Ambitious and growth-minded eCommerce business leaders are at a critical point in time where they need to revisit the effectiveness of their promotional strategies. While the height of the COVID-19 pandemic saw an eCommerce customer acquisition and profit boost within eCommerce stores, they’re now unlikely to be able to reach those peaks again. This is due to factors like economic turbulence discouraging people from buying at all — let alone online — as well as there being more eCommerce businesses to compete with than ever.
But the growth potential of promotions are clearly validated across the spectrum of eCommerce businesses. They maximise metrics across the board; including increased profits. However, to see healthier profit margins, businesses need to maintain full control of how their promotions are developed, who receives them, and how they can generate greater growth.
In this blog post, we explore why control over your promotions is key to protecting and growing your business. With the right levels of sophistication in place, you can prevent offering unsustainable price offers, inadequate targeting, and misuse of codes.
Businesses can stand to lose a great deal of money if they’re unable to regain control over how their promotions are carried out. But that’s not to say any deterrence can safeguard businesses from losses altogether. Particularly for online stores.
It’s clear the potential gains behind a truly great and effective promotional campaign far outweigh any potential losses, but these gains can only be unlocked when your promotions are secure.
So, it begs the question; how can eCommerce businesses offer promotions and fully control them?
Promotions should be offered from systems designed to maintain rather than “achieve” control from the offset. One way to do this is to ensure promotions are offered to the right people. Namely, a closed user group within your customer base. People that you want to make feel extra special by rewarding them for their repeat custom or having met some other criteria.
Some good examples include:
Key workers: Offering valuable promotions to customers who helped us get through tough times makes them feel truly appreciated.
Employee benefits: Partnering up with businesses to build a reward system increases brand awareness and reinforces positive associations with your product or service. In effect, adding to your customer base and gross margin.
Students: These customers are highly receptive to promotions, with 83% of students surveyed claiming that they are more likely to shop at a retailer if they offered a student discount.¹
The actual incentives behind promotions should stand out from the crowd. For example, offers of 20% discounts instead of the usual 5 or 10%. Of course, this is risky, given the considerably higher percentage.
That’s why the user group examples above are ideal candidates for maximising control. Each of them possess a method of validation. Key workers use platforms like Blue Light Card or NHS discount cards… Employees are registered to their place of work. Students prove their tenures via Student Beans or using services like Go Certify. Establishing parameters like these along with other strategies ensures eCommerce businesses the best ROI on their promotions.
Challenge: EE wanted to offer its student customers a discount on Samsung products in order to effectively target the market, while ensuring that these exclusive promotions would remain protected. They approached Uniqodo for a solution to build a promotion engine that ensured only students received the offer.
Solution: Uniqodo provided unique, single-use codes to prevent coupon stacking. Seamless distribution of codes through API integration enhanced promotion experience. Auto-filled codes in checkout also streamlined the sales process to prevent cart abandonment and increase retention.
Result: These sophisticated approaches helped EE see an uplift in conversion and engagement rates, all while maintaining a steady rate of security for EE’s promotions. The enhancement that these promotions brought to the customer journey also further justified the ROI of using Uniqodo.
We’ve already touched on the idea of sophisticated criteria and what that means for promotions. In our explanation we showed you how certain demographics in your customer base are ideal candidates to incentivise with marketing promotions. This is very much an outward perspective strategy. Which is okay. But store owners should also adopt an inward perspective in order to improve their eCommerce profit margins.
Identifying growth opportunities, fresh insights that the competition has failed to see, is a tried and tested formula of growth. But in the end, many businesses fall foul of not identifying internal challenges. As a matter of fact, they can cause problems for themselves, more so than their competitors.
Sure, it’s prudent to consider what the competition offers in their promotions. Their incentives can inform our own e.g. free shipping. But to identify your own shortcomings? That’s a recipe of success for your eCommerce store. To increase profits, you need to:
1) Locate the areas of your business that need growth
2) Generate promotions tailored around gaps in profits
3) Integrate sophisticated criteria to ensure high margin results
Here are some examples of sophisticated criterias that you could implement in your promotions:
Tiered and scaling conditions mitigate the risk of high discounts. For example, offering customers 25% off if they buy X amount of Y. You can always implement a stop on the promotion once a certain threshold has been met.
Using live data to inform these promotions also has huge potential for boosting your ROI. For example, a promotion for hotel rooms can be set up to only appear on days when there’s plenty of capacity. This will make each redemption more valuable to the hotel as opposed to losing profits from having empty rooms.
Seasonal promotions: There are plenty of holidays and events throughout the year that are prime opportunities for promotions. The two main advantages of season-scheduled promotions are that they put you in contact with the right audience and offer time limits on promotions.
The best way to speak to your customer base. Find something which all of the demographics within your customer base have in common.
For example, everyone has a birthday — so why not offer them a one-time special promotion? It can only be redeemed once a year, is highly personalised to the customer, improves your brand image, and almost guarantees increased eCommerce profit margins.
Analytics should be observed alongside sophisticated criterias. Data-driven targeting is an excellent way to see which of your customers are receiving certain promotions. This allows you to steer promotions to customers who will actually deem them more valuable.
Challenge: TUI wanted a method to enhance basic promotional capabilities. To amplify conversion rates on offering holiday packages, destinations and specific dates.
Solution: Uniqodo created sophisticated validation criteria that allowed TUI to enhance promotion targeting. Our targeting, based datalayer variables, meant we could integrate more granular promotional capabilities for TUI. It also enhanced control over the promotion, right up to the checkout page, as codes could only be redeemed on specified units.
Result: Uniqodo’s solutions improved acquisition for underperforming holiday packages as evidenced in the uplift of engagement rates and a ROI of 10,282%. TUI have since adopted this system as a Business as Usual (BAU) strategy for all holiday types.
Affiliate marketing channels can seem risky to pursue. A great deal of trust in their integrity and expertise is required. But then on the other hand, affiliate marketing helps enable greater outreach for eCommerce stores, particularly in global markets.
With huge affiliates, there comes a higher risk of misused promotions. Often this results in significant losses, further limiting gross margins as opposed to making them higher. It comes as no surprise then, to increase eCommerce profit margins, whilst selling products on wide-reaching affiliate platforms, promotions need further scrutiny.
This is achieved using increased systems of control. All in all, it comes down to the use of unique, single-use codes. Ones that can only be used once per customer. How is this achieved?
Well, there are manual methods of applying codes. Although manual processes are prone to higher operating costs. It just so happens that there are automated solutions that streamline production of unique, single-use codes.
Challenge: Moonpig wanted to drive their engagement with and access to younger customer markets, particularly with students. However, they were concerned about the risks of codes leaking and potentially leading to losses for their business.
Solution: Uniqodo maximised control, enhanced the promotion experience, and mitigated cart abandonment with augmented solutions. These included single-use codes, API integration with Student Beans, and auto-filled codes in checkout fields.
Result: These solutions not only helped Moonpig drive their engagement and conversation rates within the student demographic, but also facilitated a secure, profitable strategy to utilising affiliate markets.
Automated processes save you time and increase cash flow in the process. The reason for this? Well, they remove all of the bits and pieces that come with manual processes. Freeing you up to evaluate crucial metrics to your business. How else can you review the costs of goods sold? Or maintain stellar customer servicing without missing a beat?
Whilst you labour over a profit margin calculator, you want an automated process ticking away in the background. Take Uniqodo, for example. It’s often the go-to choice for eCommerce businesses. Our partners understand there are ways to optimise their promotions and make them realise their true potential. The problem is that the solutions they develop in-house don't come close to the quality and volume of what an outsourced partner like Uniqodo can provide. And that’s why they come to us.
Uniqodo’s technology provides automated solutions that are also flexible. Meaning they are primed to streamline workflows and operate alongside existing promotional tools.
Challenge: Happy Beds were keen to offer key workers an exclusive offer, but had to ensure that their promotions were truly exclusive and weren’t at risk of being leaked.
Solution: Uniqodo integrated an automated solution that oversaw the prevention of code leakage, and enabled a seamless, even distribution of codes to validated customers. This was done through restricting codes to Blue Light Card holders and introducing auto-fill capabilities for codes at checkout.
Result: Uniqodo recognised that while exclusive codes are the first step to keeping promotions secure and controlled, that alone would not be enough to prevent code leakage to affiliate sites. So having these codes be single-use and saved for purely validated customers was the advanced strategy that Happy Beds needed. The company profited from an uplift in conversation and engagement rates, setting the foundations for increased Customer Lifetime Value (CLTV.)
Greater eCommerce profit margins are within reach when you protect your promotions from code misuse, over-discounting, and irrelevant targeting. It’s important to maintain rather than achieve control. This ensures you’ve set systems in place that protect your profit margins from the get-go.
What’s more, tying powerful marketing incentives (e.g. personalised promotions) with sophisticated criteria, enhances promotion targeting, tracking and redemption rates – all while reducing code misuse.
With an automated platform like Uniqodo, the automated processes enable you to implement secure promotions and generate growth. Regardless of whether your eCommerce business operates through affiliate channels.
Ready to unlock the full potential of your promotions? Give us a call today.
¹New research: student discounts and the opportunity for retailers | The Beans Group