Retailers: how to avoid over-reliance on discounting

More than ever, brand marketers are under increasing pressure to reduce reliance on sales, discounting, offers and panic-promotions that undermine profit margins.

But with competition fierce, and consumers holding all the purchase power, what can the modern marketer do to reduce discounting tactics while maintaining sales and revenue?

Take the affiliate channel: the traditional perception of affiliate and partnership marketing is that it involves a huge amount of discounting, cashback and voucher codes. This has made many retailers, understandably, wary of throwing their hat in the affiliate ring. While the discounting approach can offer significant advantages when used strategically, it’s just one of the myriad tactics that make up a strong affiliate channel. 

Take a top-down approach

Discount reseller, MandM Direct, made the decision to move away from overlay discounting and free P&P several years ago. Their analysis showed that although they began to take less orders, the new approach led to increased order value, which resulted in increased profits. Instead of attracting deal-searching customers, the brand has grown a solid base of loyal consumers – and has shifted focus to metrics like retention rates, which have significantly improved.

Use search domination

Consider leveraging the affiliate channel alongside SEO and PPC. By working with publishers with strong domain authority and high organic ranking, retailers can target ‘non-brand’ keywords with high search volumes and strong conversion rates. This tactic allows firms to increase market share, ultimately without the need for discounting.

Leverage internal teams

Data insights and CRM teams can allow retailers to highlight trends in consumer behaviour, such as key product lines that sell regardless of discounting – and so should be excluded from discounting programs – as well as products that struggle to sell, so the affiliate program can further focus on liquidising this stock. Additionally, focus on data that looks to increase consumer loyalty, for example target offers specifically for returning customers such as discounts on birthdays or refer-a-friend programs.

Work with content partners

An important part of any marketing strategy is finding routes to incentivise consumers between the major discounting holidays, and act to increase customer purchase intent.

One such approach is through leveraging content partners. Content partners generally drive higher percentage of revenue from new customers, and the trust consumers associate with these partners also often results in higher order values. Within the customer journey, content publishers are primarily “introducing” touch points vs last-click, so making sure they are paid a fair commission is key.

Develop brand-to-brand partnerships

The brand-to-brand approach is an increasingly popular way to reach another brand’s consumers where there is a match in consumer profiles. Global affiliate marketing agency, Silverbean, has recently launched the Brand to Brand Partnership Network to facilitate conversations between like-minded brands looking to increase visibility, conversions, and of course, revenue.

As with content partners, trust is key for brand-to-brand partnerships – it’s all about increasing distribution and leveraging the relationship a brand has with that consumer to recommend the partner brand and products. Most retailers develop these partnerships in order to monetise, or acquire new customers, and there are many ways to execute the partnership, whether that’s one-way, two-way, or a paid partnership.

Final thought

There are many ways to maximise your marketing success without the need for sales and discounting tactics 24/7.  Retailers that work with a range of affiliates and marketing partnerships, and proactively manage the channel through the above tactics will see considerable growth – and will be in an excellent position to increase order value, sales revenue, and consumer loyalty.

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