12 Discount Strategies for WooCommerce Shops That Actually Work

Dean Iwaoka
January 31, 2024

Table of Contents

Key Takeaways

Everyone loves a discount or a coupon. Retailers have known this forever and unfortunately for many businesses, shoppers also know this and many have found ways to exploit discounts. I’ve compiled a list of the top 12 discount strategies for WooCommerce sellers that actually work. The key is knowing who your customers are and how to maximize revenue per customer without devaluing your product and brand. 

In the competitive landscape of retail and e-commerce, discount strategies are essential tools for attracting customers and boosting sales. Direct Price Reductions are among the most straightforward and effective tactics to entice shoppers. This category includes Percentage Discounts and Dollar Amount Discounts, both of which offer immediate value to the consumer. Percentage Discounts are versatile and can be applied across a range of products, making them ideal for retailers with diverse inventories. They are particularly effective for encouraging larger purchases, as the savings grow with the spending. On the other hand, Dollar Amount Discounts provide a clear and tangible benefit, often appealing to those making smaller purchases. These strategies are best suited for businesses looking to simplify their promotions and provide clear, direct savings to their customers. Whether aiming to clear stock, attract new buyers, or incentivize larger orders, Direct Price Reductions can be a powerful component of a retailer's promotional arsenal.

I’ve tried to outline the pros and cons of each strategy and give guidance on which strategies are best for which types of ecommerce businesses. Keep in mind that many of these strategies can be combined and tailored to your specific business. 

To understand which discounting strategies are most effective for your business, I recommend that you have a firm understanding of your target customers. There are lots of analyses you can do to really hone in on your customers’ needs, attitudes and behaviors. For more on analytics check out 29 Essential eCommerce Analytics Strategies for Growth and Success - The Ultimate Guide.

‍If you're looking for a fast & powerful way to get better insights into your data, try Athenic’s free 30-day trial. Athenic works alongside your WooCommerce store to enhance your reporting capabilities and deliver instant insights around discounting strategies for your business.

Direct Price Reductions

This group includes discount strategies that involve a straightforward reduction in the price of products or services. It encompasses Percentage Discounts and Dollar Amount Discounts. Popularized by many brands of yesteryear (RIP: Bed Bath and Beyond), these strategies can be effective but need clear caveats to prevent devaluing of the brand or products.

1. Percentage Discounts: 

Offering a specific percentage off on products can be very appealing to customers. It's straightforward and customers can easily understand how much they're saving.

  • Pros: Easy for customers to understand, flexible in application (can be store-wide or product-specific), and can drive significant sales volume.
  • Cons: Can devalue products if used too frequently and may reduce perceived value of the brand over time.
  • Best for: Retailers with a broad range of products and prices, allowing customers to save more as they spend more. Ideal for store-wide sales or promotions on specific categories.

2. Dollar Amount Discounts:

Similar to percentage discounts, but instead offering a specific dollar amount off. This can sometimes be more enticing if the dollar amount appears to be a significant saving.

  • Pros: Can be perceived as more tangible savings by customers, especially for lower-priced items, and is easy to communicate.
  • Cons: May not be as enticing for higher-priced items where a percentage discount could offer more savings.
  • Best for: Retailers with generally lower-priced items where the dollar savings can be quickly grasped by the customer. Also useful for incentivizing a minimum spend.

Quantity-Based Incentives

These strategies encourage customers to purchase more items or spend more to receive a benefit. This group includes Buy One, Get One (BOGO) and Volume Discounts. I love these types of discounts with a tiered approach as it can really increase the AOV but similar to the first category, these run the risk of devaluing the brand if not done properly.

3. Buy One, Get One (BOGO):

This can be in the form of buy one, get one free, or buy one, get one at a reduced price. It encourages customers to purchase more than they initially intended.

  • Pros: Encourages customers to buy more, can help move excess inventory, and is perceived as a high-value deal by customers.
  • Cons: Can be costly if not planned properly and may not be suitable for all product types, especially high-cost items.
  • Best for: Retailers with perishable goods or excess stock they need to move quickly. Also effective for brands looking to increase the number of items sold per transaction.

4. Volume Discounts:

Encouraging customers to buy in bulk by offering a discount on larger quantities can increase the average order size and move more inventory.

  • Pros: Increases average order value and can help reduce inventory levels, appealing to both bargain hunters and bulk buyers.
  • Cons: May lead to over-purchasing by customers and subsequent returns, and can reduce profits if not carefully calculated.
  • Best for: B2B sellers or retailers of consumable goods where bulk purchases are common. It's also beneficial for businesses looking to reduce inventory levels.

Shipping and Handling Offers

This category focuses on reducing the additional costs associated with purchasing online, such as Free Shipping. FS is a staple in the eCommerce industry but it is not for every brand. I highly recommend incorporating as part of a loyalty program so you can mitigate the margin hit with hopefully a higher LTV from your customers.

5. Free Shipping:

Offering free shipping is a powerful incentive, especially if there's a minimum spend threshold. It can increase the average order value and is often a deciding factor for customers making a purchase.

  • Pros: Increases conversion rates, reduces cart abandonment, and is a strong competitive advantage.
  • Cons: Can cut into profit margins if not carefully managed, and may require a minimum purchase amount to remain cost-effective.
  • Best for: E-commerce businesses looking to compete with larger online retailers. It's particularly effective for increasing the average order value and reducing cart abandonment.

Time-Sensitive Promotions

These discounts create a sense of urgency to encourage quick purchases. Flash Sales and Seasonal and Holiday Discounts fall into this category. From late night “As seen on TV” ads to modern Facebook ads, there is a reason this promotion type remains popular: for the right brands and customers, it really works.

6. Flash Sales:

Time-limited sales create a sense of urgency and can drive a quick increase in sales. They can be especially effective when marketed well through email and social media.

  • Pros: Creates urgency, can quickly clear out inventory, and can attract a surge of traffic to the website.
  • Cons: May attract bargain hunters who are not long-term customers, and frequent flash sales can train customers to wait for discounts.
  • Best for: Retailers with a strong online presence and the ability to create buzz through social media and email marketing. Ideal for clearing out seasonal or overstocked items.

7. Seasonal and Holiday Discounts:

Aligning sales with holidays or seasons can capitalize on times when customers are already in the mindset to make purchases.

  • Pros: Capitalizes on times when customers are ready to spend and can be tied to new or seasonal inventory.
  • Cons: Highly competitive periods may require deeper discounts to stand out, and sales may cannibalize non-discounted periods.
  • Best for: All retailers, as these discounts tap into the natural consumer spending cycles associated with holidays and seasons.

Loyalty and Retention Strategies

Discounts in this group are designed to reward repeat customers or to encourage first-time buyers to return. This includes First-Time Buyer Discounts, Exclusive Discounts for Members or Subscribers, and Referral Discounts. You’re not supposed to have a favorite child but these strategies are my favorite discounts for sure. Acquiring customers is not just about the single transaction, it is about building a relationship with consumers for the long haul. Using discounts to make loyalty more rewarding is a win-win for both parties.

8. First-Time Buyer Discounts: 

Offering a discount for a customer's first purchase can be a great way to attract new customers and encourage them to complete their first transaction with you.

  • Pros: Attracts new customers and encourages them to make their first purchase, potentially leading to customer loyalty.
  • Cons: Can attract one-time buyers who are only interested in the discount, not in repeat purchases.
  • Best for: New businesses or those looking to grow their customer base. It's also effective for higher-end brands looking to lower the barrier to entry for new customers.

9. Exclusive Discounts for Members or Subscribers:

Providing special discounts to members of your loyalty program or email subscribers can increase customer retention and loyalty.

  • Pros: Enhances loyalty program value and can improve customer retention, while also collecting valuable customer data.
  • Cons: Excludes non-members which could limit potential sales, and may require additional costs to manage the loyalty program.
  • Best for: Businesses with established loyalty programs or those looking to build a database of engaged customers.

10. Referral Discounts:

Offering a discount to customers who refer friends can help you acquire new customers while rewarding existing ones.

  • Pros: Encourages word-of-mouth marketing, acquires new customers at a lower cost, and rewards existing customers.
  • Cons: Can be abused if not monitored (e.g., customers referring themselves), and the incentive may need to be significant to motivate referrals.
  • Best for: Companies looking to leverage their existing customer base to acquire new customers through word-of-mouth.

Cart Abandonment and Exit Strategies

These discounts aim to recover sales that are at risk of being lost. They include Abandoned Cart Discounts and Exit-Intent Discounts. I would argue that retargeting ads for abandoned carts powered the initial success of the AdTech industry. That said, in today’s highly commoditized world, these can be effective but it comes back to knowing your customers.

11. Abandoned Cart Discounts:

Sending a discount offer to customers who have left items in their cart can be an effective way to recover potentially lost sales.

  • Pros: Can recover lost sales by incentivizing customers to complete their purchase and can provide insights into why carts are abandoned.
  • Cons: May train customers to abandon carts intentionally to receive discounts, potentially reducing overall profit margins.
  • Best for: E-commerce businesses with high cart abandonment rates. It's a strategy to recapture customers who have shown a high intent to purchase.

12. Exit-Intent Discounts:

When a user is detected as trying to leave the site, an exit-intent pop-up offering a discount can convert customers who were on the fence.

  • Pros: Can capture additional sales that might otherwise be lost and can be a final incentive for hesitant shoppers.
  • Cons: May not always convert as it targets customers who have already decided to leave, and could potentially decrease the value of full-priced sales if overused.
  • Best for: Online retailers looking to capture sales from customers who are still hesitant or comparing prices. It can be a last-ditch effort to convert a sale.

In summary, for each of these strategies knowing your customers is paramount to developing a sustainable ongoing promotion strategy. I cannot recommend leveraging the power of AI enough to help you analyze and understand which types of discounts make the most sense for your business. 

‍If you're looking for a fast & powerful way to get better insights into your data, try Athenic’s free 14-day trial. Athenic works alongside your WooCommerce store to enhance your reporting capabilities and deliver instant insights around discounting strategies for your business.

Discounting Infographic

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