Increase retail sales with SMS discounts
If customer service SMS works indirectly, discounts are on the nose. They give customers a reason to visit your store, click your link, or place an order.
There’s a reason why so many retailers use discounts: they work. Statista research shows about 93% of shoppers use coupons or codes throughout the year.
All that good stuff because of a simple voucher. Who’d have thought it?
We’re at a point in retail where shoppers expect or demand deals as standard. Especially if it’s an exclusive offer, like one that new customers would receive after joining a brand’s subscriber list.
Another study published by Psychology Today found discount users prefer to buy products with vouchers even if it means spending more money. So not only could discounting help push prospects over the line to become customers, but it could also help raise your average order value (AOV).
And if you’re still not convinced, here are some more eye-opening stats around SMS discounting campaigns:
- 89% of customers named price as a primary factor influencing their purchasing decisions, while 82% named quality
- 89% of shoppers who use promotions say their purchase was triggered by a promotion
- 86% of the shoppers surveyed said coupons have influenced them to try a new product
- 84% of shoppers say coupons influence their store choices
Sources: Hawk Incentives Research, Tools Group, Valassis
And if we recall a stat we used at the top, more than two-thirds of smartphone users have opted in to receive texts. So, customers are keen to see what kind of discounts you’ve got.
6 types of discounts to send in your SMS campaigns
We’ve covered the why and how of discounts. Now, let’s look at the what. Here are six of the best discount offers to experiment with.
1. The Buy One Get One Free (BOGOF)
The BOGOF does what it says on the tin. You offer a product at the regular price and give away a second identical product for free.
A study by AMG found that 66% of shoppers rated this type of discount as their favourite and 93% of all shoppers have taken advantage of a BOGOF deal.
While you don’t want to start giving away high-end items, if you have a lot of stock to shift, edible products with a sell-by-date, or unit-based and bulk products, BOGOF is a great way to boost sales and get rid of surplus stock.
The offer does the hard work here, so you don’t need to get too creative. But if you want to try something innovative, experiment with offering this as part of a multichannel strategy.
For example, if a customer buys one item using your online store, they could get the second one free in-store (or vice-versa). This can encourage more people to visit you in different places.
You could also try tailoring BOGOF deals to specific groups. Here’s an example:
Hey [NAME], it’s BOGOF time. Buy one [PRODUCT] and have another on us. But be quick because stock is limited. Shop now: [LINK]
Buy one [PRODUCT] and we’ll give you a second one in-store for free. Yep, you read that right. Here’s the link you need: [LINK]
2. The first-time discount
An offer we’ve talked about already as a way to grow your list. The first order discount can be the nudge visitors need to become paying customers.
Experiment with different discount sizes as percentages (e.g. 5% off or 10% off) and money off (e.g. get £5 off).
You can also add extra perks like free shipping. A study by Mollie found high shipping costs were the biggest reason for cart abandonment. So, taking on the cost yourself can help increase your sales.
Remember, always send your first-time discount with, or as an immediate follow-up to, your introductory text to keep your customers engaged with the offer.
Some examples:
Hey! Thanks for signing up. Use this code [CODE] at checkout to get [X]% off your order. [LINK]
Hi [NAME]. Looks like you’ve left something behind! Here’s a special promo code to get £[X] off your order! 🤩 Just use [CODE] at checkout by [DATE].
3. The flash sale
Flash sales offer a big discount for a limited time (no longer than 72 hours). They tap into the fear of missing out (FOMO) to create a buzz and get customers to act quickly.
It’s another effective tactic if you have excess inventory to shift, or if you have a good number of returning customers who will notice and appreciate the drop in prices, and want to grab a deal.
Reward SMS subscribers by giving them early access to sales. Offering an early exclusive like this is another great way to attract new business and grow your subscriber list too.
If it’s a big event that doesn’t come around often, ramp up excitement by texting your list in the weeks and days ahead. Make sure you set up SMS alerts say what’s discounted and for how long.
As for what your discount should be, research by Rakuten shows percentage off, BOGOF and discount codes are the top three preferred options
Hey VIP! Our big [X] hour sale starts tomorrow, but you have early access 👌 Get in there first and grab [Y] off. [LINK]
Our biggest event of the year is live until MIDNIGHT. Use code [CODE] to unlock your [Y]% discount now. [LINK]
4. The tiered discount
Tiered discounts target new and existing customers by offering money off a purchase, but only if they spend a certain amount.
You definitely will have come across these before:
- Get 20% off when you spend £99+
- £50 off your first order (when you spend £200 or more)
- Get a £5 in-store voucher when you spend £50
- Get free shipping on orders over £50
Using a threshold is a good way to get customers to add more items to their basket than they otherwise would, and boost your AOV in the process.
To work out what to set your threshold at, look at your average order value. The higher the AOV, the bigger the offer. For example, if your customers spend £40 on average, offering 10% off a £49 spend is a tempting offer. But if it’s £200, customers will want a larger discount.
Beat the holiday rush! Get 50% off when you spend £150 on [CATEGORY] for [X] hours only.
Spend more and save more! Use the code [CODE] at checkout to get [X]% off your next order over £[X].
5. Personalised discounts
Personalised discounts are offers you send to specific groups on your SMS list. They’re based on things like demographics (age, gender, etc.) interests, shopping habits, location, and website activity.
All this information comes from customer data you collect in SMS surveys or from purchase history.
For example, if you’re a fashion retailer, you can send different offers to female and male subscribers. Or, if you have UK-wide stores, you can send one offer to customers in London and a different offer to customers in Glasgow.
Or, a more classic example: celebrate their birthday.
Targeting discounts gives customers more value and a more personal experience. It also prevents choice overload by suggesting products they’re likely to be interested in.
Happy birthday, [NAME]! Here’s a gift from us. Get [X]% off your next order by using the code [CODE] at checkout
Hey [NAME], it’s been a while since you ordered your favourite [PRODUCT]. Ready to pick up another? Use this code and get [X]% off on us [CODE]. [LINK]
💡 Personalising your SMS campaigns can increase your revenue, cut your acquisition costs and improve your marketing return on investment (ROI). Want to learn more? When you’ve finished this ebook, go ahead and check out this one for everything you need to know: Getting Started with SMS Personalisation.
6. VIP discounts
VIP discounts treat SMS subscribers like they’re at the head of the table by giving them offers no one else is getting. The exclusivity makes loyal customers feel valued, creating an even stronger bond. It also keeps them spending money with you.
For VIP discounts to work, you need to roll out the red carpet. If everyone who signs up to your list gets 10% off an order, sending the same offer to loyal customers won’t have an impact. So, think bigger:
- Thank you gifts: Money off products or a gift with each purchase
- VIP access to sales: 24-48 hours before non-subscribers
- VIP exclusive events: Unique codes for VIP-only sales
- Milestone celebrations: Discounts for customers who’ve spent a certain amount of money or made a certain number of purchases
Did we ever tell you we love you? How about we say it with a discount? Enter the [CODE] at checkout or show us this text in-store to get £[X] off your next order.
P.S. We’ve created a special sale event only for VIPs and you’re one of them. The items you love at up to [X]% off. Here’s the secret link: [LINK]
When should you offer discounts in your SMS campaigns?
You can work out the right product-to-discount strategy from your customer database. Which of your products have customers responded well to? How frequent are their purchases?
For example, if you know that your customers like to buy in bulk, a money-off or percentage discount will save them money on large orders and encourage them to spend more at once with you. But if they tend to buy single items, a BOGOF deal will prove a better motivator.
It’s also a good idea to experiment with duration and seasonality to ensure that your discounting strategy doesn’t become predictable. Discounts should tempt customers to act and it might have less effect if you train them to wait for offers or make your promotions open-ended.
Ideally, keep the timeframe for codes and offers short to maintain a sense of urgency (12-72 hours is ideal). You can also try rolling out timed discounts to reward customers for acting fast.
For example, in a 24-hour sale, you could set the discount for hour one at 24%, then decrease it by 1% every hour.
The bottom line is, there’s a knack to it. While the right discount gets customers buying, discounting can have the opposite effect and catalyse a loss of trust, value, or exclusivity – or in the worst-case scenario lead your customers to opt out altogether.
If you stick to the tips in this blog then discounting could be one of your biggest allies for boosting the ROI of your SMS campaigns – especially as we head into peak season.