Coupon. Free download. Discount code. Gift card. Complimentary ebook.
These are just a few of the countless types of incentives marketers use to influence customers to say “yes” at the final macro-decision – whether that’s making a purchase, filling out a lead gen form or some other form of conversion.
Incentive can be just what some customers need to commit to an action you want them to take. But how can you ensure your incentive offers are having optimal effect on conversion?
Here are three tests you could use to optimize your incentive offers.
Incentive Test #1. Percentage off vs. Dollar amount off
This first test idea is definitely a numbers game.
What do customers see more value in: a percentage discount or a defined dollar amount discount? One case study from deep within the library of our sister site MarketingSherpa tested this question.
Evo, an online retailer of outdoor gear and fashion apparel, offered a coupon for certain product packages that had an average price of $333, and a minimum price of $250. With these numbers in mind, the team determined that $50 was the ideal discount point.
In addition to a traditional $50 off coupon, the team elected to test a 15% off coupon as well, which roughly equaled $50 off the average price of $333.
The test produced these results:
- The $50 off coupon produced a 72% higher conversion rate
- The $50 off coupon generated 170% more revenue than the 15% off coupon
It’s important to measure both conversion and overall revenue with this test. Even if one treatment results in more purchases, it may have lower average order amounts. If the average order amount is lower overall, the treatment with fewer orders of higher amounts could be your best choice moving forward.