How to Use Offers, Discounts and Deals to Increase Revenue and Customer Loyalty
OgaAdmin 15 Minute read   |   May 07, 2018

Whether you are just starting out or you’ve been in business for a while, there will come a time in your journey as a merchant where you will be faced with the decision of whether to offer discounts, when to offer discounts and how much the discounts should be worth.

Offering discounts for your business can be a powerful weapon in your conversion arsenal to drive customer loyalty. But, used haphazardly, you can do significant damage to your brand or, worse, become unprofitable.

In a previous post we talked about discount and deals you can offer that won’t compromise your profit. In this post we will dive deeper by reviewing some of the pros and cons of offering deals for your online store, look at some of the most popular ways you can use discounts to drive customer loyalty and conversions and, of course, how to most effectively use them.

What is customer loyalty?

Customer loyalty is when your customers pick you over any other business, based on a previous interaction they’ve had with you. Customers are loyal to businesses because of consistent, positive customer experiences with high-quality customer service and products.

Some businesses also have customer loyalty programs, which incentivize and reward their repeat customers. As a business, it is beneficial to focus on customer loyalty. Though customer loyalty can be measured by looking at metrics like number of purchases, purchase frequency, customer lifetime value, etc., true loyal customers are emotionally attached to your brand in some way.

They become the biggest advocates for your brand, thus driving customer acquisition. One way to drive customer loyalty is through offers, discounts and deals.

The Pros and Cons of Offers, Discounts, and Deals

As with everything in business, there are both pros and cons when it comes to offering deals and discounts. It’s important to weigh up both of these, before you can effectively use offers to increase revenue and customer loyalty.

Let’s first look at some of the pros and cons below:

Pros of Offers, Discounts, and Deals

· Increased customer acquisition.

· Increased number of conversions.

· Increased customer loyalty.

· Great marketing opportunity.

· Quickly move stock.

· Meet sales goals.

Cons of Offers, Discounts, and Deals

· Decreased margins and profitability.

· Potential brand damage if done too often.

· Reduction in conversions outside of sale periods.

· Tendency to reduce average order size.

· Attract customers outside your target market.

· Increased purchases from non-loyal (price driven) shoppers.

Types of Offers, Discounts and Deals

There are several types of offers available, and it can be difficult deciding where to start. Here are some of the most common ones to get you on the right track:

Ø Percentage Based Discount: This is the most popular way to offer discounts. You can either start off small, with 10% or 15% of products, or drive sales of your old stock with discounts of 50% or higher.

Ø Free Delivery: people are prone to buy more when you offer free delivery, making this a potentially profitable deal they can’t resist.

Ø Free Gift: Offering a free gift with a purchase is a good way to add value to the customer especially when the gift is needed with their purchase. It can also be a good way to shift excess products in your inventory that aren’t moving.

How to Use Offers, Discounts and Deals

Just like there are different discounts and deals you could offer, there are also different ways you can use them to increase revenue and drive customer loyalty.

1. Holiday or Seasonal Offers

Whilst Christmas, New Year and Black Friday are the biggest holiday periods for merchants to offer discounts and deals, there are lots of other times of the year you can offer promotions: Easter, school summer holidays — you just need to make sure they are in line with your business.

2. Prelaunch Offers

If you’ve yet to launch your business or new product yet, then offering a pre-launch promotion can help to create intrigue and drive traffic.

3. Customer Loyalty Offers

Help create an even stronger bond with customers by rewarding loyalty with discounts. Make discount codes exclusive to specific groups of customers, to say thank you for purchasing from you.

4. Referral Offers

People are much more likely to buy from you if they’ve been referred by family or friends. Take advantage of this by offering promotions for referrals: you could offer a deal to both the person referring, and the person who has been referred.

5. First Time Shopper Offer

There will be people out there who are considering buying from you, but just need the extra push. Providing a first-time offer could be just the thing to entice them, and who knows, they may become a long-term customer.


Even though offers, discounts and deals aren’t right for every business, understanding your brand strategy can help you explore the offers above and decide if they’re right for your customers.

Promotions are just one potential way to meet your objectives, increase revenue and drive customer loyalty. For more information on optimizing your business, head on over to website.

Tell us in the comments which offers have worked best for your business when it comes to increasing revenue and customer loyalty.