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Customer Retention. Automated

Offers, Promotions & Discounts That Work -- and Ones That Don't

Posted by Mallorie Moore on Jan 13, 2015 2:26:00 PM

First, it's important to determine what you are trying to accomplish. Are you trying to incentivize latent customers? Or are you rewarding your best customers? Are you participating in an event-based promotion? Or are you surprising your customers with a special offer?

By segmenting customer lists prior to sending offers, promotions, and discounts, retailers can categorize customers and relevantly and effectively reach their customers, driving engagement.

How should retailers segment their customer list?

By categorizing customers into the following three segments, retailers can send appropriate messaging and corresponding offers, promotions, and discounts. 

  1. Best Customers: Reward your best customers; they deserve it!
  2. One & Two Time Buyers: Entice one and two time buyers to become repeat purchasers, so that they become retained customers (3+ purchasers)
  3. Latent Customers: Incentivize latent customers who are at-risk of churning. Bring them back to the store, give them a reason to get excite, and watch the dollars roll in.

Language That Entices, and Language That Does Not

salesSubject lines are the first point of contact for your customers to receive an offer, promotion, or discount. You must be aware that you are battling your competitors for opens, especially during holiday-based promotions. Therefore, you must design subject lines, which are personalized and succinct - quickly informing the reader why you have emailed them. 

Utilize some of the following language in your subject lines for increased open results: 

  • First Name: Include first name to grab the reader's attention. For example, "Sarah, Open your $20 Best Customer Reward Now"
  • Related Purchase: Use last purchase data to drive the next purchase. For example, "Greg, Do You Need Filters for your New Coffee Pot? Click for 20% Off"
  • Urgency: Create a sense of urgency, so your customer doesn't wait around for a better offer from your competitor. For example, "Your Special July 4th Coupon is Here Early - Extra 15% Off Today Only"
  • We miss you: Use "we miss you" language to entice latent customers, and start rebuilding the relationship. For example, "Alex, We Miss You - Here's a $15 Off Coupon Today Only"
  • Gaming: Integrate a reward structure into your email marketing, and engage with customers through a gaming structure (i.e. silver, gold, platinum levels). For example, "Mary, You've Reached Level Gold - Here's Your Reward"

Carr these tips for personalization into your email content, so that customers will open your emails. Your messaging is only as strong as your open and click rates, so if you aren't seeing desirable engagement rates, it's time to revamp your email marketing structure. 

discounts-process-s100x101Not seeing desirable engagement rates? Try segmenting your customer lists based on customer, purchase, and product data. What you don't want to do is blast emails without segmenting your customers and using historical data. 

Some of the following email subject lines are sure to plummet your campaign's engagement: 

  • "Shop the Holiday Sale - 20% Off!"
  • "NEW ARRIVALS! Shop 15% Off"
  • "Happy 4th! your $20 Off Coupon Awaits!"

Although these subject lines very clearly state the offer and are welcoming, they are not personalized, do not relate to previous purchases, do not stress urgency, and evoke little emotion. Additionally, try to stay away from exclamation points and all caps; these can contribute to your emails ending up in spam folders. 

Low-Margin vs. High-Margin Businesses

How do you create an enticing offer while still maintaining your margins? 

Low-margin businesses tend to offer dollar-off discounts in which they can set a minimum spend per order to qualify for a coupon. Doing so allows the business to dictate what the Average Order Value (AOV) is going to be, thus controlling costs and guaranteeing receipt totals. This model helps protect margins from fluctuating. 


If Suzie's Sweets offers $20 off $100 and $45 off $200, as opposed to 20% off total order with no minimum spend, they can ensure that, at the very least, $100 orders will generate from customers who are looking to score a deal. To additionally incentivize customers, Suzie's Sweets can offer free shipping on orders over $150, which is very attractive to customers who have already committed to spending $100 (for the $20 off coupon). Suzie's Sweets then increases the likelihood that AOV's will exceed $100 and see $150 receipts, at only the cost of offering free shipping.


High-Margin businesses are less concerned with generating AOV minimums and more interested in delivering a memorable customer experience, because every product purchase already ensures a significant spend. Therefore, these businesses have more versatility in delivering unique offers, promotions, and discounts. Percent-offs, which are just one way of discounting goods, are less detrimental to margins and more enticing to customers in this business structure. 


If Helen's Handbags offers 20% off anyone item, customers are less likely to look to the larger ticketed items, because 20% off a $400 handbag is a much more attractive savings than 20% off a $100 wallet. The exclusivity of the one-time offer on one item ensures that the coupon code can only be used once, so the customer looks to see how they can get the best deal. 


Big ticket items often require buyers to think long and hard before they spend, so tiered incentives are very effective in this business model. A commonly used tiered model is as follows: 10% off $100, 15% off $150, 20% off $200. Another popular tiered model is the gift with purchase (GWP) model. 


When a customer spends $150 at Helen's Handbags, they are rewarded with a free compact mirror case. When a customer spends $300, they receive the compact mirror case plus a limited edition coin purse. When a customer spends $600, they receive the compact mirror, limited edition coin purse, and a limited edition wallet. As the spend increases, so does the value of the gifts offered. 


9 Pillars of Retention Automation

Offers, promotions, and discounts are meant to drive sales, not diminish them. Augment your promotion strategy with customer, product, and purchase data to send even more relevant emails and truly target the right customers, at the right time, with the right message. Learn more about using Windsor Circle's 9 Pillars of Retention Automation Framework to develop your data-driven email marketing campaign today!


Topics: Best Practices

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