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Offering Incentives to Perk Up Profits

Attract more business without sacrificing your bottom line.

There was a time when the prospect of shopping from the comfort of home, work or wherever, was enough motivation to get shoppers to make a purchase. These days, however, buyers have come to expect more before they’ll commit to buy.

When you’re selling online, you’re competing with a veritable world of other sellers, each eager to make a sale. You’re challenged to differentiate yourself from your competitors, sometimes by variety of goods or quality of service, but typically in regards to the sorts of incentives you’ll offer to convert that sale.

Here’s a look at the sorts of incentives you can offer to attract more business without sacrificing your profits.

Use the free shipping offer to draw shoppers in but also offer an option for faster shipping service—at the actual cost

The best incentive solves customers’ problems

Before you determine to publicize a buyer incentive, be it seasonal or yearlong, decide which problem your customers want most to have resolved. Surely, today’s savvy online shoppers are seeking best prices on items—that’s why they’re researching their potential purchases online as opposed to driving around town like in days long ago. Offering a sale price or other such price discount might not be the best approach to take, in and of itself, since you’re likely competing with other sellers’ best prices (and many offer price matching, taking the wind out of your sale sails).

But lowest item prices might actually be a secondary goal of online shoppers these days. Matters of item availability, delivery date and shipping costs also weigh heavily on today’s shoppers. Consider the following buyer incentives and determine the best approach to serve your shoppers’ needs.

Lowest prices

This becomes a difficult proposition these days, especially with online retailers perpetually watching what others are doing. With the exception of true “loss leader” pricing approaches (where the retailer will actually take a loss on an item to sell it and, hopefully, additional items), most retailers will be selling at a consistent price around the ‘Net. Price your items competitively but don’t expect to have price alone become the draw to your online store.

Free shipping is a top draw

This is the most obvious incentive these days, especially with the way today’s ever-increasing shipping costs being able to quickly erase a low-price deal. If you deal in volume such that you can absorb standard shipping costs, then proudly trumpet “free shipping” in your offerings.

A best bet is to offer a low-cost standard delivery option to your customers, which is often suitable to customers who aren’t in a hurry to receive an item (which is frequently a problem that shoppers want solved). Use the free shipping offer to draw shoppers in but also offer an option for faster shipping service—at the actual cost. This way your free shipping offer captures shoppers’ attention but doesn’t drain your profits if they elect to pay for an expedited delivery service. And consider setting an order value that, once reached, will result in free shipping for your customer. In this way, you can encourage the shopper to purchase more items to get the free shipping offer.

Purchase online, pick up in store

This approach works when you have a brick-and-mortar store, and works on the premise of confidence and convenience. Many shoppers today shop online to be confident they’ve secured an item that might otherwise sell out. With the purchase secured, they can elect to pick up the item at your store when it’s convenient for them. This is a real win for both the buyer and seller; the buyer secures an item and avoids paying shipping costs, while the seller avoids the logistics of packing and shipping—plus, the customer will need to visit the store, and might possibly make additional purchases.

Rotate your incentives throughout the year to add variety to your customers’ shopping experience

Little gifts go a long way

Buyers love when they find a little something extra included with their purchases. From playful promotional knickknacks, pens and pads of paper, or even inexpensive penny candies, little bonuses help your customers remember you. Whenever possible, include your business name, logo and contact information to make it easy for customers to visit again for a repeat purchase. Of course, one of the easiest gifts to give is printed coupons your customers can use the next time they shop at your store.

Seasonal specials, weekly offers and daily deals

Sales, of course, are great incentives to attract shoppers, but you can have sale prices all the time, right? Actually, you can if you’ll rotate the savings, that is, feature different items at different times of the year. This is a perfect method to teach your customers to return to your store on a regular basis so they won’t ever miss a sale. Offer an item at a discounted price while presenting complementary goods at regular prices. The key is to establish the value proposition that “something’s always on sale” to keep your customers coming back on a regular basis.

Deferred payment processing incentives

If you have a sophisticated accounts payable process, you can consider offering payment incentives, sometimes as simple as deferring invoicing for a month or two. Of course, you’ll want to be sure your business can sustain the deferred collection on purchases. If you can manage this, it becomes a compelling draw for seasonal shoppers, who might be juggling more purchases than usual. Some sellers are successful with this sort of promotion during the annual income tax season, offering a bit of “tax relief” for shoppers.

Try one, try all

No one incentive will serve your customers’ every need, nor will it serve yours. Rotate your incentives throughout the year to add variety to your customers’ shopping experience. Use different incentives to serve your needs, such as gaining early seasonal sales, or to disposition languishing merchandise.

The good news is that there are many incentives to utilize in a variety of ways to help you increase customer traffic and boost your business’ bottom line.

About the author

Dennis L. Prince
Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay...and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues. Opinions expressed here may not be shared by The Online Seller and/or its principals.



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