Podcast 02: How to Get Started with Discount Ladders

Nerd Marketing Ecommerce Podcast

I walk you through how to set-up and run effective discount ladders. I zero in on using these ladders to create a killer eCommerce retention program in just four easy steps. Subscribe: iTunes | Stitcher EXCLUSIVE RESOURCE: If you want my summary playbook for setting up your own discount ladder, just sign up for my email list and I'll send it to you. If you aren't using them, you should be. Highlights Discount ladders can help you retain customers There are four steps to setting up effective discount ladders Step 1: Determine your discount intervals Step 2: Set your promotions Step 3: Start testing monhtly Step 4: Identify your most profitable offers Links / Resources Continue learning about Discount Ladders in Episode 1 (Intro to Discount Ladders) and Episode 3 (A Discount Ladder Case Study). If you plan on implementing a discount ladder, you'll also probably be interested in what I have to say about Dynamic Ascending Offers. To learn more about data-driven strategies that grow ecommerce businesses, just sign up for my email list. Transcript Prefer to read rather than listen to the podcast episode? No problem, you'll find a text transcribe below, and you can also download it for later. → Read the Transcript Hey, this is Drew Sanocki. Welcome to the Nerd Marketing Podcast, the only podcast where Drew Sanocki gives you actionable, data-tested strategies to grow your ecommerce retailer. I can guarantee this is the only podcast where you're going to get this, the Nerd Marketing Podcast. We're talking about discount ladders. The title of this podcast is My Proven Retention System Revealed. In essence, I am going to walk you through a retention system that I've used to literally generate millions of dollars for my retailer and for other retailers. That's no exaggeration. I'm not going info product on you here. I'm not going Mr. Salesman on you here. This is just a great strategy to use. In the last podcast, we talked about the idea of discount ladders and how most retailers are not doing promotional activity properly. They are either running blanket promotions to their entire list or, on the flip side, they're never running a promotion. I think the solution is somewhere in the middle. Want to save this transcribe to read later? CLICK HERE to download it as a PDF. It's to ratchet up your promotional activity over time, in particular with the likelihood that a customer will never come back to your retailer. That's what a discount ladder is. In this podcast I am going to walk you through four steps to creating your own discount ladder; in particular, one we will use to retain defecting customers. You can use a discount ladder for a lot of different things; for example, to encourage a first purchase or to encourage someone to read an article or something like that. In this case, the discount ladder is to retain customers. These promotions will go out to your existing customers. Step One: Determine Discount Intervals The first step out of four is to determine your discount intervals. If you have existing customer data, if you've been in business for, say, a year or more, I want you to look at the average time between your typical first and second purchase, your second or third purchases, and so on. It's very easy to do in Excel. You export your transactional data into a spreadsheet and you can run a histogram analysis on that to find just your typical first and second purchase, second to third purchase, what are called latencies, some of the average time between purchase. Wanted this average time between purchase because these are the rungs on our discount ladder. This is how often we will set tripwires at these time intervals. After each tripwire, we'll increase the discount. If you're just starting out, 30/60/90 days works great. For the typical retailer selling apparel, for example, a 30/60/90-day promotional ladder is a great place to start.