Promotions are a powerful but dangerous tool. A poorly designed promotion attracts “deal hunters” who will never return to the normal price. Here’s how to create smart promotions.
Free shipping is the most effective promotion. Shipping costs are the number one obstacle to orders. Offering it during off-peak hours (2 PM - 5 PM) boosts volume without cannibalizing peak times.
Percentage discounts are more attractive than fixed amounts for small baskets, and vice versa for large baskets. “-20%” works better than “-3 EUR” on a 12 EUR dish.
“Buy X, get Y” offers increase the average basket: “For 2 burgers purchased, the 3rd is free.” The food cost of the 3rd burger is minimal and the customer has ordered 3 dishes instead of 1.
Limit your promotions in time (maximum 7 days) and in frequency (no more than one per month). Permanent promotions become the new reference price and no longer generate interest.
Measure the ROI of each promotion: how many additional orders did it generate? What is the cost of the discount? How many customers purchased at the regular price? Only profitable promotions are worth repeating.
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