Promotions done right can dramatically improve sales since up to half of all consumers make a purchase in response to a promotion. The hard part for e-commerce site managers is deciding what should be marked down and how to manage and advertise discounts. In this article, we’re going to lay down the basics of proper promotion management to help you make the most out of your promotions.

Define Your Objective

Why exactly are you considering sales promotions? Are you trying to increase sales volume? Are you trying to lure in new customers? Are you trying to grow faster? Do you want to reduce shopping cart abandonment rates and increase conversions?

The overall objective of the promotion will provide both an overview of how to market the promotion and the types of promotions to aim for in the first place. A single promotion may achieve more than one objective at once, but it can’t do everything. Understand your main goal so you can target the right audience with the right incentives.

Do Your Research

Don’t assume that doing what your rivals are doing will work for your customer base. An across-the-board 10% discount may not make a difference except cutting into your profit margin.

For example, while more than half of businesses polled agreed that flash sales were better received than regular sales by tapping into a sense of urgency, they didn’t always work. Data analysis of customers’ buying history can give your organization insight as to which promotions have worked well in the past if you’re targeting your current customer base.

Run the Numbers

Many businesses are afraid to offer discounts because it could destroy profit margins even as it increases sales. You need to make sure your sale doesn’t cost you money overall. And you shouldn’t mark things down to the point it hurts your brand. If the discounts are too great, customers may suspect goods are poor quality and not buy. Running sales too often can hurt your company if it trains loyal customers to wait until the next sale to buy.

Choose the Right Items to Promote

Promotions done right will boost sales volume. However, you don’t have to promote everything. Consider promoting slow-selling and excess inventory. If you are cross-selling, align promotions for products that complement each other.

Understand what your customers value and buy together so you don’t recommend an unrelated item to them. Make cross-selling a convenience, such as offering accessories at a discount or for free to someone buying the main item. When you make it convenient for someone to shop at your site by providing everything they need, they will appreciate it.

Promotions don’t have to be an across-the-board discount or an extra like free shipping. You can offer discounts to your current customers if they refer a friend, turning the promotion into a marketing tool to generate new customers. Referrals like this will enhance brand awareness if nothing else, but it is also a good way to acquire new customers.



Another good way to decide what to promote is by studying what each customer segment buys. Recommend what that particular customer is almost certain to throw into the shopping cart. Customization speaks to your customers because it shows that you understand what they want and value.

Make Data-Driven Decisions

When you decide what to promote, the data collection and number crunching need to continue. With the right tools, run rapid test promotions in ecommerce and test things like changes to the user interface, the way promotions appear, or things like pricing and bundling.

Businesses should also test how they market the promotions themselves. Use social media to spread the news about the sale, then track how successful each marketing channel was. Watch which promotions result in more traffic to your site and which increase sales.

Track the demographics of your buyers as the promotion runs. Are you increasing sales among loyal customers and/or increasing the loyalty of your customers? Or, are you attracting the wrong customers? If too many buyers are price-driven and non-loyal, you’re using the wrong promotion. Track customer opinions so that you don’t hurt the brand through a lower perceived value.

Promote Your Promotions

Some promotions need to be advertised to get the word out. Social media is a cost-effective solution for reaching potential new customers. Emails to current customers will generate awareness of the promotion to those who don’t regularly visit your website. User-generated content is another way to build engagement with your brand. Or, you may find that industry influencers can be used to get the word out.

Determine When and How to Launch the Promotion

Traditionally, promotions are offered at the end of the week or month, to increase sales for that period. A discount here needs to be enough to convince someone to buy. Holiday sales are another common timeframe for promotions.

You should time promotions to lock in customer spending for these holidays while potentially leading to repeat purchases. Pre-launch offers are done before the product officially becomes available. Pre-launch promotions must be done before the launch to raise brand awareness as well as convince customers to buy.

Promotions are not just limited to making the quarterly sales figures or ensure that the new product sells well. Promotions may be used to reduce shopping cart abandonment rates. These promotions are based on the behavior of the individual customer. A popular tactic is sending someone a promotion for the item they left in the shopping cart, tacitly reminding them of the abandoned item while increasing the odds they’ll actually buy it. If you’re using promotions to retain customer loyalty, give promotions to them as an explicit thank you for signing up for a newsletter or offer loyal customers discounts not available to everyone else.

Conclusion

E-commerce promotions can improve brand recognition, generate web traffic, increase sales, attract new customers, and improve revenue. However, these only happen when they are managed properly. Prepare well for your next sales event to ensure its success.