Discount Proneness is what happens when you “teach” customers to expect discounts. Over time, they won’t buy unless you send them a discount. They wait for it, expect it. Unraveling this behavior is a very painful process you do not want to experience.
The latest shiny object where Coupon Proneness comes into play is the “shopping cart recapture” program. Mark my words, if it is not happening already, these programs are teaching customers to “Add to Cart” and then abandon it, waiting for an e-mail with a discount to “recapture” this sale – a sale that for many receiving the e-mail, would have taken place anyway.
The best way to measure this effect is to use a Control Group.
When I hear people talking about programs like this (for example, in the Yahoo analytics group) what I hear is “the faster you send the e-mail, the higher the response rate you get”.
That, my friends, is pretty much a guarantee that a majority of the people receiving that e-mail would have bought anyway. Hold out a random sample of the population and prove it to yourself. There is a best, most profitable time to send such an e-mail, and that time will be revealed to you using a controlled test. The correct timing is almost certainly not within 24 or even 48 hours.
That is, if you care about Profits over Sales, and trust me, somebody at your company does. They just have not told you yet!
When you give away margin you do not have to give away on a sale, that is a cost. Unless you are including that cost in your campaign analysis, you are not reflecting the true financial nature of the campaigns you are doing. If you are an analyst, that’s a problem.
If you are using cart recapture campaigns, please do a controlled test sooner rather than later. Because once your customers have Discount Proneness, it will be very painful to fix.
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