Discounts, deals, offers, woocommerce dynamic pricing or whatever you wish to call it, is a marketing strategy with the ultimate goal of getting more people to purchase a product or a group of products.
According to microsoft.com “ Discounts are a specific type of marketing promotion in which you invite shoppers to save money on specific products or product groups. Discounts are a significant part of your online merchandising strategy. You can use discounts to introduce new products, retain existing customers, or drive revenue growth”.
In this article we will look at why, when, and how to use woocommerce dynamic pricing on your shop to retain customer, get rid of unsold stock and much more.
What are the advantages and disadvantages of woocommerce dynamic pricing?
There are numerous advantages and disadvantages linked to each type of woocommerce dynamic pricing strategy. To put in place a specific type of dynamic discount, having a deep knowledge of the advantages and inconveniences of each discount type is necessary. This will help you determine the discount needed for your goals to be achieved.
Pros
Increase customer loyalty
Empty a stock
Increase conversions
You can be selective
Cons
Drive non-loyal customers
Insufficient profit margin
Question your credibility
Competition with competitors
Knowing your target
It is necessary for you as a shop owner to have a target. If you don’t have a target when implementing a discount, it is as if you are shooting in the air. For example if your target is to increase your social visibility, the best discount strategy to use would be to give a social sharing discount or partner with influencers that can spread the word to a larger audience. This would help increase the visibility of your brand online.
Knowing your target can also entail geographical details, gender, and interest. These are all details to consider when setting up your discount.
However you will need to test the different types of discounts to determine the one that works best for your brand. The best strategy will be to start small so that you will be able to measure the impact over time.
You should also measure the goals reached in relation to the cost of the discount implemented, this will help determine if you have reached your goal or not!
Existing discounts
We have numerous types of existing woocommerce dynamic pricing deals. Some of the popular ones used are:
Free gift: giving out a free gift on a purchased products is a strategic way to increase order in cart or to get rid of unsold products.
Free shipping: is a strategy that can increase conversion, because this factor is one of the reasons why customers abandon their cart, you can try to balance the price margins of the product with shipping cost so as to offer the shipping cost for free. This can be a great motivator for the customer.
Discount on product price: this entails giving a discount in percentage form or a fixed discount off the product. This strategy can influence your customer to buy more of that particular product.
Discount on total order: This pricing system incites the customer to buy more. Giving a “the more you buy, the less you pay” type of discount, the customer will be pushed to buy more to gain a certain percentage off their total order.
When and how to use woocommerce dynamic pricing?
- Pre launch offers
These are offers that announces the release of a product, a service or a woocommerce shop. This is to get many people to endorse the product before it is released.
Example: A clothing brand is launching a new collection. They offer a 50% discount per user to everyone that shares their publication, and a membership pricing to anyone that subscribes to their newsletter. Before the official launch of the product.
This strategy will inevitably draw traffic to their product as a way of announcing the launch of their product to a larger audience.
You can read more on how to leverage on pre-launch discounts to successfully launch your Woocommerce store.
- Social sharing discounts
Today social media has become part and parcel of the marketing strategy that can be used to increase the visibility of a brand or product. Therefore if you are in the quest of increasing your social media credibility or making your products more visible without spending a lot of money, you should go for a woocommerce social share discount.
Example: A t-shirt online store offers a free gift to every person that likes and shares theirs products to their social media circle. The woocommerce social discount is what they need to monitor and apply discounts to those who went by the rules. The more their products are shared, the more visibility they get.
Read more on how to use social media to make your woocommerce store go viral.
- First time shoppers offers
A first time visitor will only come back to your store if he is satisfied by your services. Giving him an incentive is an intelligent way of converting him into a regular customer.
This discount can be the last booster your client needs to buy a product on your online shop. It could be the unique difference between you and your competitors. After a successful conversion, your client will continue buying from you, if he doesn’t see the need to create a new account on another online shop.
Example: A mobile phone online store gives a 10% discount plus free shipping to every first time shopper.
Learn how to create this type of discount with Conditional Discounts for WooCommerce.
- Newsletter or email discounts
One of the good things about woocommerce dynamic pricing is that it is limitless. You can tailor a discount to any particular target group of your choice to meet your needs. Having a strong mailing list is essential to your shop, because it is the backbone of your shop.
They are the first people you can reach directly when you want to market your services in the future.
Therefore they are not to be neglected. If you still have a small mailing database and want to grow it, this discount can help you achieve it. Providing an offer in exchange of your visitors email address is the trick!
Example: An online furniture seller decides to offer 20% off every purchase for signing to their newsletter.
Bonus tip: to encourage this kind of conversion, you can use popup email sign-in options on your woocommerce shop like:
-SumoMe is a fantastic free popup plugin for WordPress users.
-Looking for something a little bit different, consider checking out the new, all-in-one Icegram plugin
-WordPress PopUp is one of the most popular free popup plugins on the market, with more than a quarter of a million downloads to date.
There is a myriad of opt in options both premium and free. Yours is to search and find the one that suits you.
- Abandoned cart offers
According to readycloud.com some of the reasons e-commerce shopping carts are abandoned are as follows:
-55% due to high shipping prices.
-35% of stores do not feature a security badge.
-24% of the time no delivery information is offered.
In summary there various reasons why a visitor does not complete a purchase on your shop. Would you risk losing 61% of your potential customers? I don’t think so! Woocommerce dynamic pricing can help in bringing back those people.
Example: An e-commerce fashion shop sends a bi-weekly email to abandoned cart customers with a 24hours flash upto 50% discount as a reminder for them to come back and complete their purchase.
- Affiliate / referrals offer
This tactic is a marketing strategy that works like a link. One person refers your product to a friend or family and so on and so forth. In other words you can apply deals to customers who land on your Woocommerce shop, following an affiliation link. Then you can apply a woocommerce dynamic pricing to the referrer or the referred or to both of them.
Example: an online electronic shop gives out a 10% reduction on total cart items to the referrer and the referred in a promotional period of one week .
A successful referral campaign can yield a lot of results. This is a list of renowned businesses like Google, Dropbox and Uber that used referrals programs and increased their sales and audience.
This can help you source out through testing the strategy that works best for you.
Bonus tip: AffiliateWP is an easy-to-use woocommerce wordpress plugin that gives you affiliate marketing tools to help you grow your business.
- Minimum purchase discount/ Cart total deals
This deal type is a pusher, it has the tendency to make the customer buy more than planned for, with the knowledge that he is spending less and buying more. Discount based on the total value of a shopping cart is very effective when you target the right products in your shop.
Example: An online food retailer shop gives one extra box of cornflakes, when the customer purchases two boxes of cornflakes.
- Customer loyalty offer
This deal has a specific target. Loyal customers! It helps in strengthening the relationship between you and your customer, and doing away with ideas of trying your competitors products. Doing this is an easy way of creating mouth-to-mouth free advert for your brand.
Two effective ways of going about this is either to implement a customer loyalty program, this program lists all the benefits a customer has when he purchases your services a certain number of time. Or you can send a direct personal email or group email to customers when they purchase from you a specific number of time, offering them a gift for their loyalty.
This technique always adds value and makes a happy customers, they feel cared for and will definitely stick with you.
Example: As a online beauty product seller, i can decide to
a) free shipping twice = if you’ve purchased 3x
b) gift vouchers = if you’ve purchased 4x
c) 3 sessions of beauty makeover = if you’ve purchased more than 5
- Influencer deals
Influencers such as bloggers, celebrities, persons of resource etc have the capacity of draining an audience to your online shop. You can use offers to turn their fans into your customers. Campaigns, videos, testimonials that showcases that influential person using your product, can be used to measure the amount of people you touched in their network.
Example: If you sell body lotions and you want more visibility for your product, you can partner with a blogger. He can write an article on your product on his website and add a promo code to it. As many as click through the article and get to your online shop through the promo code and purchase get the discount, in return the influencer gets exclusive services from you for the work achieved.
- Exit intent offer
This is the last attempt in retaining a visitor on your online shop. Whatever be the reason a visitor leaves your shop without purchasing, an offer can certainly make them think twice before exit. This is where you come up with a deal.
A percentage off a product, a free gift etc…could do the magic!
Dynamic pricing should be used strategically if you want to gain from it. It doesn’t always work at the first shot, you have to test all the different methods to see which one works for your online business.