (Click-Through-Rate) improves, as well as purchase intent, reflected in the conversion rate. As a result, you’re getting more sales for the same amount of spend as you’re influencing purchase habits.
Maybe you want an offer to become more competitive, it’s a public holiday or you simply need to flush out old stock and improve cash flow.
Whatever the motivation, you need to establish your goals before you decide the best way to achieve that goal. For each of these goals, you can tailor your offer to better boost your performance without severely impacting your profitability.
So we’re going to break down the most common offers that people run and the best situations to use them in…
- Regularly the most effective offer given which see’s the greatest CPA (Cost Per Acquisition) as purchase intent is almost always increased.
- Flexible dependant on profit margins of each product. This allows you to test different values and adjust the offer depending on the increase in ad performance.
- Can be used both site-wide and on individual product lines.
- Perceived value is skewed for higher-value products. For example, 10% off of a £1,000 TV is significantly more than off a £20 t-shirt. However, the initial appeal and perceived value of the offer is often consistent regardless of the offer.
- Can be difficult to offer a strong % off sitewide if your product line only has a small profit margin already.
- Often results in significantly lower AOV (Average Order Value) as some orders may simply just be a purchase of the cheapest product.
Money Off Total Orders
- You can adjust the offer to be when people spend over a certain amount that they get the value discounted. For example, “When you spend £100, you get £20 Off Your Order”. This means that you can entice people to spend more, increasing your AOV, as consumers are willing to spend more in order to get a greater perceived value on their order.
- Can be used both site-wide and on individual product lines. If your product line has similarly large margins and price you often don’t need to worry about overcomplicating with conditions to bring up purchase value.
- If you have products which have very different price ranged, you may find that the discount provides a much greater value for some products and less for others.
- For this offer to be enticing and have substantial change it could need to be a strong value offered, so it’s important to adapt this offer depending on your profit margins. However, if you need to increase the value off, you can simply increase the minimum spend to match and compensate for the loss.
Buy One Get One Free Or 2 For 1
- This is a great way to reduce inventory as purchase intent often shows a significant improvement, you’re offloading twice the goods and turning stock into cash.
- AOV will not take a dip, but often increase as people are more likely to make the most of the sale and purchase more products for the duration of the offer.
- The production cost per sale doubles meaning you have a much lower profit margin to work with, meaning ads need to be generating a much lower CPA to create a level of profitability.
- Items with a profit margin below 50% will make a loss during this offer, so you may have to apply the offer to select items in order to maintain profitability.
Giveaways, Gift Cards & Prizes
- Easy to measure whether there has been an increase in performance equalling and summiting the value of your offer as your loss is only as big as your offer. Should you see a significant rise in performance of ads that include these types of offers, then you can easily work out how beneficial these offers have been in increasing purchase intent and revenue.
- Can often be run for a long period of time in order to ensure you receive maximum value for what you’re offering.
- By varying what’s on offer you can get creative and really tailor your giveaways to what your audience wants, increasing the interests and purchase intent as a result.
- You can decide how people are entered into the giveaway, whether that’s through purchasing a specific product, any product or simply joining your email list.
- It can be complicated communicating how the winner is drawn without using a lead generation funnel.
- Depending on your product line, you may need to offer a high-value product in order to generate the results you want.
So they’re the most common offers around, and while they’re not the only offers available, they’re often the types that generate the greatest change in ad performance.
But sometimes you’re not looking to offer a discount or obvious offer…
Maybe you’re just looking for some consistency.
One of the most simple thing you can offer is FREE SHIPPING.
With the likes of Amazon being a competitor to almost every e-commerce site in existence, you’re constantly faced with the notion that free shipping is expected from your audience… and from what we’ve seen, we can’t argue with that!
We see that by simply offering free shipping helps with consistent purchases and reduces the drop off rate for when people get to the checkout stage of the customer journey.
Reducing the number of objections consumers have after they have added to basket will undoubtedly increase the overall conversion rate and lead to more consistent purchasing habits from your audience.
Okay, so you’ve decided on your offer, now what?
There are a few key things still to consider:
How long to run the offer for - If a discount is running for too long, it can potentially change the perception of the brand and make it seem like a ‘discount brand’. Too short and you may not make the most of people’s purchase habits, however, short offers can often have higher discounts and drive higher urgency within a consumer.
Aligning the offer with an event - For example Black Friday, most companies are pushing sales that are at the greatest discount they will offer all year, however, you need to differentiate your offers depending on the event or reason you’re pushing a sale. People often purchase through associations and certain events can increase the appeal of your product, like Valentine’s Day for example. With so many daily holidays, it is imperative that you find the right public holidays that reflect your brand’s personality and ethos.
Testing - Initially, you need to go through different levels of testing and discover which style of offer works best for your brand. It’s not always the huge discounts which lead to the best results, but you need to find what works best within your audience and utilise what you have at your disposal.
Timing - Carefully timed launches can increase purchase intent during times that customer’s purchase habits are already high, using paydays, holidays or national events to choose your timing wisely to scale your results even further.
Well there you have it...
Creating and implementing offers sporadically throughout the year with real purpose and intent is never easy. If you are still unsure of what to try next, how to improve your results or where to turn after reading this article then you may be interested in undergoing a complete marketing audit where we can break down what you’ve done well, where you’re struggling and how to utilise offers to change your audiences purchasing behaviour.
Our in-house experts will dive deep into your current marketing campaigns and business strategy to identify exactly where you are leaving sales on the table and help scale your business to new heights.
Find out more about our onboarding process and how you can apply for our account audit and we’ll have you fully utilising offers to scale your business in no time!