Customer Loyalty: Donations Or Discounts?
Updated: Feb 8
Discounts have long been a way for a store to incentivize new visitors and turn them into paying customers. However, they might not be enough to bring customers back. But what if I told you there was another way?
Benefits of Discounts
Discounts have been a great tool for turning a new visitor to your website into a customer. It can be an initial discount for a new visitor to your site or a code used to reactivate a previous user.
Discounts are a useful tool for for stores looking to incentivise their customers for a one-off action like leaving a review.
What Is The Downside Of Donations?
While discounts are a useful tool for getting an initial purchase from a new customer, discount driven customers are the least likely to repurchase, and if they do, they take a long time to do so. With every online brand offering discounts for new buyers. A discount driven customer will have millions of online stores, offering them 10%/15%/20% discounts as a new customer.
Frequent discounting also has the psychological effect of telling your customers that your products are not worth the full retail price.
So what are the alternatives?
Social Impact Donations
Instead of donating 20% off a customer's order why not donate the 20%?
Consider this, instead of saving a customer £20 on an initial order of £100 pounds with a discount, you could have:
Planted 20 trees with Just One Tree
Removed 15kg of garbage from aquatic ecosystems with Seven Clean Seas
Provided 1 month of service to a survivor of trauma and abuse with Breakthrough
Provided 48 hours of vital care to someone affected by autism, epilepsy, or disability with Support Dogs
Put yourselves in the shoes of a customer who has just come to your site, are they more likely to feel good saving a few extra pounds on their order or making a real impact to make the world a better place with your store (and Pledger)?
and the added benefit ... we mentioned that discount driven customers have a lower lifetime value compared to the industry standard.
Donating with your store and leading with social impact has shown to:
Provide you with some excellent cause marketing content
Help convert new visitors into customers
Increase the average order value of a purchase
Increase the lifetime value of customer
Make the world a better place
And it is easy to start, in as little as 6 minutes with the Pledger Shopify Integration you can be donating from sales or letting your customers donate.