Did you know that most buyers are more likely to purchase if they receive a percentage-based discount? CapitalOneShopping Research states that a 50% discount makes consumers 99% more likely to buy a product. Now, that is what you call a powerful sales driver and profit maximizer. Let us find out how percentage discounts can do the same for you.
Percentage-based discounts are known to improve sales and customer engagement. Today, we will explore the ins and outs of percentage deals. Learn to set them up in Shopify and discover how third-party apps help create better offers. Discover how to grow your online store with these winning strategies.
Ready to dive in? Let us get started, then.
In a percentage-based discount, a specific percentage is subtracted from the original price of a product. For example, a product costs $100 with a 20% discount. Hence, the new price:
Percentage Discount Calculator = $100 – (20% of $100) = $100 – $20 = $80.
You can offer these discounts on individual items, specific product categories, or entire orders. It is a genius marketing strategy that rarely fails. Customers find “getting a percentage off” easy to understand and appealing. This is why this strategy works and helps you drive more sales.
Percentage-based discounts drive immediate attention and motivate purchasing decisions. Shopify stores benefit from these discounts where competition is high. You need to convince your customers that they are getting a good deal. Clear percentages like “10% off” or “50% off” can boost your store’s traffic, increase conversions, and build customer loyalty.
Standard discounts are usually set as a fixed amount. For example, a $10 off a $50 product equals a $40 price. On the other hand, percentage discounts adjust according to the original price. For instance, a 20% off a $50 product equals a $40 price.
A percentage discount scales with higher-priced items. For example, if a product costs $50 and has a 20% discount, the discount amount is:
20% of $50 = (20 ÷ 100) × 50 = $10.
So, the final price is: $50 – $10 = $40.
Now, if the product costs $200 and has the same 20% discount, the discount amount is:
20% of $200 = (20 ÷ 100) × 200 = $40.
So, the final price is: $200 – $40 = $160.
Hence, the higher the original price, the larger the discount amount. This makes percentage discounts appealing for small and expensive products, as they adjust proportionally to the price. This flexibility allows you to maintain margin control while offering enticing deals to your customers.
There are many benefits to using this discount type that make it an ideal marketing tool. Let us find out how percentage offers can benefit your business.
Strengthen customer retention through loyalty programs by offering percentage discounts on future purchases. For example, offer them 10% off their next order after a customer buys from your store. This motivates repeat purchases and builds long-term loyalty. When combined with personalized offers, your customers become extra happy and loyal.
Percentage-based discounts are good at creating urgency. Customers are more likely to take immediate action when you announce limited-time offers with a percentage offer. Offering “10% off this week only” or “20% off your first order” creates a sense of urgency that pushes customers to act quickly.
Percentage discounts can attract attention from buyers. Customers are drawn to the idea of savings. Whether 20% off or 50% off, all kinds of percentage-based deals can catch the eye of consumers. Most online shoppers say that they actively search for deals and discounts when shopping. So, you need to be active when offering discounts as well.
Encourage customers to engage more with your store by creating discounts with specific percentages. For instance, discounts on high-traffic shopping like Black Friday can boost sales. This is why it is important to know the discount type to offer and to whom. Our next section is all about that.
It is one type that utilizes percentage discounts to the fullest. Create a more personalized shopping experience by offering discounts to returning customers. You can also create special offers for those who sign up for your loyalty program. Customers appreciate rewards, and this type of discount can help retain them.
Cart value-based discounts are applied when a customer spends a specific amount. For example, “Get 20% off orders over $100.” This encourages customers to add more items to their cart to unlock the discount. Thus, your average order value increases, and the chances of cart abandonment decrease.
Tiered discounts allow you to offer increasing percentages depending on the order total. For example:
This type of discount incentivizes customers to spend more to unlock greater savings.
Volume-based discounts offer savings based on the quantity of items bought. For instance, “Buy 2, get 10% off” or “Buy 3, get 20% off.” This type of discount encourages customers to buy more, increasing your average order value.
Creating percentage discounts in Shopify is straightforward:
1. Go to your Shopify admin page and select “Discounts.”
Percentage Discounts – Shopify Discounts
2. Click “Create Discount” and select “Amount off Products” as the discount type.
Percentage Discounts – Shopify Discounts Amount Off Products
3. Set the discount percentage (e.g., 20%).
Percentage Discounts – Shopify 20% Discount
4. Choose whether the discount applies to all or specific customers.
Percentage Discounts – Shopify Customer Segmentation
5. Save the discount and watch your sales increase.
Shopify offers both discount codes and automatic discounts:
Percentage Discounts – Shopify Discount Code Vs Automatic Discount
Which one should you use? If you want customers to engage with your discount, use codes. Use automatic discounts if you want a seamless experience with no extra steps.
When setting up percentage-based discounts, it is necessary to check if the threshold is appropriate for your business. Offering discounts too frequently can hurt your margins, while offering discounts too rarely may not attract enough customers. Find a balance based on your store’s goals and customer behavior.
Using third-party discount apps to automate your discount strategy can save time. It also ensures that customers always receive the best deals. Discount apps can schedule discounts, apply them automatically, and customize the offers based on customer behavior.
When choosing a third-party discount app, look for features like:
Not all customers are the same. Use percentage-based discounts to target specific groups. For example, you could offer a higher percentage discount to repeat customers, first-time buyers, or
email subscribers.
Combine your percentage discounts with other promotions, such as free shipping or buy-one-get-one offers. This can create even more value for your customers, making them more likely to convert.
Time-sensitive discounts create urgency. For example, offering percentage discounts during special sales events like Black Friday or Cyber Monday can drive more traffic and increase conversions.
One common mistake is overusing percentage discounts, which can severely affect profit margins. While discounts drive sales, they can also reduce your earnings. Always ensure that your discount strategy aligns with your profitability goals. Maintain a healthy balance to ensure success in the long run.
It is essential to set clear conditions for your percentage-based discounts. Without clear terms, customers may get frustrated and abandon their carts. Your goal should always be not to frustrate your buyers with complicated information. Be very clear and straightforward on your discount displays.
Remember that a discount should enhance the customer experience, not hinder it. Ensure your discounts are easy to use, well-communicated, and add value. If you ever get feedback from them, do not ignore them. Work on your flaws and get better with discounting. Your target should always be to make your customers happy.
So, now that you understand the true power of percentage discounts, how will you implement them in your Shopify store? Whether you are looking to boost sales, clear out inventory, or reward loyal customers, percentage-based discounts are a flexible and effective tool that can deliver results.
It is all about striking the right balance between offering compelling discounts and maintaining healthy profit margins. Do you want to go big with a 50 percent discount, or are smaller, more strategic discounts better for your brand? This guide helped you clarify how to begin with percentage-based discounts. Good luck!
Percentage-based discounts work by reducing the price of an item by a specific percentage. Shopify allows you to create these discounts easily through the admin panel.
The best percentage discount depends on your store’s goals. A 10-20% discount can drive sales without compromising margins. For more extensive promotions, consider up to 50% off.
To calculate a percentage discount, multiply the original price by the discount percentage and subtract the result from the original price.
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