Discounting 101 is a series on all-things discounting strategy, based on the ebook, “The Ultimate Guide to Discounts”available for download now. Check out Part 1, Part 2, Part 3, and Part 4 of the series for more insights!

Converting casual browsers into bona fide customers is a tricky game. On one hand: You want to convert as many as possible by any means necessary. On the other: You don’t want to destroy their willingness to purchase at full price down the road or impact customer retention.

Personalizing your discounting strategies is key to ensuring you’re deploying the right discounts to the right customers, at the right time. Of course, there will be times where mass discounts are deployed (i.e. holidays, special yearly events), but the right steps must be taken so you don’t become addicted to discounts.

Ideally, marketers will want to be able to predict in advance which users are more likely to convert from casual browser to bona fide customer and serve discounts based on that intelligence. But regardless of your predictive tech setup, there are still ways for brands to personalize and optimize discounting strategies according to three key variables: sourcing, that is, how customers find your brand; geographic location, where your customers are located; daypart, the time of day when customers are most likely to engage with your brand.


The path your customers follow to reach your ecommerce site can significantly affect their behavior. Those who search for keywords, or better yet, search for your brand by name, are already brand-aware before they get to you. You can test the net impact of your discounting strategy by measuring the difference in customer lifetime value between those who do a specific keyword search, such as “bracelets,” and those who employ specific branded keywords, such as “Alex and Ani bracelets.” 

For example, one of our clients already knows that customers who arrive after doing a branded keyword search have a greater customer lifetime value than those who have clicked through on social media. To arrive at a discount strategy, the brand did some short-term and long-term testing of their customers’ purchasing behavior, based on what path those customers took to the brand’s ecommerce site. The results? Search-based users, who by nature are already more brand-aware than others, responded well to free shipping or a discount with a floor. Data analysis also showed that those who came from social media tended to purchase just once, or not at all. The client has learned they can get a better response from that cohort by using an immediate percentage-off discount to grab as many new customers as possible.


Geography matters more than you might think. Consider deploying a discount to encourage consumers in regions where your brand doesn’t do as well, or to increase your market share where you’re already doing well. Depending on your product, seasonal discounts may also need to be timed according to customer location, with some customers in, say, sunny California, with mild temperatures most of the year, and some in the Northeast, where winter lingers well into April.

While we’re on the subject of geography, consider that consumers who live near a brick-and-mortar store might have a different impression of your brand, as compared with someone who has only interacted with it virtually. The former will probably expect consistency in pricing and discounts across all channels.


 Some folks are just not morning people, and others hit the sack by 9 p.m. Some like to shop at lunchtime, and others wait until after dinner. So you’ve got to test to discover and deploy a personal send time, so that each consumer gets an email and/or mobile notification at the time of day when he or she is most likely to convert. 

Take our client BustedTees, one of the world’s biggest ecommerce T-shirt companies – and a frequent discounter. The global e-tailer used to send out emails to their full list at a single time of day, regardless of whether the customer was in Miami or Mumbai (which is nine-and-a-half hours ahead of EST). These days, BustedTees aligns their send times with each user’s peak time of engagement. The result: Email revenue has increased as much as 34 percent.

By tailoring your discount approach to each unique customer, with consistency across all channels, you’ll see consumer trust blossom. Before long, customers will be pressing that Buy Now button.

Next, we’ll talk about how to design a discount strategy that protects your brand.

Steve Wood, Optimization Analyst at Sailthru