Why Your Ecommerce Promotions Fail

March 31, 2016 Emma Greenman

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When planning giveaways, discounts, coupons, promotional events, and any other special pricing for your ecommerce company, you’re probably already counting your profits in your head. Then, you run across a blog like this one that says ecommerce promotions just don’t work. What are you supposed to believe?

Well, let’s first consider what you want to get out of your latest promotion. If you’re just looking for a high number of sales conversions, then you’re set. If you’re looking for loyal customers who will come back time and again, then you’re setting yourself up to fail. Why? Let’s consider a few facts.

Lowering the Perceived Value

When you can lower the price of a product just to get it out the door, your customers start to wonder just how valuable that item is. For instance, if you can slash your prices to 50% on a particular handbag design, only to jack the prices back up two days later, anyone who encountered the lower price will forever more believe that’s what your product is worth. 

If you can’t show that your products are worth the price tag, then you haven’t done your job. Discounting just to get those items out the door will only confirm to consumers that your products were never as valuable as you said they were.

Bad First Impression

Once you’ve tanked your own prices, there’s no going back. You may not lose all those customers who made a purchase at the lower price, but they won’t buy again until you have another sale. Anyone who wasn’t swayed by your lower prices the first time may keep an eye out for special deals, but they certainly won’t be fool enough to pay full price once the specials are over.

If no one’s buying until you lower your prices, then you might as well set the prices lower to begin with. But if you start with lower prices, what will you do when it’s time to run promotional deals?

Poor Substitute for Service

If you’re counting on lower prices or discounts on future purchases to keep your customers happy, then you’re missing a big piece of the ecommerce puzzle. Service after the sale is what makes a buyer loyal to your brand. The problem with running promotions all the time is that you’re too busy counting conversions to worry about who needs your help.

Instead of constantly slashing your prices, spend some time with your buyers. Provide the information they need to make their choices, and guide them toward smart purchasing decisions. They’ll return next time, full price in hand, and ready to make their next purchase. 

Breeding Mistrust

So, yeah, you’ve gotten quite a few new customers through the door with your big price cut. Those buyers may hang around for the next time you lower your prices, so you’re cool there. Maybe you’ll catch a few more people after you raise the prices again—you know, the ones who didn’t know you offered a discount yesterday. Everything sounds great, right? 

Well, what about those customers who bought your product at full price just before you bottomed the price out? Are you willing to go back to everyone who bought at full price and offer them a refund on the difference? If you’re not, then you’re going to have some pretty angry people on your hands. No one wants to feel like a fool after buying into your full-price items, only to discover later that you don’t really think they’re worth that much after all. And that’s what you tell them when you slash your prices.

No Place for Sales and Discounting in Your Marketing?

No. But you should think wisely about how you're using these types of promotions. If you're only trying to get the conversion, you should be hesitant. You'll be undercutting yourself and risk running to the bottom on discounting if you aren't careful. If you’re hoping to build lasting relationships with your buyers, to build a brand that invokes trust and fuzzy feelings, then be careful with those promotions. There's are smarter ways to build loyalty

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