Promotional Marketing: 9 Ways to Squeeze More ROI Out of Your Shopping Cart

Marketers have developed quite a bag of promotion and coupon tricks to get consumers to spend more at the checkout counter or when mailing in the order form.

The good news for online retailers is that modern e-commerce software lets them easily adapt these proven promotional marketing techniques to an online environment to lift average order sizes, revenues and profits.

Promotions are time-based discounts applied to shopping carts during the shopping experience or at checkout. They can range from a percentage or dollar amount off all the way to free shipping or even additional free or discounted products. A promotion can be linked to an individual product, a collection of products or an entire order. It can be associated with random users, groups of users or specific individuals, and can also be restricted to one transaction or unlimited.

Delivering and managing these promotional options requires an e-commerce system with a strong rules-based engine. The system should enable the website to apply different promotional offers to different products, customers and situations so innovative marketing ideas can be easily implemented throughout the website. Here are nine promotional marketing techniques that will increase your customers' shopping carts –— and your sales.

1. Free Shipping
A common offer made in direct marketing is, "order now and get free shipping." Customers would rather not pay shipping and handling charges, especially in catalog marketing and e-commerce.

Free shipping can be applied to an individual product or set of products. You may also exclude specific products from the promotion, or require a minimum order total to qualify for free shipping.

Special shipping codes allow customers to get free or discounted shipping on their orders (based on a service level of your choosing — same day, next day, standard air, ground, etc.) when the code is redeemed. The code may be limited to one per customer and/or the first order only, if desired. The retailer can select specific products that are applicable for this promotion.

2. Premiums
A premium is a free gift given as an incentive to order. A premium may be offered with any order, only for ordering specific products, or with orders of more than a certain dollar amount. Premiums may be a single item, or multiple premiums could be offered within a single order. For example, a merchant catering to younger buyers could offer a free song download with every purchase. When the product is seen as a commodity, offering a bonus gift can help differentiate your offering from the competition.

Items that make good premiums have high desirability, high perceived value in proportion to the cost of goods, or both. Relevance to the merchant's product line is desirable but less critical. During the H1N1 flu scare last year, for example, one merchant offered hand soap dispensers as a free gift.

3. Discounts
Discounts are another proven technique for generating more orders. The discount can either be a fixed dollar amount off the list price or a percentage off the list price. They work best when there's a time limit during which the consumer must complete the transaction to get the savings. To make this work, your e-commerce system must revert to the nondiscounted list price automatically after the offer deadline date expires.

Discounts can also increase based on total dollar amount of the sale or number of units of a particular item purchased. Volume discounts encourage consumers to purchase in bulk and increase average 
order sizes.

4. Coupons
Just as consumers can redeem clipped newspaper coupons at the supermarket checkout, online shoppers can redeem electronic coupons when checking out with their shopping carts. Prospects are given a promotion card via postcard, email or other communication. By filling in the promo code on the order page, they receive the discount or other special offer.

Coupons are cash equivalents applied to shopping carts at checkout. For coupons to work online, your software should be flexible enough that you can set the start and end time of coupons, and determine if they're transferable and can be used in tandem with other promotions or special pricing.

Coupons need to be proactively produced and distributed, so your e-commerce solution should have an interface for creating coupon keys. The system should display a page listing all coupons the customer has redeemed and registered at the site that can be used during the checkout process.

5. Refer a Friend
One use of coupons is for refer-a-friend offers. Say your customer Jeff refers his friend Nancy to buy a product from your site. The contact is done through an email form initiated by the customer in your online store. When Nancy buys a product from your site, the e-commerce software sends Jeff a coupon good for a discount on a future purchase.

Coupons can also help traditional 
brick-and-mortar stores introduce a website to their customer bases. Store clerks can distribute personalized discount coupons to shoppers at checkout. The coupons entice those shoppers to log on to the store website and potentially make additional purchases online.

6. BOGO
To enable buy-one-get-one-free offers (BOGO), your e-commerce software should support any variation of the buy-one-get-one-free concept. Buy product A, for example, and get 50 percent off product B. Or order two units of product A and get the third one free.

You should also be able to bundle multiple products and sell them as one package. The idea is to discount the bundle so it's substantially less expensive compared to buying each of the SKUs individually. BOGO and bundling are powerful methods that can turn slow-moving inventory by promoting it with more popular items.

7.Quantity-Driven Price
For items that are normally purchased in volume (e.g., office supplies), volume discounts can spur customers to purchase greater quantities than originally intended. You might offer a 5 percent discount for purchases of five to 10 units, for example, but 10 percent when a customer buys 11 to 20 — prompting customers who intended to buy eight to up their orders to 10.

In addition, different pricing can be applied to different customers based on their user profiles. Frequent shoppers may dynamically be shown lower prices for some or all products, or different buying groups (e.g., varying levels of site membership) can be shown special pricing.

8. Loyalty Marketing
In a "frequent buyer" loyalty program, customers earn points based on their purchase histories and the money they spend. These points can be redeemed as payment on future purchases. The airline industry is perhaps the biggest user of loyalty systems with its "frequent flier" programs, but the idea is adaptable to any industry and any product.

9. Microsites
With microsite capability, you can let dealers, distributors and others who sell your products publish your online catalog on their websites. A local furniture dealer could have tables, desks, couches and other furniture from multiple manufacturers available for sale on its website. This eliminates the tedious and expensive task of replicating an online store for dozens or hundreds of different resellers.

There are basically three ways online retailers can increase revenues and profits: get more customers, lift average order size and generate more frequent orders. With these e-commerce enabled promotions, you can get more business from all three.

Bob Bly is a freelance copywriter specializing in direct response and online marketing (rwbly@bly.com). Erez Katz is executive vice president and general manager of Bridgeline Digital (ekatz@bridgelinedigital.com).