There’s nothing like the word SALE! to get your blood pumping. Discounts are hard to resist and downright exciting. A recent survey found that as many as 80% of shoppers are willing to go out of their way for a deal, and a whopping 92% say they are always looking for a deal when they shop.
Limited time discounts give shoppers a sense of urgency and the opportunity to get in on a great deal.
It’s easy to see why shoppers love discounts, but sellers may not be so enthusiastic about knocking down their prices. A lot of businesses avoid offering discounts assuming that lowering their product price is giving money away. Interestingly, this is not the case. Discounts not only increase purchase volume at the discounted price but even at its regular price.
How do we know this?
Because data shows your discount campaign drives more attention to your product through the discount offered.
Data is Your Friend
As a software business, data is easily one of the most important things that your brand should rely on for its success. Data allows you to gain insight into how to form the best decisions and strategies to boost your sales, particularly when running a discount campaign.
Unfortunately, a lot of software sellers lack the sales data required to optimize their discount campaign strategies. They take gambles on what they should discount and how long they should discount it. It’s a guessing game and risky without reliable data since you need to consider losses in sales of your product discounted, which could have been sold for at its actual price.
Having detailed data would require a considerable amount of time and effort, which, unfortunately, most sellers don’t have. You’d have to have access to hundreds of other online sellers’ numbers and what their promotion results are to understand the bigger picture… the good news is that FastSpring has done all the hard work for you and created an essential guide to help you understand how to best plan, execute, and optimize promotional campaigns using real data from our full-service ecommerce platform.
5 Weeks is The Sweet Spot
FastSpring, who has access to thousands of companies selling software online, examined a collection of data gathered throughout a year. We can see when sellers get the most out of their promotions by analyzing millions of transactions.
Out of all of the transactions, data shows that sellers ran promotions varying from five weeks or less to nearly year-long periods. The first five weeks seem to be when sellers got the most out of their discount campaigns.
Surprisingly, after the promotional periods, there was an increase in software purchase volume even at its regular price, where there was an anticipated decline.
In this figure taken from the data collected in Fastspring Essential Guide to Effective Promotions, we can see the volume of software sold at regular price and added sales volume at the discount price. There was an increase in sales at the non-discounted price even during the promotional period.
Timing is Everything When Running a Discount Campaign
Although it may be tempting to run your discount campaign more often and longer than five weeks because of the boost of business, it’s better not to overdo it. The scarcity of a “super deal” is what makes it work so well.
In addition to the length of your sales campaign being an essential factor in the results you hope to yield, so is timing. Certain times of the year are more likely to bring in more sales. The fourth quarter of the year, the holiday season, is undoubtedly the most promising time of the year for software companies.
While it’s impossible to anticipate your discount campaign results, data can help you make the best guess. And the data will show that your promotional campaign’s timing plays a significant role in whether or not you see the results you’re hoping for. Eager to learn more about getting the most out of your next promotional campaign? We got you covered with our Essential Guide to Effective Online Software Promotions. Get your free copy today!