Customer Acquisition in the Era of Discounting

Discounting, in traditional businesses is a medium for sellers or retailers to clear their inventory and replenish it with new stock. However, in the era of online marketplaces it has emerged as a means to attract buyers as a swarm of bees.

Furthermore, discounting served both as a boon and a bane for eCommerce companies, as it helped acquire customers in no time and in massive numbers. This also led to a new user habit, as a consequence of which users got hooked to discounting and cart sizes would only be high when there an on going discount or an offer.

In the last couple of months we have seen the downfall of various start-ups which was a consequence of unrealistic discounts. As getting products and services at unrealistic discounted prices emerged as the only motivation for a user to try out a new product. Such users could never be identified as repeat users, as they moved to other platforms when discounting was withdrawn.

Perhaps, ecommerce giants are taking steps in the direction of customer retention, which directly has an impact on the Lifetime value of a customer, also a marginal rise in the average order size.

For instance, Go-Jek, an Indonesian start-up managed to gamify their app which a user can earn they pay for any of the service, use Go-Pay (home brewed waller by Go-Jek). A user can exchange the points for meal or gift vouchers to MacBooks or iPhones, to raise ambitions and drive retention on their app.

Hence, discounting as a tool to acquire new users is effective, however, it should be strategized in such a way that it improves the lifetime value of the user and makes them come back owing to the entire experience of using your product.

Post acquisition, one should have greater focus on driving customer satisfaction, enhancing the quality of service and maintaining an unceasing supply at all times. Laser sharp focus on user retention with innovative ways to increase the lifetime value, with an aim to de-addict users hooked to discounts, is the next leap in the future of online businesses. Giving discounts on next purchase is also a great motivational factor to push repeat rate.

To unleash the power; customer retention with loyalty programs and wallet discounts or gamification that drives retention is the next level up. First find ways to attract customers and create a magic with your technology and human resources; to obtain the most on a trajectory to the future.