How to create a discount pricing strategy for WooCommerce

If you’re looking to create a discount pricing strategy for your online store, or want to start offering discounts to your ecommerce customers, this guide is for you.

In this guide, we’ll walk you through the ins and outs of creating your own ecommerce discount pricing strategy step-by-step.

We’ll help you with objectives, introduce you to different types of discount pricing, and give you some tools to use along the way.

How to create a discount pricing strategy for your WooCommerce store

So, let’s say you want to start offering discounts to your customers as part of your marketing strategy. To do this, you’ll need to come up with a discount pricing strategy that makes sense for your WooCommerce store.

In this section, we’ll walk you through this step-by-step process. Starting with setting your objectives.

Step 1: Set your discount pricing strategy objectives

Before we talk about types of discount pricing and tools, we first need to talk about objectives. Because if your discount pricing strategy doesn’t have a set of objectives to follow, you’ll have nothing to track and measure success against.

So what do we mean by objectives? Well, your discount strategy could have any of the following goals:

• Increase sales volume: Boost sales by encouraging more purchases through attractive discounts and promotional pricing.
• Clear excess inventory: Move excess or old inventory quickly to make room for new products without losing revenue to lost stock.
• Attract new customers (customer acquisition): Offer introductory customer discounts to draw in first-time buyers and expand your customer base.
• Improve customer retention: Provide exclusive discounts to repeat customers to encourage customer loyalty and future purchases.
• Promote specific products: Highlight and increase sales of particular items through targeted discounts.
• Drive seasonal sales: Capitalize on seasonal trends by offering seasonal discounts during peak shopping periods like holidays and Black Friday sales.
• Boost your average order value: Use discounts on minimum purchase amounts to increase the average transaction size.
• Improve your customer lifetime value: Implement discounts that encourage long-term engagement and repeat business from customers.
• Improve conversion rates: Offer limited-time discounts to encourage hesitant visitors to complete their purchases and reduce cart abandonment.

What you decide as your objectives/goals will then determine how you track and measure your discount pricing strategy as you go. We’ll talk a little more about that in step 4.

So now we have our objectives, we can decide which discount types we will use.

Step 2: Pick the right discounts to use for your store

Deciding which discount types to add to your WooCommerce store will depend on a multitude of factors. This includes everything from your goals, store type, available tools, your target market, and more.

Discount pricing examples and types

To get you off to a good start, we’ll outline every type of discount you can offer in your online store.

Percentage discounts

Percentage discounts are perhaps the most common and simple of the bunch. Coupled with fixed-price discounts, these are a foundational type of discount that you will likely find in most other discount strategies.

With a percentage discount, you offer a percentage off the original price (e.g. 10% off). This is beneficial because it appeals to customers by visibly reducing the cost, making them feel they are getting a better deal.

Fixed amount discounts

Like percentage discounts, fixed-price discounts are the basis for many of the other discount pricing examples in this section.

A fixed-price discount deducts a specific amount from the price of a product (e.g. $10 off). Changing the price in this way can be particularly enticing for higher-priced items, where the customer sees tangible savings.

Volume discounts/quantity discount

Quantity/volume pricing (also known as quantity discounts) is based on the amount spent or the number of items purchased. This incentivizes larger purchases and can increase your store’s average order value.

This type of discount is typically used by wholesale stores or stores that sell a large quantity of goods and want to offer a bulk discount.

These three discount types are your foundations, but when it comes to creating your discount pricing strategy, you’ll want to get a little more specific than that.

Specific discount pricing strategies

The following discount types can be seen as in-store marketing strategies specifically used to drive sales.

The following list explains what each is and why it will benefit your WooCommerce store:

• Buy-one-get-one-free (BOGO): Buy one item and get another item for free or at a reduced price. This encourages customers to buy more than one item, increasing sales volume.
• Free shipping: Offer free shipping on orders over a certain amount or on all orders. This reduces the overall cost for the customer and can be a deciding factor for completing a purchase, especially if shipping costs are high.
• Seasonal discounts: Provide discounts during specific seasons or holidays (e.g., Black Friday, Cyber Monday, Christmas). These align with shopping trends when customers are already looking to spend money, boosting sales during peak times.
• First purchase discount: Offer a discount to customers making their first purchase. This can attract new customers to try your store and help convert them into repeat buyers.
• Loyalty discounts/Loyalty program: Provide discounts to repeat customers as a reward for their loyalty. This improves customer retention and encourages repeat purchases, building a loyal customer base.
• Referral discounts: Give discounts to customers who refer new customers to your store. This uses word-of-mouth marketing and helps expand your customer base through existing satisfied customers.
• Flash sales: Offer significant discounts for a very short period to create a sense of urgency. WooCommerce flash sales can drive quick short-term sales and create excitement around your store.
• Clearance sales: Discount prices on items that need to be sold quickly, often to make room for new inventory. This helps manage inventory levels and ensures older stock is sold rather than taking up valuable space.
• Member-exclusive discounts: Offer special discounts to your store's members or subscribers. This adds value to membership and can drive sign-ups and repeat visits.
• Bundle discounts: Offer a reduced price for purchasing a set of items together. Combo offers like this encourage customers to buy more products and can help promote items that sell well together.
• Abandoned cart discounts: Send discount codes to customers who left items in their cart without completing the purchase. This helps recover potentially lost sales by nudging customers to complete their transactions.
• Anniversary discounts: Offer cart discounts on the anniversary of the customer’s first purchase or on the store’s anniversary. This makes customers feel appreciated and encourages them to shop again.
• Birthday discounts: Provide discounts to customers on their birthdays. This personalized offer can make customers feel special and prompt them to purchase.
• Limited-time offers: Create urgency with discounts only available for a limited time. This can spur immediate action from customers who don’t want to miss out on a deal.
• Newsletter signup discounts: Give discounts to customers who sign up for the store’s newsletter. This helps grow your email list, allowing for more direct marketing opportunities.

So now we have a clear list of discount types, you likely have a good idea of what kind of discounts you’d like to offer your ecommerce business customers. Once this is set, it’s time to pick the right tools for the job.

Step 3: Pick your tools

Depending on which of the following discount pricing strategies you’ve chosen to implement from above, you’ll need a tool to help get it done.

If you’re looking to add discount pricing for your WooCommerce store, WooCommerce itself has only a few basic settings. So, to achieve your discount pricing goals, you’ll need one or both of the following plugins:

• WooCommerce Discount Manager. This plugin gives you the ability to add advanced discounts to your WooCommerce store. Include everything from bulk discounts, to role-based pricing, BOGOF deals, and more.
• Iconic Sales Booster for WooCommerce. This plugin allows you to add discount pricing via cross-selling. Add Frequently Bought Together items with a discount, impulse-buy prompts at the checkout, and after-checkout offers.

We’ll go through each of these in turn, so you can see how they work and will benefit your online store.

Add a wide variety of discounts with WooCommerce Discount Manager

To do this, you’ll need the help of the plugin WooCommerce Discount Manager. This plugin helps you to create a huge number of different discount pricing strategies for your WooCommerce store.

It’s flexible to your needs, so if you want to launch a store-wide sale one week, or a buy one get one free deal the next, you can.

With WooCommerce Discount Manager, you’ll be able to:

• Set percentage, fixed-price, bulk, quantity, and dynamic pricing for your products.
• Create buy-one-get-one-free deals and free or gift products based on certain criteria.
• Create store-wide sales and schedule them with start and end dates.
• Create customer-specific pricing and role-based pricing for members, subscribers, and more.
• Customize your discount messages on product and cart pages.
• and so much more.

You’ll be able to get specific with your discounts, creating tiered pricing tables and dynamic rules and setting them for specific products, categories, or store-wide.

If you’re looking for one plugin to cater to all your current and future discounting needs, this is it.

So, let’s say you’ve picked your discount types, you’ve set them up, and you’re ready to go. What’s next?

Add cross-sells and discounts with Iconic Sales Booster for WooCommerce

One of the easiest ways to boost your store’s average order value, move old stock, and increase sales is through cross-selling.

By using your existing products and adding the cross-selling features within Iconic Sales Booster, you’ll be able to offer customers discounts throughout their buying journey.

Iconic Sales Booster for WooCommerce does this with the following cross-selling methods:

1. Frequently Bought Together. This feature adds a section to your WooCommerce product page, offering a customizable bundle offer of products with a discount - much like Amazon. You’ll be able to customize everything from the discount type to the bundle messaging and more.
   

   

2. Customers Also Bought. After a customer clicks ‘add to cart’ they’ll be presented with a strategic popup. This contains their cart contents and other products other customers also bought recently. While there’s no discount in this section, it’s a valuable spot to encourage more purchases.
   

   

3. Order Bump at Checkout. When a customer reaches the checkout, it’s a prime spot to encourage an extra sale. This is because they’ve already shown their intent to buy. With Sales Booster, you’ll be able to offer an additional limited-time offer with a discount to sweeten the deal.
   

   

4. One-click Cross-Sell After Checkout. Lastly, with Sales Booster you can offer customers one more deal. This time, after they’ve completed their checkout. This offer allows them to add it to their already completed order without entering any payment details again.

With Iconic Sales Booster for WooCommerce in place, you’ll be able to offer very specific discount strategies to your store with the added power of cross-selling.

Let’s say you want some additional tools, though. What if you want also to add quantity discounts, dynamic discounts, and more?

Step 4: Test, adjust, and track

With your discounts running on your WooCommerce store, testing them first is always important. The last thing you want is for these discounts not to work out and lose you revenue. This is especially important if you’ve opted for complicated pricing rules.

In this case, we recommend testing your discount strategy on a testing store before adding it to your live one.

Once this is done and you’re happy with the results, you’ll next need to track your discount pricing strategy progress.

How to track your discount pricing strategy

There are a few methods you can use to see if your discount pricing strategy is working for your online store or not. We’ll outline a few of these below. Which you pick will depend on the strategy you’ve used.

Increased sales metrics

This is the goal for many retailers looking to offer promotional discounts to their customers. The goal is to increase profit margins even with lower prices. So, what do you track if this is your goal?

• Revenue: Track overall revenue. Even if the discount reduces the price, increased volume can lead to higher total revenue.
• Average order value (AOV): Measure the average order value before and after the discount. An effective strategy should maintain or increase AOV.
• Conversion rates: Monitor the percentage of visitors who make a purchase. An increase suggests the discount is enticing more customers to buy.
• Return on investment (ROI): Calculate the ROI for your discount campaigns by comparing the revenue generated against the cost of discounts offered.

Customer acquisition metrics

If your goal is to attract new customers to your online store, the metrics you’ll want to focus on will be quite specific.

• New customer acquisition: Track the number of new customers gained through discounts like the first purchase.
• Website traffic: Track changes in the number of visitors to your site. Promotions should drive more traffic.
• Referral traffic: Measure traffic and conversions from referral programs. Effective referral discounts should increase both.
• Social media engagement: Monitor mentions, comments, and shares related to your discount promotions. High engagement suggests strong customer interest.

Customer loyalty metrics

If your goal is to encourage loyalty to your brand and keep customers coming back, the metrics you track should focus on those things.

• Customer retention rate: Measure how many customers return to make another purchase. Loyalty discounts should boost this rate.
• Customer lifetime value (CLV): Calculate the average revenue a customer generates over their lifetime. Effective discounts should enhance CLV by encouraging repeat purchases.

All of these should be tracked from when you started the discounts. It’s good practice to keep these discounts running for a long time to get accurate data. Too short, and you won’t see useable results.

Put together your ecommerce discount pricing strategy today

So there we have it, a step-by-step guide to creating a discount pricing strategy for your WooCommerce store. Depending on your objectives, goals, and what you want to track, you’ll need one or both of the following tools to help you implement it:

• WooCommerce Discount Manager. This plugin gives you the ability to add advanced discounts to your WooCommerce store. Include everything from bulk discounts, to role-based pricing, BOGOF deals, and more.
• Iconic Sales Booster for WooCommerce. This plugin allows you to add discount pricing via cross-selling. Add Frequently Bought Together items with a discount, impulse-buy prompts at the checkout, and after-checkout offers.