Imagine you’re visiting an ecommerce website for the first time because you’re interested to buy something…
You found the product you’ve been looking for – and it’s 10% off. Score!
Feeling pretty great, you search for another product you like. After all, the first product you’re buying is 10% off already. You add another product to your cart and you see that it’s discounted as well.
Skeptical, you check out the brand’s product catalogue and you see that every product is discounted. There’s no specified reason or no holiday: all of the products are discounted just because.
At first, you’d buy it. A discount is a discount, after all. But after going back to the online store, you’d value the products less because the cost to purchase it isn’t much. Eventually, you’d think that this is too good to be true so there’s probably something wrong with the products, right?
This is the exact phenomenon that we’re trying to prevent: the death spiral of discounting.
I don’t want this to happen to you. That’s why in today’s short and sweet video, we’re going to talk about the heatmap method for better discounting:
Sure, knowing that customers rated discounts in email as the biggest influence on their purchase decisions counts. But this doesn’t mean you should just hand out discount coupons to everyone in your mailing list, of course.
Consider your prospects who recently gave you their email addresses to sign up to your mailing list. At this stage, they’re still warm leads, right?
They gave their email addresses as a way to engage with your brand, so you’re not necessarily required to give them a discount code at your first contact with them. You already got their attention.
Now, the story changes if after a week or two, they still haven’t bought from you. At this stage, they’re becoming less warm: there may be less interest or less engagement with your brand. This is when sending a small discount — $10 off their purchase or 5% off — makes sense.
This is what the Heatmap Method of Better Discounting is all about. Take every customer category (prospect, first-time customer, repeated customer, inactive customer) and place them on the “heatmap”.
Warm customers are those who are highly engaged, meaning, those who recently subscribed to your list, or those who recently bought from you.
Less warm customers are those who have been inactive for a specified time frame: those who’ve never bought from you, those who bought from you one year ago, or those who repeatedly bought from you in the past but abruptly stopped doing business with you.
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Your customer is “warm”? Don’t send an email just yet. They’re “less warm”? Better get started on sending those discount coupons.
Now, this idea isn’t limited to your customer categories only. You can apply the Heatmap Method of Better Discounting to your abandoned cart emails as well. For your first recovery email, don’t send a discount code yet. Remind them of their abandoned cart. Find out what stopped them from finalizing their purchase. Listen to what they have to say first.
Then, if by the second and third emails, they still haven’t made their purchase yet, then by all means, include a discount code in your email so you can motivate them to finalize the transaction.
Pro tip: most customers want percentage off discounts (35%) and free shipping (20%) so keep these in mind when considering what kind of discount scheme you’ll offer in your email.
The “colder” a customer is, the better it is for you to do discounting. Simple, sweet, and straight-to-the-point, right?
I hope you find this video helpful! Any insights you’d like to add? Let me know in the comments section below. See you next week! Ciao.