Promotions allow businesses to offer incentives to customers buying certain products or services. They can come in a multitude of different forms. Depending on a merchant, these may be simple or extremely complex. Similar to prices, promotions configured by a product or a category of products and may vary by channel, region, store, and validity period.
There are many different types of promotion techniques used in Digital Commerce. We will explore here cart level promotions, coupons, loyalty, and referral programs.
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Cart-level promotions applied on the cart page based on the cart content and customer.
Here are the common promotion types:
- Multi-buy Promotions: Buy X, Get Y Free, Buy X units of a product from a defined set, get Y free, or get a “partner” product for a fixed price
- Products or categories discounts: This could be something like a dollar off or percent off when buying a certain number of specific products.
- Tiered promotions: when a customer spends $100, the promotion is 10%, but when a customer spends $150, the promotion is 15%.
- Dollar-off or percent off a shopping cart total: different ways to calculate promotions.
- Free shipping: Shipping is free when reaching the order total threshold
A definition of a shopping cart promotion consists of two parts: a set of conditions that evaluate the context of a shopping cart and a discount action applied to the cart when conditions are met.
The following types of conditions commonly used when configuring promotions:
- Cart total threshold
A condition is satisfied when a cart’s total exceeds the specified threshold.
- Presence of specific products in the cart
A condition evaluates if a specified product(s) or products from specified categories are present in the shopping cart.
- Customer Segment(s)
Only customers that belong to a specific customer group are qualified for the promotion.
- Promotion validity period
Promotion is active at the date of the purchase.
- Stores & Channels & Countries
Defines in what stores or countries promotion is active
- Promotions compatibility
When conditions for multiple promotions are fulfilled, the system needs to define which ones to apply and in what order.
To achieve that, promotions can be defined as exclusive (not used together with other promotions) or have priority to stack their execution.
When promotion conditions are satisfied, the promotion actions are applied to a shopping cart.
Typical actions are:
- Discount on cart total
- Discount on a specific product(s)
- Adding a gift
- Free shipping
- Granting a coupon for future orders
There are three different ways of how to calculate a discount:
- Fixed Amount
- Product fixed price
Ecommerce Systems use rule engines to define promotion conditions and actions. They usually provide a business user with a friendly rule builder interface.
There is a lot of similarity between cart level promotions and coupons. The main difference is that a customer needs to add a coupon code to activate a discount on the cart page. Look at a coupon as a trigger or additional condition to activate the promotion.
Other than that, coupon conditions and actions are the same as conditions and actions for promotions. Discounts can be applied to the cart total, specific product, or allow for a gift.
Coupons are special codes that customer needs to enter during checkout to get a discount. Various kinds of coupons differ by their usage conditions.
- Public or personal.
A public coupon has a single code that can be used by any customer, while individual coupons have random, one-off codes that can be used by only one customer.
- Number of Redemptions
number of usages per campaign, per customer, per day, per affiliate partner
It cannot be used with other coupons or promotions
- Budget Limit
The total amount of discount that can be given away to secure your spending up-front
- Stores & Channels & Countries
Defines in what stores or countries a coupon is accepted
- Customer Segment
Only customers that belong to a specific customer group
- Coupon validity time
Time restrictions define when a coupon can be used
Coupon Generation and Distribution
Ecommerce system usually provides a mechanism to generate coupon codes. Here is, for example, the coupon generation interface in Spryker.
Coupons can be distributed in a variety of different ways. Published on a web site, send in an email, or offered to customers after the checkout to be used in future orders.
Sometimes, coupons are used as an incentive for the customer to sign up for a newsletter or create an account. As coupons are usually printed, they must be human-friendly to type. Avoid using 0(zero) and O, or 1 and l to avoid mistyping.
Ecommerce referral program is a system of incentivizing your current customers to refer new people to your business. The referrals come from actual customers and are typically given to people the customer knows and trusts. It is not surprising then that many referral page visitors take action.
Referral programs are used in many different types of digital businesses.
The point of the referral campaign is to provide enough value to both existing and new customers.
The program can offer discounts or actual money, or additional services like extended warranties for your products, free shipping on subsequent orders, or early access to new products.
Several things to keep in mind when implementing a referral program. In addition to a landing page, you will need to build links into various sections of your website:
- A call-to-action button in the header or footer.
- On the product pages
- In the FAQs section
- In pop-up widgets
- In the rotating images section
You will need a mechanism to track referrals by implementing the generation of unique referral codes, automatic reward deliveries, configurable double-sided referral schemes, and rules to check eligibility.
A customer loyalty program or rewards program is a marketing strategy that rewards loyal customers that frequently engage with a brand.
By rewarding recurring engagement, you can increase customer loyalty and ensure continuous growth for your business. The idea behind an effective loyalty program is that the more loyal customers are, the more rewards they’ll get.
Types of rewards
Loyalty programs offer monetary or non-monetary rewards.
Examples of monetary rewards
- x $ for y points
- Coupon for future orders
- Free shipping
- Surprise birthday gift
Examples of non-monetary rewards
- 2x points during your birth month
- Early access to products
- Exclusive events
- Trial-sized products and sets
- Free in-store appointments
Offering tiers in a loyalty program is a great way to engage customers and keep your brand top of mind. Further, tiers play on gamification aspects where members reach higher levels, the more they “play.”
Earning Points and keeping balance
The shop should make it clear how loyalty point is earned and can be used.
Redeeming Points as a Payment Method
Redeeming loyalty points is another payment method that you need to set up in your online shop. It should be possible to combine it with other ways of paying for the order. Usually, the site limits the number of points used on a single purchase.
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