Over the past few months, I’ve been hearing variations on a common theme from many of the email marketers I’ve been out talking to: their customers are becoming trained to expect discount offers.

In the wake of a tough retail market, many companies have fallen into the habit of using discount tactics to drive short-term revenues. It's a completely understandable response to such tough conditions, especially since the first couple of times they did it, the figures looked so strong.

But like other addictive habits that feel great when you start, this habit can have damaging side effects. Overusing discount offers in email marketing messages quickly starts to train your audience to wait for the discounts to arrive. Broader (more profitable) value messages start to get lost in the noise.

As a consumer, I’m guilty of playing to this. Ocado, a UK home delivery grocery business, used to get orders from me at least twice a month. Earlier this year, for no particular reason, I didn’t order for a month.

Ocado's response? They very kindly sent me a 15% off voucher for shopping that day…so I took them up on it. A week later they did the same thing…and so did I. I now only shop with Ocado when I get the voucher – about twice a month. They have trained me just as surely as any circus animal.

Fifteen percent off a grocery bill is a hefty chunk of profit margin in this competitive sector. The question is whether I’d have returned to my old shopping frequency at full price if they’d discounted me only once, then followed up with a value message rather than repeating the discount. The answer? Almost certainly, yes.

I’ve heard some retailers complain that they need to go out and find a whole new list of customers who haven’t been trained to expect discount offers (often much deeper than 15%) every time they open an email marketing message – an expensive, potentially damaging outcome.

So what’s the solution?

A shift in shopping habits (such as a once-frequent shopper being away for a while) is a great reason to send a re-engagement message, maybe with a money-off call to action. But I’d strongly recommend not repeating that offer to that customer any time soon.

Instead, you might set up a trigger email to fire a one-off discount email message. If customers bite, great…but then limit further discounts to those customers to only two or three times during their previously-established regular purchase cycle.

Also, identify which customers regularly shop at full price – and segment them separately from customers who only buy with discounts. Setting up an additional segment for those who buy both full price and discounted is equally worthwhile. Then do some long-term testing to assess how these groups respond to different types of email marketing messages.

And above all, don’t let your value proposition to your customers decay to discount-only: keep reminding them of why they loved shopping with you in the first place.

(Oh, but Ocado: please keep the 15% off's coming!)

###

About the Author

Mike Weston is a senior vice president at Lyris, and General Manager for the EMEA organisation. He's a leading figure and a regular speaker on the London digital marketing scene, with a particular focus on customer communication tools including email marketing and social media marketing.

Related Resources:

• Subscribe to Inside Lyris HQ our monthly online-marketing newsletter.
• Download free online-marketing guides, tools and webinars in the Lyris Online-Marketing Resource Center.