The term “sticker shock” puts fear in the hearts of all ecommerce store owners.
Sticker shock typically is used to describe when customers see the price of an item they are interested in buying and are so “shocked” by it that they decide not to make the purchase altogether. Understandably, this is a situation ecommerce merchants want to avoid at all costs.
But what if that same feeling of sticker shock that repulses shoppers when prices are high, could get people to convert at a higher rate when you promote your deals the right way? What if you could "shock" your customers with how great your deals are and get them to make purchases faster.
Recent studies of consumer buying habits have shown that there are in fact ways to positively shock and wow your customers. Most tendencies have stayed relatively stagnant as generations have gone by, but two of the most well documented trends are that today’s consumers are far more educated, and that they make decisions in shorter time frames.
What does that mean for a stores trying to increase their conversions? It means that stores have a harder time impressing consumers with their prices, and they have less time to make their impressions last.
A positive sticker shock is your ticket into the modern customer’s heart. In this post we’ll cover 2 major strategies to pleasantly “shock” your customers and make your promotions more effective.
Optimize the Visibility of your Promotions
The idea of visibility is one we often discuss when it comes to rewards program promotions. You will not be able to achieve the “positive sticker shock” phenomenon without customers seeing your promotions in the right light.
One of the most common promotional issues that brands run into is that their customers simply don’t know that they have earned points or discounts.
This is especially common in rewards programs confined to popups. The majority of customers visit ecommerce stores looking for something specific. That might be new shoes, face cream, or a new hat. You don’t want your promotions to interrupt their shopping, but rather to provide them with that additional incentive to decide that they want to purchase from your store. Here are a couple tips to make sure your promotions are reaching your customers without obstructing their experience.
Strategy 1: Display your discounts frequently
If you are using just a tab for your rewards program, you likely won’t be able to realize its full benefits. A customer clicking your tab likely has to have made the decision that something else on your website (the tab) is more interesting than your products (the reason they came in the first place). Unfortunately, when a customer’s interest in your products wavers, they are far more likely to click off your page than they are to browse it further for your rewards tab.
Instead, preemptively educate your customers! The goal is to get your customers excited before they even start to browse through your products. This makes your promotions an added incentive to make a purchase rather than a distraction from your products.
Include an image on your home page telling them about how they can earn free shipping when they spend at least $50, or include the amount of points a customer can earn on your product pages. There are plenty of options and the more you put your discounts in front of your customers, the more likely they are to buy into them.
Don’t be afraid to take advantage of popups as well. Using a software like Swell with exit intent detection can show promotions to customers who are on the verge of leaving your sight for one last chance at getting them excited about your offers.
Strategy 2: Use Clear Messaging
In the digital age customers make judgements more quickly than ever so make sure you present your deals clearly and concisely. If the value of your promotions isn’t immediately obvious to your customers you may be losing your chance to “wow” them.
To avoid this problem, don’t make your customers make calculations.
If you’re offering points in exchange for a purchase, clearly articulate what those points mean for your customers. A flashy promotion that reads “Earn 500 points when you spend $50!” will certainly grab a casual browsers attention, but 500 points means nothing to the uneducated customer. Any customer who is new to your website or not well versed with your rewards program will not be able to derive a value from 500 points without taking the time to do separate research on what 500 points equals.
Eliminate that extra step by outlining the value for your points on the same page where you list your promotions, or by linking to an explainer page so that customers can quickly educate themselves. This will help inform your customers and improve the reception of your promotions.
Strategy 3: Implement Coupon Redemption at the Checkout Page
Offering discounts at checkout is a powerful strategy as well and goes a long way to improving your customer’s overall experience with your store.
Allowing customers to redeem points at checkout helps to make sure that every customer who makes a purchase is well aware of your rewards. If you have a points program implemented, many of your customers will earn points but will be completely unaware that they have earned them.
Having unexpected cash ready for them at checkout will leave your customers even more satisfied with their decision to buy from you and satisfied customers are your most valuable customers.
Offer Discounts Intelligently
We’re not here to suggest that you should be throwing around discounts to all of your customers. Universal discounts are likely not the answer, but you can still use eye-catching discounts your promotions by offering them as incentives.
One of the biggest reasons shoppers don’t engage with promotions, or stop their involvement with a particular rewards program is that the discounts simply aren’t appealing enough. You can offer as many discounts to your customers as you’d like, but if the customer isn’t motivated to earn that discount you won’t see them coming back to engage and make repeat purchases.
So how do you make sure your discounts don’t overburden your store while also inspiring your customers to perform well?
The appeal of your discount boils down to their value and attainability.
Strategy 4: Optimize Discount Value
The most enticing promotion is always the promotion that offers the most value to the customer. Whether that’s 10% off or a free t-shirt, when shoppers see promotions they immediately begin calculating how much it’s worth to them.
We typically recommend that stores offer 5-10% of their customers’ total expenses back to them in rewards. Anything below this threshold may run the risk of prematurely turning away customers. While the exact amount you choose to reward will depend on your store’s margins, our recommended 5-10% in rewards is enough to incentivize the majority of your customers to get involved with your promotions.
Workplace supply giant Office Depot offers back 10% in rewards for purchases on select items. They offer this high value to compensate for the fact that there are hundreds of competitors for the products they’ve included in their rewards program (paper, printer ink, copies, etc). In this case, the value they offer must be great enough to entice a customer to only shop at Office Max each time they purchase any of these items.
A customer knows that consistently they will save 10% on paper and other supplies when they shop at Office Max which incentivizes an initial purchase while laying the foundation for many future purchases as well.
Strategy 5: Maximize Attainability
When a customer sees one of your discounts, naturally their first question is “how do I earn it?”.
They’re immediately going to perform a cost-benefit analysis to decide whether or not to invest their time and money into earning this discount. A store running a points program needs to be sure that their discounts aren’t so costly that customers give up before they even begin to get involved with the program.
Health and wellness brand GNC offers $5 back to customers for every $150 they spend at their store. This is slightly below our recommended 5% minimum (3.33%) but GNC still sees high engagement in their rewards program. GNC makes up for the low value they offer in their rewards program with a high attainability.
Because their average cart size skews higher, their customers quickly spend enough to earn discounts at the store. While 3.33% in rewards is a small amount to be earning back, customers are still engaged because they know they’ll start earning rewards after their first or second purchase at the store.
At the end of the day, the primary consideration for your store should be the affordability of your discounts for you. For a lot of stores, it can be enticing to offer huge discounts to your customers to achieve this “positive sticker shock” and get them to stay longer, but the discounts need to be sustainable.
Offering big discounts one week only to eliminate your promotions altogether the next week is a recipe for inconsistency, and inconsistency can be one of the biggest impediments to customer loyalty. Customers need to know what they can expect from your brand. Flash sales are great but if they don’t appear with any kind of consistency, customers won’t return to your store often enough to know about them.
Doing your research and making sure you know exactly what types of discounts make sense for your store will go a long way to helping you build loyalty. Once you’ve completed this research, you’ll be able to more effectively market your promotions to your customers and as you’ve learned, offering the right discounts the right way can be an immensely powerful motivator for your customers. You’ll boost conversions by transforming window shoppers and serial browsers into loyal repeat customers.