Hi there! 👋

You’re losing money, and it’s not on your financial statements.

This hidden cost is your subsidy cost—the margin you give away with discounts or promotions to entice customers who would have bought anyway.

Think about those entry popups offering insane discounts on initial purchases. Many customers come to your site ready to buy, credit card out. They see the discount and happily take it, even though they didn’t need it to make the purchase.

To see an immediate boost to your bottom line, reduce this cost. Implement timed or exit popups instead. These appear after giving customers time to buy at full margin, capturing those ready to purchase without discounts.

Try shifting from a blanket 20% off discount to an “enter to win a monthly giveaway” promotion.

The result?

I’ll bet you a massive decrease in discounting with no negative impact on email signups.

Here's a step-by-step guide to reducing your subsidy cost:

1. Identify the discount triggers:

   • Review when and why discounts are offered.

   • Assess if they are truly necessary for conversions.

2. Implement timed popups:

   • Allow customers time to browse and decide.

   • Display the offer after a set time.

3. Switch to exit popups:

   • Offer discounts when customers show signs of leaving.

   • Capture those hesitant to buy without affecting ready-to-buy customers.

4. Offer alternative incentives:

   • Use giveaways or contests instead of flat discounts.

   • Maintain engagement without cutting into your margin.

5. Monitor and analyze:

   • Track the impact on email signups and conversion rates.

   • Adjust your strategy based on performance data.

By making these adjustments, you can significantly reduce unnecessary discounts and improve your profitability.

Here’s the benefit in a nutshell:

• Increase full-margin sales.

• Reduce unnecessary discounting.

• Maintain customer engagement and email signups.

Take an hour to implement these changes.

Watch your profitability soar.

Stay tuned, have a great Sunday!

Erik

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

1. 1:1 Advisory for E-Com Managers: I help you 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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