In the holiday season, most retailers offer huge digital marketing discounts and free shipping. While this means a high top-line, it also means extremely thin profit margins. Such continuous reward schedules may attract customers during the last quarter of the year, but usually result in severe decay rates. When the digital marketing promotional period finishes in the New Year, retailers generally lose a lot of customers.
Are marketers doomed when they stop offering promotions? Can online retailers survive the last quarter of the year, without offering digital marketing discounts or free shipping, when their competitors are strongly competing for business? Certainly not!
Below are some digital marketing tips to help retailers get good profits in Q4, without having massive decay rates in Q1:
• Personalise your digital marketing promotions, to show customers that you know them well. Instead of sending a simple discount coupon, send them an email listing some products they may be interested in, depending on their previous purchases. While such a digital marketing email offers coupons, it also emphasises that you want to continue having a relationship with the customer.
• After the initial promotional period is over, wean customers off the promotion slowly, rather than stopping the digital marketing offer abruptly. For example, modify a ‘free shipping’ offer to something that can be availed only on purchases of above £100, rather than on every single purchase.
• Apply a reward schedule that is not continuous, such as a ratio-based reward system. This means offering customers a discount only if they make a certain number of purchases. This will not only make sure that people continue to buy your products in Q1, but will also attract customer-interest all through the year.
• Use the high traffic in Q4, to offer a reward structure that will make the behaviour of customers more profitable. For example, if you notice that some customers are only shopping from a single category, offer them a discount to encourage them to purchase from a category they have previously not brought from.
If you plan your promotional offers carefully, with the aim of gaining long-term customer loyalty, you will not only have a profitable holiday season, but a profitable year. Avoid training people to buy only when a discount is offered. Instead, combine competitiveness with personalisation and good service, to get customers to make digital marketing purchases all through the year.
Qudos Digital is a leading digital marketing consultancy, and can be contacted on 0845 388 5583 or firstname.lastname@example.org.