You think you know what PPT stands for? Think again.
You think you know what PPT stands for? Think again.
You think you know what PPT stands for? Think again.
Jun 12, 2024
Jun 12, 2024
by
by
Andrew Kyprianides
Andrew Kyprianides
You think you know what PPT stands for? Think again.
Discounting is omnipresent. From seasonal sales to Black Friday to outlet deals, consumers have become accustomed to seeing marked-down prices. While discounting has become a crucial tool in a store’s growth and marketing arsenal, the ways in which pricing and discounts impact consumers are often underexplored.
With discounts reaching up to 80% ahead of new season collections dropping, how can brands and retailers ensure that their promotional budgets go further? It’s all about the PPT: Presentation, Personalisation, Timing.
Presentation: The Art and Science of Pricing
Retailers often tell us that choosing the right price is a science—and we agree. However, many overlook the art of presenting that price effectively. This is where the “rule of 100,” a concept popularised by marketing expert Jonah Berger, comes into play: If an item sells for under £100, presenting the discount as a percentage generally leads to better conversion. If the item sells for over £100, conveying the nominal pound value is more effective.
Consider this: a £10 discount might not seem significant to most customers, but 25% off a £40 purchase is likely to catch their attention. On the flip side, a 10% discount on a higher-priced item might have minimal impact—it’s often seen as the standard “Welcome discount” offered to new customers. But imagine a furniture store offering a £100 cash benefit for purchasing a couch. That’s much more compelling.
Personalisation: Tailoring the Experience
We are living in the personalisation era. In a time when platforms like TikTok can identify a user’s full set of interests in less than two hours, it’s surprising to see retailers still sending out blanket discount codes, hoping for conversions. Consumers, much like social media users, expect highly personalised experiences; their access to discounts is no exception.
Lack of personalisation can be detrimental. Picture a customer who consistently buys shirts. They will likely be frustrated if they keep receiving discount codes for trousers. Similarly, a customer who consistently places orders above £300 will likely react negatively to a “£10 off your next purchase” offer, while a different customer whose average order value (AOV) is £50 will likely relish the very same opportunity. Personalisation isn’t just a luxury—it’s a necessity for modern retail.
Timing: The Right Discount at the Right Time
Timing is everything when it comes to discounts. Data doesn’t lie—in fact, it often screams the truth, but the majority of retailers lack the right listening apparatus. Customers tend to shop more at specific times. This is not driven exclusively by seasonality. Factors like payday, credit card payment cycles, holiday plans, and work hours all influence when consumers are most likely to make a purchase.
The average consumer makes the majority of their purchases within a specific 7-day period each month. What does this mean for retailers? If you extend a discount right after a customer has made a purchase, they may feel frustrated, knowing they could have saved money by waiting. Even worse, if discounts are consistently mistimed, customers might start delaying their purchases until a discount code becomes available, costing retailers valuable full-price sales.
On the positive side, the right timing represents a huge opportunity: data-driven retailers who understand these timing patterns can be the first to reach customers when they’re most likely to buy, thus improving conversion rates significantly.
How to Master PPT Strategies: Presentation, Personalisation, Timing
To truly leverage the power of discounts, retailers must master the interplay between presentation, personalisation, and timing. Here’s how:
Be Aware: Recognise that presentation, personalisation, and timing can significantly impact both your top and bottom line. This awareness is the first step in crafting a more effective pricing strategy.
Understand: Dive into your data to identify patterns. What’s your highest revenue day of the month? Are you incentivising the wrong behaviour by discounting too soon after that day? What is each customer’s average basket size? Are you offering them too much or too little? Are your discounts eroding the margins of your top-performing products?
Act: Once you’ve identified patterns, start experimenting. Could you offer 20% off to customers who typically spend less than £30 and a £40 voucher to those who spend more than £400? Tailor your discounts to your customers' behaviours and needs.
Automate: Leverage your data and advancements in AI to create a pricing strategy that works for you consistently. Automate the delivery of the right discount to the right customer at the right time to maximise your conversion rate and ensure your promotional spending is as effective as possible.
Conclusion
In today’s competitive retail landscape, mastering the art and science of discounting is more critical than ever. By focusing on how you present, personalise, and time discounts, you can enhance both customer satisfaction and your bottom line. Start with awareness, deepen your understanding, take targeted actions, and then automate to maintain a consistent edge. This holistic approach to pricing strategy ensures that your hard-earned promo budget goes further, driving growth and loyalty in the process.
You think you know what PPT stands for? Think again.
Discounting is omnipresent. From seasonal sales to Black Friday to outlet deals, consumers have become accustomed to seeing marked-down prices. While discounting has become a crucial tool in a store’s growth and marketing arsenal, the ways in which pricing and discounts impact consumers are often underexplored.
With discounts reaching up to 80% ahead of new season collections dropping, how can brands and retailers ensure that their promotional budgets go further? It’s all about the PPT: Presentation, Personalisation, Timing.
Presentation: The Art and Science of Pricing
Retailers often tell us that choosing the right price is a science—and we agree. However, many overlook the art of presenting that price effectively. This is where the “rule of 100,” a concept popularised by marketing expert Jonah Berger, comes into play: If an item sells for under £100, presenting the discount as a percentage generally leads to better conversion. If the item sells for over £100, conveying the nominal pound value is more effective.
Consider this: a £10 discount might not seem significant to most customers, but 25% off a £40 purchase is likely to catch their attention. On the flip side, a 10% discount on a higher-priced item might have minimal impact—it’s often seen as the standard “Welcome discount” offered to new customers. But imagine a furniture store offering a £100 cash benefit for purchasing a couch. That’s much more compelling.
Personalisation: Tailoring the Experience
We are living in the personalisation era. In a time when platforms like TikTok can identify a user’s full set of interests in less than two hours, it’s surprising to see retailers still sending out blanket discount codes, hoping for conversions. Consumers, much like social media users, expect highly personalised experiences; their access to discounts is no exception.
Lack of personalisation can be detrimental. Picture a customer who consistently buys shirts. They will likely be frustrated if they keep receiving discount codes for trousers. Similarly, a customer who consistently places orders above £300 will likely react negatively to a “£10 off your next purchase” offer, while a different customer whose average order value (AOV) is £50 will likely relish the very same opportunity. Personalisation isn’t just a luxury—it’s a necessity for modern retail.
Timing: The Right Discount at the Right Time
Timing is everything when it comes to discounts. Data doesn’t lie—in fact, it often screams the truth, but the majority of retailers lack the right listening apparatus. Customers tend to shop more at specific times. This is not driven exclusively by seasonality. Factors like payday, credit card payment cycles, holiday plans, and work hours all influence when consumers are most likely to make a purchase.
The average consumer makes the majority of their purchases within a specific 7-day period each month. What does this mean for retailers? If you extend a discount right after a customer has made a purchase, they may feel frustrated, knowing they could have saved money by waiting. Even worse, if discounts are consistently mistimed, customers might start delaying their purchases until a discount code becomes available, costing retailers valuable full-price sales.
On the positive side, the right timing represents a huge opportunity: data-driven retailers who understand these timing patterns can be the first to reach customers when they’re most likely to buy, thus improving conversion rates significantly.
How to Master PPT Strategies: Presentation, Personalisation, Timing
To truly leverage the power of discounts, retailers must master the interplay between presentation, personalisation, and timing. Here’s how:
Be Aware: Recognise that presentation, personalisation, and timing can significantly impact both your top and bottom line. This awareness is the first step in crafting a more effective pricing strategy.
Understand: Dive into your data to identify patterns. What’s your highest revenue day of the month? Are you incentivising the wrong behaviour by discounting too soon after that day? What is each customer’s average basket size? Are you offering them too much or too little? Are your discounts eroding the margins of your top-performing products?
Act: Once you’ve identified patterns, start experimenting. Could you offer 20% off to customers who typically spend less than £30 and a £40 voucher to those who spend more than £400? Tailor your discounts to your customers' behaviours and needs.
Automate: Leverage your data and advancements in AI to create a pricing strategy that works for you consistently. Automate the delivery of the right discount to the right customer at the right time to maximise your conversion rate and ensure your promotional spending is as effective as possible.
Conclusion
In today’s competitive retail landscape, mastering the art and science of discounting is more critical than ever. By focusing on how you present, personalise, and time discounts, you can enhance both customer satisfaction and your bottom line. Start with awareness, deepen your understanding, take targeted actions, and then automate to maintain a consistent edge. This holistic approach to pricing strategy ensures that your hard-earned promo budget goes further, driving growth and loyalty in the process.
Want to know how to adopt this for your store?
Want to know how to adopt this for your store?
© 2024 Charles App Ltd