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Master the Art of Discount Marketing: Boosting Sales with Smart Strategies

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Master the Art of Discount Marketing: Boosting Sales with Smart Strategies

Blog / Master the Art of Discount Marketing: Boosting Sales with Smart Strategies

Master the Art of Discount Marketing: Boosting Sales with Smart Strategies

Discover the potential of discount marketing beyond consumer savings. Did you know that businesses can leverage discounts to drive revenue, boost conversions and increase email newsletter sign-ups?

In this blog post, we delve into the psychology behind discounts, offering valuable insights from our survey results. Explore how you can optimise your discount marketing strategy by aligning with consumer psychology and leveraging these insights.

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If you’re curious about the advantages of discount marketing for your business, this is a must-read.

Decoding the Psychology Behind Discount Offers

It’s no secret that most consumers have a strong inclination towards saving money. However, when it comes to discounts, there are intriguing psychological factors at play that influence consumer behaviour.

Let’s consider the phenomenon of FOMO or Fear of Missing Out.

FOMO refers to the fear of missing out on a great deal and is indeed a significant motivator, there are additional factors that contribute to the allure of discounts.

What Does It Mean?

Interestingly, discounts have the power to enhance consumer happiness, even if only temporarily, leading to immediate purchase decisions.

A fascinating study revealed that a mere $10 voucher offered during online grocery shopping was enough to increase oxytocin levels (known as the “happy hormone”) by 14%! Moreover, participants who received a coupon reported a 49% increase in happiness after the study, compared to the group without a coupon, who reported a 31% increase.

These findings highlight the profound impact that discounts can have on consumer emotions and purchasing behaviour.

What Is Discount Marketing?

Discount marketing is all about offering a sales offer, discount or promotion so that you can gain more customers, increase your sales and get a higher ROI. As a business owner, your primary objective should be to create a perceived value for customers by offering lower prices.

Discount Marketing Examples:

Discount marketing can take various forms, such as:

  • Percentage Discounts (E.G., 20% Off)
  • Dollar Discounts (E.G., $10 Off)
  • Buy-One-Get-One (Bogo) Offers
  • Free Shipping
  • Limited-Time Promotions

The effectiveness of discount marketing relies on understanding customer behaviour, targeting the audience, creating a sense of urgency and aligning the discounts with overall marketing goals.

Discount Pricing Strategy Advantages

Discount marketing plans offer numerous advantages that can greatly benefit businesses. Here are some key advantages to consider:

  • Increased Sales and Revenue: Discounts have the power to attract price-conscious consumers and drive sales. By offering discounts on products or services, businesses can stimulate demand, encourage impulse purchases and generate higher revenue.
  • Customer Acquisition and Retention: Discounts can be an effective discount marketing strategy for acquiring new customers. Offering introductory discounts or special promotions can attract customers who may be hesitant to try a new product or service at its regular price.
  • Clearing Excess Inventory: Discounts are an excellent tool for clearing out excess inventory or seasonal items. By offering discounted prices, businesses can quickly sell off surplus stock, free up storage space and avoid potential losses from outdated products.
  • Competitive Advantage: In a competitive marketplace, discounts can give businesses an edge over their competitors. Strategic pricing and attractive discount offer can capture the attention of consumers and differentiate the business from competitors.
  • Enhanced Brand Awareness: Discount promotions can create buzz and generate positive word-of-mouth marketing. Customers who have had a positive experience with discounted products or services are more likely to share their experience with others. This discount marketing strategy will lead to increased brand visibility and awareness.
  • Customer Insights and Data: Discount campaigns provide an opportunity to gather valuable customer data. By tracking the effectiveness of discount codes, monitoring purchase behaviour and analysing customer feedback, businesses can gain insights into consumer preferences, buying patterns and market trends, which can inform future discount marketing strategies.
  • Stimulating New Markets: Introducing discounts can help businesses penetrate new markets or target specific customer segments. By offering tailored discounts or partnering with relevant organisations or influencers, businesses can attract new audiences and expand their customer base.

It’s important to note that a discount marketing strategy should be implemented strategically and in alignment with overall business goals. Careful consideration of profit margins, target audience preferences, and long-term sustainability is crucial to ensure the advantages of marketing plans are maximised while maintaining a healthy bottom line.

Learn More: The 5 Most Popular Digital Marketing Strategies for 2023

Considering the Drawbacks of Discounts

It’s essential to acknowledge that discounts can have certain drawbacks. Let’s explore them further:

  • For luxury brands or high-end products, offering discounts too soon after their launch can diminish their perceived value. Customers may associate discounts with lower quality or view the product as less exclusive. This can potentially discourage purchases instead of encouraging them.
  • If your customer base highly values the concept of finding a good deal, discounts are unlikely to negatively affect their perception of your brand’s value. However, it’s crucial to consider your target audience and their expectations when incorporating discounts into your discount marketing strategy.
  • Frequency of Discount Offers: While discounts can be effective, using them too frequently can create unintended consequences. Customers may develop an expectation for discounts and become hesitant to make purchases at regular prices.

It’s important to strike a balance and use discounts strategically, taking into account the nature of your products or services, your target audience, and the overall brand image you want to cultivate. By carefully managing the frequency and timing of discounts, you can leverage their benefits while avoiding potential drawbacks.

Discount Types in Marketing

As we discussed earlier, discounts can have a significant impact on consumer behaviour, creating a sense of urgency or triggering a scarcity mindset. The effectiveness of discounts largely depends on the type of discount offered. Here are some common discount types to consider:

  • Buy One, Get One Free: This type of discount appeals to customers by offering an additional item for free when they purchase one at the regular price.
  • Percentage Discount: A percentage discount, such as 20% off, reduces the price of an item by a specific percentage. This type of discount is commonly used and easily understood by customers. It can create a perception of value and motivate purchases, particularly for items priced below $100.
  • Dollar Discount: With a dollar discount, such as $5 off, a specific amount is subtracted from the original price. This type of discount is effective for higher-priced items, as customers can see tangible dollar savings. It can be particularly appealing for products priced above $100.
  • Tiered Discount: A tiered discount offers different savings based on spending thresholds. Discount pricing strategy example: $5 off a purchase of $50, $15 off a purchase of $100, and so on. This type of discount encourages customers to spend more to unlock greater savings and can increase the average order value.
  • Bulk Discount: A bulk discount provides savings when customers purchase multiple quantities of a product. For instance, “Save 10% when you buy 5.” This discount type incentivises customers to buy in larger quantities, benefiting both the customer and the business.
  • Free Shipping: Offering free shipping as a discount can be highly appealing to customers, especially in the e-commerce industry. It reduces the overall cost for customers and can remove a potential barrier to purchase.

Insights from Our Discount Marketing Survey

The connection between psychology and marketing is undeniable, with marketing psychology being a specialised area within the broader field of psychology. Our survey, conducted among 1000 participants in the United States, sheds light on key findings related to discount marketing. Here’s what our data reveals:

  • Influence of Discounts on Non-Purchasers:

    When asked about factors that would change their minds about purchasing their initial site visit, 54.97% of respondents indicated that a discount would compel them to buy.

    Among this group:

    • 61.91% would return to their abandoned cart if offered a discount via email.
    • 82.77% would add extra items to their cart to qualify for free shipping.
    • 91.49% are likely to sign up or provide their email address to receive discounts.
  • Impact of Discounts on Abandoned Carts:

    Regarding abandoned carts, 49.6% of respondents stated that receiving an email with a discount would motivate them to return and complete the purchase. Additionally, 15.5% mentioned that the promise of a free item in the email would incentivise them to convert.

    Other factors influencing abandoned cart recovery include:

    • 16.8% would respond to an email reminding them of the specific items in their cart.
    • 15% found a generic email reminder sufficient.
    • 3.1% had no strong preference and select “other” as their response.

Willingness to Take Additional Steps:

  • Participants were asked about additional actions they would be willing to take to receive a discount. The options provided were adding their email address to a newsletter, adding more items to their cart for free shipping, and leaving a review in exchange for a future discount.

The survey revealed the following willingness levels:

  • 86% of respondents expressed a likelihood to sign up or provide their email addresses to receive discounts.
  • 78.1% indicated a willingness to add extra items to their cart to meet the free shipping threshold.
  • Regarding leaving a review for a promised future discount, only 471 respondents provided feedback. Among them, 45.22% stated they would submit a review in exchange for the anticipated discount.

These survey results emphasise the significant impact of discounts on consumer behaviour, including their ability to convert non-purchasers, recover abandoned carts and drive additional actions from customers. By leveraging these insights, businesses can design effective discount marketing strategies tailored to their target audience.

Learn More: The Dos and Don’ts of Influencer Marketing

Ways To Improve Your Discount Marketing Strategy

  • Utilise Customer Data Analysis: Dive deep into your customer data to gain insights into their preferences, buying patterns and how they respond to different discount offers.

    Discount Marketing Tips:

    Customise your discount marketing strategy to better suit their specific needs and motivations.

  • Implement Audience Segmentation: Divide your customer base into distinct segments based on relevant factors such as demographics, purchase history, or engagement level.

    Discount Marketing Tips:

    Target specific customer groups with tailored discount offers, increasing the likelihood of conversions.

  • Experiment with Various Discount Types: Conduct tests using different discount types, such as percentage discounts, dollar discounts or buy-one-get-one offers, to identify which ones resonate best with your audience.

    Discount Marketing Tips:

    A/B testing can provide valuable data on which discount types yield higher conversion rates and customer satisfaction.

  • Foster a Sense of Urgency: Integrate time-limited or limited-quantity offers into your discount marketing strategy to create a sense of urgency and prompt immediate action.

    Discount Marketing Tips:

    Incorporating elements like countdown timers, flash sales or limited-time promotions can instil a fear of missing out (FoMO) and motivate customers to make a purchase.

  • Personalise Discount Offers: Leverage customer data and segmentation to personalise your discount offers based on individual preferences and behaviours.

    Discount Marketing Tips:

    Tailor offers according to customers’ past purchases or browsing history can significantly enhance the effectiveness of your discount marketing strategy.

Remember, continuous monitoring and analysis of your discount marketing campaigns are vital for refining your approach over time.


What does discount marketing include?

Discount marketing encompasses a variety of strategies and methods designed to promote products or services by offering discounts or special deals. The goal is to create and publicise attractive offers that entice customers, increase sales and foster customer loyalty.

It involves implementing tactics that generate a sense of urgency and prompt immediate action, such as:

  • Limited-Time Promotions
  • Flash Sales
  • Countdown Timers

Discount marketing often leverages consumer psychology to influence purchasing behaviour. It also incorporates personalised offers based on customer segmentation and data analysis. This allows discounts to be tailored to individual customer preferences and behaviours.

How a discount pricing strategy can help your business?

A discount pricing strategy refers to an approach where products or services are offered at lower prices compared to their original or regular prices. This intentional reduction in price aims to attract customers, stimulate sales, and gain a competitive edge in the market.

The primary objective of a discount pricing strategy is to motivate customers to make purchases by creating a perception of value through reduced prices. Businesses utilise this strategy for various purposes, such as:

  • Expanding Market Share
  • Clearing Excess Inventory
  • Promoting New Products
  • Attracting Price-Sensitive Customers

Discount pricing strategies can be implemented in different ways, including:

  • Percentage Discounts: Offering a percentage reduction from the original price, such as “20% off” or “50% off.”
  • Dollar Discounts: Providing a specific monetary amount off the original price, like “$10 off” or “$50 off.”
  • Volume Discounts: Grant discounts based on the quantity purchased, encouraging customers to buy larger quantities for a lower price per unit.
  • Seasonal or Promotional Discounts: Temporarily reducing prices during specific seasons, holidays, or promotional events to create a sense of urgency and drive sales within those periods.
  • Bundle or Package Discounts: Offering discounted prices when customers purchase a bundle or package of related products or services together.
  • Loyalty Discounts: Providing discounts as a reward for loyal customers who repeatedly engage with the business or as part of a loyalty program.

It is crucial for businesses to carefully assess the impact of discount pricing strategies on their profitability, brand perception and long-term customer relationships.


In conclusion, effective discount marketing requires a deep understanding of your customer base and a willingness to try new approaches. It involves careful consideration of various factors, including:

  • Specific items to discount
  • The extent of the discount
  • Duration of the promotion
  • Frequency of offering discounts

The positive aspect is that when implemented thoughtfully, discount marketing can have significant benefits for your business. It can lead to increased revenue, higher average order value (AOV) and improved conversion rates, giving your business a valuable boost.

What To Do?

  • Begin by conducting small-scale tests and experimenting with different types of discounts over a few months
  • Identify which discount strategies resonate most positively with your customers
  • Gain insights and refine your approach
  • Strategically incorporate discount marketing into your overall marketing toolkit

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