One of the most common questions that concern young entrepreneurs in our days, which they often direct to their older and more experienced colleagues is: What would you have done differently if you had to start your business all over again?
Surely, there are many answers to that question, but there is one in particular that seems to be a timeless one and keeps coming back.
Never underestimate the importance of freebies and discounts!
Customers of all ages simply love them, and if thought through properly, they don’t necessarily mean that you lose money. In fact, often times, gifts and discounts can actually turn your random site visitors into returning customers that will continue to buy from you for years to come.
Why? Because freebies and discount give people the feeling like they made a good deal, with just that extra value to make the whole purchase worthwhile.
This is, of course, regardless of how much they spent on your store.
When it comes to online stores and web-based enterprises, freebies become even more valuable, especially to first time buyers. For them, that little discount or free gift could make the difference between buying from you or from your competitors, which are only a click away.
And since giving away credit card details online isn’t always an easy decision for customers, they would often rather buy from you again then expose their sensitive information to another retailer.
How do I determine my freebies and discounts?
Generally, if you want to distribute freebies and discounts, you should set very clear rules by which they are applied, and make sure those are still profitable for your business.
For freebies, choose products that aren’t too expensive for you as the retailer, or set a minimum purchase price for which they are given.
As for discounts, recent market researches have shown that customers tend to think of discount below 10% as insignificant, and over 20% as suspicious. Therefore, the optimum discount percentage is somewhere between 12-15%.
Setting up special offers on you online store
There are many tools for creating special price rules on your eCommerce store, that allow you to determine what products will be given for free, and which ones will be sold at a discounted rate.
If your store is built with Magento®, you can use our Free gift and discount extension, but such extensions also exist for many other eCommerce management systems.
Alternatively, you can generate coupon codes and either send them to your newsletter subscribers, or distribute them through social media and other related platforms. However, coupon codes tend to be problematic, as they often expire or get overused, so if you’re distributing coupon codes, we recommend you also use our coupon error messages extension for Magento®.
This will allow you to create custom messages for different scenarios when coupons are invalid.