Discounting Vs Incentive Programs on Your Retail Website

One of the major dilemmas that online retailers face is to find ways for strengthening their customer relationships. With so many e-commerce solutions occupying the digital space, there is a need of techniques and strategies through which customers can be retained for a longer period of time. As a result, many customers engage in discounting and incentivizing programs. So, what are discounting and incentivizing programs and how can they help your business?

Discounting Programs

Do you sell your products at fixed prices?

Customers do not like businesses that are not lenient in their pricy strategies. So, businesses have addressed their concerns through discounting. Discounting refers to the price decrease in the product’s prices.

Category of Discount

First of all, you have to decide how you are going to apply discounting for your products. For instance, suppose you have an online business. If you are offering a $5 dollar discount on headphones, then it is called a cash-based discount. Similarly, if you assign a 10% discount on your headphones, then it is known as a percentage-based discount. Likewise, there is also the traditional strategy of reducing a product’s price to a fixed price.

Condition Set on Purchase

Sometimes discount programs work by offering customers a discount on bulk buying. For example, you can sell your office supplies by offering a $100 discount if the customer order contains the quantity of 10 or more office chairs.

Free Delivery

Suppose your customer is interested in the purchase of 3D glasses for $100. However, when they initiate the order, they are shown a delivery fees of $60. Now, the customer will cancel the order and go to a local store for their purchase because they want to save on shipping costs.

Because normal retail stores do not charge shipping costs, some consumers are uncomfortable in paying the shipping charges. Cash-based or percentage-based discount do not thrill them much as they see the delivery charges as an unnecessary burden, especially for those that live in a far-away country where the shipping charges can be actually close to the product price itself.

In such scenarios, the discount can be applied in the form a free delivery. However, before implementing a free delivery-discounting program, it is necessary to ascertain which parts of your clientele can a get the most out of the free delivery program.


Customers often complain that they did not get a discount that they were expecting and the company had misrepresented the pertaining information. The more you are transparent with your discount terms, the better it is for your business.

Sometimes, businesses are unable to list down their discounts with clear details. Often, the website’s servers are also showing varied discounts for the same product. In such instances, a customer can lose trust and doubt the business credibility. As a result, not only does the business lose a potential customer, but their reputation is also harmed because of the negative reviews by the customers.

Incentivize Programs

Why should your most loyal customer receive the same treatment as others?

When a customer engages in several business transactions with your business, then you should reserve special offers and services for them.

Incentive programs motivate customers by the provision of rewards for their actions. Incentive programs are used to create customer loyalty programs where the regular ones are granted rewards through different strategies.

Offers and Packages

Loyal customers can be attracted through discount codes and vouchers, which can be sent through emails and text messages. In such cases, predictive marketing is necessary so a customer can receive the incentives for their most common purchases. For instance, if a customer has been purchasing gaming headsets from your website continuously, then they can offer incentives through “buy one get one” offer for a gaming headset of their preference.


Another common strategy is to partner with other businesses. For example, a customer that pays through the card of a specific bank can receive better discounts. Similarly, customers who buy from you frequently can be given discount on services of allied businesses. For instance, suppose you are selling gym equipment. Now, you can offer free joining charges on your partner gym. As a result, everyone wins including the customer, your business, and the gym.

Social Media

This is the age of social media. If a brand’s image is positive on social media platforms, then it can experience a considerable rise of new orders. Thus, some companies have set rewards for their social media customers. This means that a customer can comment and spread the business’ positive image and gain discounts in return.

For example, consider there is an Instagram user that has a following of 100,000 users. Now, if the users engages in the promotion of the company’s product like make up accessories, then the company may offer the product free of cost in return of all the converted customers that contacted the company due to the post.

Flash Sales

Another good strategy for the sale of products can be providing incentives in the form of flash sales .i.e. decreasing a product’s price for only a limited period of time. In such cases, the incentive is given in the form of time. However, in such incentive programs, it is necessary to look into the time zones of the customer. For example, a customer living in Ireland can be given a discount of 70% on a product for 6 hours. However, if the period falls in the sleeping hours of the local populace, then the brand’s incentive solution can fail.

Final Thoughts – Discounting Vs Incentivizing

Now comes the million dollar question, should you use discounting or incentivizing? Well, both comes with their pros and cons. Hence, we recommend you to get the best of both worlds. With discounting, you can channel the impulse buying of customers as that can improve your sales to an extent.

Through the help of an incentivizing program, you can ensure that your loyal clientele remains satisfied with your services. As a result, your customer lifetime value can be increased significantly and your customer retention figures may experience a notable rise.

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