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Hi there! 👋

Brands discount way too much.

And it’s killing profits all day long.

If you’re struggling to increase retention, you’re bound to give away discounts in order to get that second purchase.

Results?

• Less profit

• Lower loyalty (people will only want to buy with discount)

But there is a smarter way to use discounts. It’s called the discount ladder.

In today’s issue, we’re going to talk about how to use the discount ladder as your advantage to get more orders without slashing your profits too much.

Let’s dive in!

Discount smarter and you’ll get more orders without losing too much profit.

There are two ways to fix your broken discount strategy.

1. Only discount at the point of biggest impact. When you really need to nudge customer behavior.

2. Only discount the minimum necessary amount to change behavior.

The combination of these two ways is called the discount ladder

Example: you want a 1x buyer to buy again. 

You first need to figure out what the average time between first and second order is. Let’s say it’s 50 days.

1. Try a 10% off discount 30 days after the first purchase.

2. If the bait hasn’t been taken, trigger a 20% discount another 20 days later.

3. Still hasn’t taken the bait? Try a 30% discount 10 days later.

A simple flow visual flow setup might look like this:

See how I decreased the time delay (from 30 days to 10 days) and increased the offer (from 10% to 30%). You want to create a sense of urgency here and you want to stay top of mind.

Ascension of perceived value is the idea here.

You can use discount ladders anywhere.

• In welcome series

• In retention campaigns

• In win-back-campaigns

• Even in site pop-ups.

Try different ladders: you will eventually figure out the exact minimum amount of margin to give away to nudge people to buy again. 

The remaining margin will go right to your bottom line profits.

That’s it for today. Have a great Sunday.

Erik

Whenever you’re ready, there are three ways I can help you.

1. Interim E-Commerce Management: I run, scale & optimize your e-commerce business.

2. Resource Library. Useful resources for every marketer. Includes an E-Commerce Audit Report, ChatGPT Prompt Guide & Midjourney Masterclass.

3. Book a 1:1 Call. A No Bullshit 20 min Ask Me Anything call. If you’re facing challenges in online business, I’m happy to talk.

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