Promotions help bring in more sales. The challenge, though, is creating a promotion that doesn’t give too much away while still offering a good enough deal that customers are willing to go out of their way for it.

So what’s the secret to creating an irresistible deal that won’t bust your bottom line?

A study conducted by Fivestars reveals 3 key findings on the types of rewards that resonate with customers…and those that don’t.

1) Promotions based on percentage are more appealing to customers

  • Sales deals based on percentage are more attractive to customers than dollar based deals. When customers evaluate dollar-based deals, they automatically figure rough idea of the percentage discounts of these deals. But if the percentage is tough to calculate ($5 off $35+ purchase), a deal could appear less attractive.
  • For a percentage based deal to stand out to customers, the minimum value must be 20%. Over 85% of customers said that promotions with discounts above 20% are more attractive.
  • To make the perfect deal that really resonates with customers, percentage based promotions should allow customers to use the discount over a wide range of items (30% off any regular priced item) rather than a predetermined item (20% off olive oil).

2) Requiring a minimum purchase makes deals less attractive

  • Customers often predict their total purchase value to be less than the minimum requirements ($25 off $150 purchase), so when retailers make purchase minimums mandatory, it can create hurdles and affect what consumers are willing to spend.

3)  Promotions that align with personal preferences perform better

“The strongest predictor for whether customers will go out of their way to use a promotion is how well the promotion aligns with their personal preferences,” says Fivestars.

  • A deal for 25% off any drink, for example, was viewed as more attractive by 93% of customers because this deal gave them the flexibility to select the discounted item. Providing customers with more flexible options increases the odds that your deal will align with their preferences.

The Takeaway

The next time you plan a sales promotion for your store, Fivestars suggests removing minimum purchase requirements and offering clear percentage discounts that can be applied to a wide range of items.

You don’t have to give away a lot to make your promotion attractive. Focus, instead, on offering flexibility by allowing customers to choose their favorite items—a rule that becomes especially important when using promotions to attract new customers.

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About Author

Sherene Funk

Sherene Funk is the author of the contemporary romance Autumn in Your Arms and the eBook The Small retailer's Ultimate Guide to Increasing In-Store Sales. She is a voracious reader who owns more books than she can ever read in this lifetime (but that doesn't stop her from collecting more). A graduate of Brigham Young University, she has published several humorous non-fiction articles and worked in advertising for many years before moving to her current position as a writer on modern retailing at Rain Retail Software. She researches non-stop to see what successful retailers do and loves to share what she learns with other small business owners through informative articles that address their unique needs.


Also published on Medium.

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