Are you running out of ideas to boost sales? Do you want some smart strategies that will give you fast results? Then welcome to our blog where we discuss the best tiered discount strategies for Shopify stores. Here, we will discuss tiered discounts’ role, benefits, and different strategy types. We will also learn how to set up tiered offers on Shopify, best practices, and promotions to attract buyers. So, let us get started!
A Shopify store tested a marketing strategy to see tiered discount effects on sales. In 24 hours, their AOV doubled astonishing the shopkeepers. Another test shows a 15% increase in the AOV after applying a tiered discount. However, a study shows that tiered discounts with small spending gaps encourage higher customer spending. Keep reading to learn more about such tips.
The Role of Tiered Discounts on Shopify
Tiered Discount Benefits
Types of Tiered Strategies
Configure Tiered Discounts on Shopify
Best Practices
Tiered Discount Promotions
Preguntas frecuentes
A tiered discount is a common pricing strategy where discounts increase as one spends more. For example:
Such offers incentivize customers to increase their cart size for better savings. In simplest words, buy more to save more. Tiered offers create a sense of urgency in buyers. They feel the need to add a few more items to their cart for better deals. The desire to qualify for discounts makes it more likely for them to buy products from you.
Tiered discount strategies are super effective in e-commerce because they target customer behavior encouraging larger purchases. Customers get motivated to buy more when they that it will result in bigger discounts. It is a smart way to push them to add more products to their cart. When this happens, your AOV soars without lowering prices which could have harmed profitability.
Some Shopify sellers have this misconception that tiered discounts will hurt their margins. You need to implement it the right way to avoid facing any loss. Learn to structure the discounts in a way that doesn’t break your profit margins. For example, discounts on high-margin items can bring more profits than those on low-margin items.
Another common misconception is that only large businesses or stores with big budgets can use tiered discounts. In reality, any sized Shopify store can benefit from this discounting strategy. Small businesses need the right tools to create discounts that encourage more purchases.
There are several benefits to making this discount type one of the most popular on Shopify. Have a look at some of these below:
In tiered discount strategies b2b sales, profits are guaranteed with strategic planning. Bulk purchases, personalized discounts, and purchase-threshold offers are the most popular. You increase your revenue by incentivizing businesses to place large orders.
If you want to increase customer loyalty, then tiered offers are your answer. Reward your repeat customers with attractive discounts so that they spend more over time. Create a loyalty program to increase customer retention. For example, offer a tiered discount based on the total money spent over a certain time. This is how you reward your repeat customers for their continued loyalty and support.
By now we know how helpful tiered offers can be in increasing average order value. Customers feel motivated to add extra items to their cart to save more by spending more. There is an increase in AOV as more items are sold and profits are gained. Suppose a customer plans to buy one item for $40. You put a 15% discount on orders over $100. This will push your customer to buy more to qualify for that discount.
This is where we learn the different types of tiered discount strategies. Let us learn these strategies to identify which suits your business best.
Use top-tier discount codes to incentivize large purchases or reward loyal buyers. These are some of the best-tiered loyalty program examples. Discount codes are usually offered to those who reach a specific spending threshold. The codes often provide the highest percentage off. This strategy can be used to increase customer satisfaction and Shopify sales.
Seasonal or flash sales are excellent times when tiered discounts are highly effective. Peak shopping periods are often used for offers to create urgency in customers. For example, a limited-time offering 10% discount for orders over $60, a 20% discount for orders over $80, and a 30% discount for orders over $100.
This is one of the most common tiered discount strategies in E-commerce. Encourage your customers to buy in large quantities by using this tactic. For example, offer a 5% discount for buying 3 items together, a 10% discount for buying 5 items together, and a 15% discount for buying 10 items together. In this way, you are increasing your sales volume and reducing inventory.
Now that you know the strategy types, let us dive in on how to set up tiered discounts.
Shopify has some incredible features to let you set up basic tiered discounts. Configure offers based on the minimum purchase amount. Discounts can be percentage off or fixed discounts. But Shopify lacks advanced features which is why we have third-party discount tools to make offers more enticing.
1. Go to your Shopify Admin page and click on the Discounts on the left. Click on the Add Discount button to create a new discount.
Shopify – Discounts – Add Discounts
2. Select Amount off order from the Select discount type options.
Shopify – Discounts – AmountOFFOrders
3. Let us name this Discount Code as SAVE30
Shopify – Discounts – DiscountCode
4. We then fill up the rest of the boxes. Here, we give 30% as the discount percentage and $100 as the minimum dollar amount for the purchase. Save it after you are done.
Shopify – Discounts – PercentageValue – Minimum Purchase Amount
Similarly, click the Add Discount to create a new discount. Create other discount thresholds like 50% and 70% with a minimum purchase amount of your choice. Repeat the process and you will have tiered discounts ready for your Shopify store.
For advanced options, explore apps like DescuentoRay which is a Shopify tiered discount app. Such applications will allow you to set multiple discount tiers and automate the discount application process. You can display discount offers even on product pages to encourage more purchases.
Third-party discount apps allow customers to have a smoother online shopping experience. A simple guide for DiscountRay is shown below to give you an idea about such apps.
1. Install DiscountRay to your Shopify store. You will see a dashboard similar to the one below:
DiscountRay Dashboard
2. Scroll down and select “create new” to create a new offer.
DiscountRay_CreateNew
3. Choose any one of the two options. Here, we select Quantity discount.
DiscountRay_DiscountOptions
4. Give a name to your discount and select “Specific product” if you have a specific item in mind to apply the discount on. Here, we chose our product called Hello Kitty Shirt.
DiscountRay_QuantityDiscount_NameProduct
5. Select “Create new” and fill up the Quantity with the corresponding Discount percentage that you want. Click “+ Add range” if you want to add more. Click on the Activate button to activate this offer.
DiscountRay_Quantity_Activate
6. Finally, you get to select your target customers with the Customer eligibility feature. After you’re done, hit the save button.
DiscountRay_Quantity_CustomerEligibility
7. As we can see, a clear display of our discount offer is seen on the product page.
DiscountRay_QuantityDiscountLiveView1
8. We can see the discount being implemented in your cart.
DiscountRay_QuantityDiscountLiveView3
Similarly, we set up the Variants discounted price. But you cannot activate both the types at the same time. So deactivate one before activating another one.
To make the most of these discount strategies, here are some best practices to follow:
Discount displays should be clear where information is easy to understand. A complicated discount structure may frustrate buyers. This leads to many abandoning their carts, thus, making your offers a failure. Keep offers simple so that it is quick and easy to know how to qualify for the rewards.
One common mistake is to set thresholds that are too high to reach. For example, your AOV is $40 and you are offering 20% off for orders over $200. Such discounts will not prove to be effective and do not seem realistic. Make sure your discount tiers are simple and align with buyers’ shopping habits.
To ensure your strategies are effective, use analytics tools to analyze sales data. Regular data analysis helps spot flaws in your Shopify business which you can later improve on. Monitor how customers respond to certain discount tiers.
A/B testing is useful to help identify which discount structures will be the best for your store. You can then adjust offers according to your observations. Shopify offers some helpful analytic tools that you can use to monitor your performance.
Online promotions will help you get the most out of your tiered discount strategy. Here are some of the ways you can increase discount visibility:
Start with Shopify’s amazing built-in marketing tools. Automate discounts, track their performance and add them on checkout pages. These tools help provide a seamless experience for your customers.
This is a smart trick that will create an urge in your customers to buy for discounts. Highlight tiered discounts on product pages to make offers more visible to their eyes.
What better way to promote discounts than using email marketing and social media? Create email newsletters to let your customers know about your special deals. Use social media platforms to reach out to your target audience and boost engagement. This is how you can drive traffic to your store.
Try out our listed tiered discount strategies for your Shopify store and find out for yourself how useful these are. You will not be disappointed. You know their benefits, the best practices, how to set them up, and how to promote them. Now it is time to implement all the tips and figure out the best ways to boost your sales. We all are cheering up for you. Good luck!
What are tiered discount strategies?
These are discounting strategies where discounts increase as customers buy more. This is how you can boost AOV and incentivize higher volume purchases.
How can I set up tiered discounts in Shopify?
You can use Shopify’s native discount tools or third-party apps like DescuentoRay to provide customizable options.
If you want to use the basic discount features of Shopify, simply click “Discounts” on the left side of your admin page.
Discounts → Create Discount → + Add Discount → Amount off order
Then you need to fill up the boxes with your choice of discount amounts.
What are the benefits of tiered discounts for Shopify stores?
The benefits are many like reduced cart abandonment, increased customer spending, and building loyalty. Altogether, your revenue increases you know how to implement it the right way.
Can I show tiered discounts on product pages in Shopify?
Yes, many Shopify apps allow you to display tiered discounts on product pages. Such displays make it clear to customers how much they can save.
What is the difference between tiered pricing and tiered discounts?
Tiered pricing means adjusting the price per unit based on quantity.
Example:
Buy 1-10 items → $10 each.
Buy 11-20 items → $8 each.
Buy 21+ items → $6 each.
Tiered discounts mean the percentage of fixed discounts based on the total quantity bought.
Example:
Spend $50 → Get 10% off.
Spend $100 → Get 20% off.
Spend $200 → Get 30% off.
Are tiered discounts effective for B2B Shopify merchants?
Most certainly. B2B buyers often buy in bulk. Tiered discounts cater to their buying habits encouraging them to repeat business.
How can I promote tiered discounts to my customers?
Use social media campaigns, highlight discounts on product pages, and use Shopify’s email marketing tools to promote your offers.
Can I combine tiered discounts with other Shopify promotions?
Shopify lets you stack discounts using third-party tools. You can then combine tiered discounts with free shipping or seasonal offers.
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