When you've exhausted abandoned cart recovery efforts with little traction, you may want to offer a discount as a last resort. Learn how to do this effectively without cutting your bottom line.
If you’ve refined your abandoned cart email flow, optimized your recovery efforts repeatedly, and are still struggling to combat the effects of shopping cart abandonment, you may benefit from offering customers discounts. To see if this will help you recover sales, we’ll cover the following:
Let’s quickly review the basics and then get into how to use discounts effectively to recover abandoned carts without costing you revenue.
Shopping cart abandonment is when customers leave the checkout after adding an item to their virtual cart. This represents a potential sale that was not followed through on. On average, 70% of customers abandon their shopping cart after adding an item, costing you marketing and operational expenses.
This accounts for conversions and revenue that you’ve missed out on, but it’s not too late to recover. Abandoned cart recovery efforts take many forms, including email, messaging, and advertising. If you are already running an abandoned cart email campaign and abandoned cart retargeting ads, then you may benefit from working discounts into your abandoned cart email flow.
Abandoned cart emails are used in recovery efforts. These emails are sent after customers have abandoned their cart in the hopes of recovering the lost sale. You can customize the contents, design, layout, and copy of these emails, and then standardize timing and frequency to determine best practices.
Typically, you measure the success of your abandoned cart email strategy and campaigns with four key metrics:
This will help you determine how much traction you get at each step, and develop strategies to improve recovery. Use these analytics to draw deeper insights about your customer behavior.
Cart abandonment statistics vary greatly across industries, products, and companies. Use overall benchmarks as a baseline, but don’t stick to them too much. Below are the average cart abandonment email performance statistics:
Always use your past performance as an indicator of your progress, and use averages as a benchmark to gauge how you are doing.
One of the leading reasons customers abandon their shopping cart is because of unexpected additional costs such as taxes, shipping, or other fees. Offering a discount to customers that have abandoned directly solves this problem, and gives you a good chance of recovering the sale.
It’s important to offer a discount on your final abandoned cart email, as it should only be used if you aren’t able to recover the sale at full price. Don’t offer an abandoned cart discount too early, or customers will exploit the system. Be particular about the coupon value depending on the abandoned cart value, the number of items in the cart, and previous customer behavior.
Once you’ve decided to use discounts to enhance your abandoned cart recovery efforts, you will need to choose the type of discount to use. Depending on your business and the number of products you offer, you may want to use a combination of different methods.
Always test, track, and analyze the performance of how these discounts impact recovered carts, and fine-tune your process to recover more sales over time. Below are some of the main types of discounts you can offer clients and their success rates:
Discounts centered on percentages are a common coupon method. This is a great way to offer discounts in a scalable way, as you can offer these discounts on high and low-value orders. Percentages help protect you against high-dollar discounts on low-value carts.
Percentage-based discounts have significant open rates, a high click-through rate, but a relatively low revenue per recipient. While many customers open and click-through recovery emails with these offers, you recover less revenue per recovered sale than other discount methods.
While this may be surprising, lower percentage discounts yielded the highest revenue per recipient recovered, with open rates and click rates varying little in comparison. Lower percent discounts still incentivize customers to return, while limiting the lost revenue to you as a retailer. Large discounts may worry potential customers. If you are originally offering a product that you are able to later offer a 30% discount on, customers may wonder about the true value of the product.
A set dollar amount is another common method of offering discounts, where you are given a specific dollar amount off your total order. An important factor to consider here is the average order value, as this has a large impact on how much you are able to recover.
While dollar-based discounts get a lower click-through rate than percentage-based discounts and free shipping discounts, they have the highest revenue per recipient. In fact, these earn 5 times the revenue of other discount methods. The higher the discount, the greater the open rate, click-through rate, and revenue per recipient.
You will need to pay attention to the dollar value you offer and the average order value of recovered carts. While on average, results showed this to recover the greatest value, this is not true in every case. You will want to gauge the best dollar value to offer, ensuring that you don’t cut into your revenue by offering too much to customers.
Shipping and delivery is a key component of ecommerce shopping, as customers are buying online for convenience. Offering free shipping is a great way to recover customers, as it eliminates a direct cost that may have been holding them up. Some customers will even react better to this than to the same dollar-value being offered. As more places offer free shipping, customers come to expect it.
Free shipping discount offers had the highest open and click-through rates as compared to the other methods. However, the revenue per recipient was barely higher than percentage-based discounts. Overall, free shipping draws a lot of customers back, but doesn’t earn you back the same amount of revenue as dollar-based discounts.
Every little bit helps, so gaining small increments on each previously abandoned customer still brings back value and is worth your time.
Creating a loyalty and reward system for your customers can be a great way to offer controlled discounts. This method can ensure that customers don’t abuse your email recovery campaign that uses discounts to close the deal. Customers will get used to this, and intentionally abandon to qualify for the discount.
A loyalty — or other type of rewards program — can ensure that you offer customers discounts, while limiting how many customers are able to access the offer. This ensures you prioritize existing customers and reward them for consistently buying from you. This is a great way to increase the life-time value of the customer as well.
Abandoned cart discounts can help with recovery efforts, finalizing a sale that otherwise would remain incomplete. However, they need to be handled with caution, as they can be abused by your potential customers.
If you consistently offer discounts to any customer that abandons, customers will become wise to this and share this information on forums, community message boards, and social media. Before you know it, customers will expect a discount, and intentionally abandon in order to get the offer.
To avoid this, approach your abandoned cart discount strategy cautiously. Target discounts specific to users, products, order value, and more to make sure these discounts are still helping you drive revenue.
It is also important to note that consistent, frequent discounting can devalue your product over time. In some cases, it’s better to leverage loyalty and rewards programs to offer discounts to regular, devoted customers, and to instill this loyalty in other visitors.
Limit the need to recover abandoned carts with an optimized, streamlined checkout experience that helps capture more sales and reduces the impact of shopping cart abandonment on your ecommerce store. Bolt gives retailers a fast checkout experience without compromising on security.
Our checkout experience comes with a high-quality fraud management system that detects and prevents fraud. We are so confident in the security we offer customers that we offer a 100% guarantee on fraudulent chargebacks. Rely on Bolt to identify and protect fraud within your store, using more fraud indicators that allow you to approve more valid orders.