Small Business Markets

Discounts are a hammer that makes every problem in the business look like a nail. Businesses look at challenges like: - Excess inventory - Mediocre products - Low CLTV - Poor retention …and slap on the discount duct tape. The end result? Weak margin. A cheapened brand. And consumers who are conditioned to only buy from you if they get a hefty discount. We help retailers shift from one-size-fits-all discounts to targeted, efficient incentives. The exact playbook varies a lot by brand, but the approach needs to be both Technological (granular data in promo rules, and a wide range of incentive types) and Organizational (measuring marketers on margin & profit, and setting guardrails for offers). Some sample tactics include… 1️⃣ Shift to buy-more-save-more and bundle offers 2️⃣ Use 'challenges' for customers to work towards specific incentives 3️⃣ Require data capture (form, survey, preference center) to get a deal 4️⃣ Scope offers to specific SKU parameters, not entire categories 5️⃣ Don't show discounts too early or to high-propensity customers 6️⃣ Ensure marketers can use all customer, cart, and SKU data in offer rules 7️⃣ Make more offers 'final' (no returns on attractive deals) 8️⃣ Communicate non-discount value on item level (bonus points, gift with purchase) 9️⃣ Shift value prop to experiences & exclusivity with known users 🔟 Optimize promotions & loyalty program to get to break-even (e.g. 5th purchase, not 1st) But the goal is almost always to discount LESS, and to ensure that the remaining discounts are extremely efficient & targeted. Here are a few examples of what this discount discipline has meant for Talon.One customers: → Ecommerce company ($300m revenue) that decreased discount spend by 20% by switching to personalized coupon wallet → Clothing retailer ($1 Bn revenue) that increased promotions margin by 7.7% with shift to ‘buy more, save more’ playbook → Grocery delivery ($100m revenue) that decreased acquisition spend by 50% while ‘exiting’ customers who only buy with a hefty deal Is your business discounting itself to death? Send me a DM; happy to brainstorm ways to break the cycle.

Are discounts hurting your brand’s image, and performance? Before you start tossing around discounts just to get customers to buy, take a step back. Are you building a discount brand, or do you want to retain that premium image? I often see brands “train” their customers to only shop with them during heavy discount periods. This is NOT a winning strategy. Often times this dilutes margins and pulls revenue forward at the expense of predictable and stable 30/60/90 days sales. You also attract a different type of buyer (discount shopper), who usually has lower CLV and churns faster. Here’s how to get creative with your offers without slashing prices: 1. Test the Wording Instead of defaulting to percentage discounts, experiment with more strategic language in your offers. For example, if you’re a subscription business, try a "double hit" offer, where customers can bundle two subscriptions to save on shipping or receive a slight added value. This approach keeps the offer compelling without lowering your brand’s perceived value. Wording like “Double Your Order, Save on Shipping” gives the feel of an exclusive offer while still protecting margins. 2. Offer Freebies Instead For premium brands, offering a freebie can be far more powerful than offering discounts. At MANSSION, for example, free ring sizers are provided with each purchase, which adds value without devaluing the product. This approach makes customers feel they’re getting something special and unexpected. This tactic works especially well for building brand loyalty, as customers associate the “extra” with your brand’s generosity. 3. Escalate Offers for Retention Rather than immediately offering a discount to customers who haven’t repurchased, consider using a tiered incentive system. Start with a small offer, like free shipping or a minor add-on, and gradually escalate only if they remain inactive. This gives you a retention lever without conditioning customers to expect discounts right away. It also preserves the brand’s premium positioning, rewarding patience with stronger offers over time. 4. Focus on Value, Not Price Instead of simply lowering prices, focus on delivering additional value. Consider bundling products at a slightly reduced price, offering loyalty program perks, or providing exclusive early access to new products. The goal is to give customers a reason to keep buying from you without eroding your brand image. When value is defined by unique experiences or exclusive access, customers perceive your brand as generous and premium—not discounted. Key Takeaway: You don’t have to race to the bottom with discounts. A well-thought-out offer that preserves your brand’s integrity is far more powerful. Remember: Value > Price.

Most DTC turnovers that I’ve taken over look at discounts totally wrong. More often than not they are shooting themselves in the foot when they employ discounts. Here’s the brutal math of pricing strategy that most brands never embrace: The raw truth: A 20% discount isn't just 20% off your revenue. For a brand with 50% gross margin, you're SLASHING profits by 40%. They are a straight hit to margin. So use them smartly. Here’s my playbook: 1️⃣ Customer Segmentation is King Treat different customers differently. Many customers arrive on your site, ready to buy, and immediately see a 20% off splash page. Of course they take it. But they would have bought anyway at full margin. How do you know who these are? Try exit-intent popups or promos like “enter to win” vs. a straight-up discount. (At Karmaloop this generated 100s of thousands in short term margin). 2️⃣ Build a Discount Ladder • 10% for recent customers • Sliding scale up to 30% for inactive buyers You’ll sync the offer with the likelihood of purchase. 3️⃣ Consider alternatives to the flat-out discount. Get creative with higher-margin incentives: • Gift with purchase • Store credit • Exclusive product drops • Tiered spend incentives • Free shipping upgrades These all worked at Karmaloop, oVertone, and AutoAnything. Start here before you spray and pray. Follow my LinkedIn for more turnaround ideas like these.

Cult-favorite apparel brand Dôen's hitting $100M revenue by breaking ecommerce "rules”. Follow up to yesterday's post, with a focus on HOW. Traditional ecommerce "wisdom" says you need: ↳ Constant sales and promotions ↳ Never let anything sell out ↳ Deep inventory on everything ↳ Endless newness ↳ Cookie cutter "predictable" design Here's how DÔEN follows their own path: 1. Ditch the discount addiction ↳ Only 3 sales per year (Mother's Day, BFCM, warehouse clear-out) ↳ Train customers to buy full-price or miss out 2. Embrace scarcity (for real) ↳ Let products sell out intentionally ↳ Use waitlists as demand signals ↳ Limited restocks create genuine FOMO 3. Lean inventory, fat margins ↳ Test small quantities, reorder winners ↳ Use restock sign-ups to guide future buys ↳ Let sellouts inform product development 4. Organic > paid every time ↳ Spend only 5% of revenue on marketing (industry average: 10-25%) ↳ Focus on community-building and strategic gifting ↳ Let word-of-mouth do the heavy lifting 5. Iterate on winners, don't chase trends ↳ Example: Sebastiane skirt spawned plaid, lace, and pants versions ↳ Each variation guaranteed to sell (original was proven) 6. Stay true to brand aesthetic and vision ↳ Never afraid to create brand-specific page layouts and design ↳ Focus on storytelling through site The result? 40% YoY growth and $100M+ projected for 2025. ♻️ Repost to help and inspire other ecomm founders breaking the rules!

If your plan this weekend is to blast 3-4 disconnected promotions in the next few days, STOP and rethink your approach. Let me explain. Here's what most brands do: Thursday: "NATIONAL DONUT DAY SALE!" Friday: "FREE SHIPPING SALE!" Sunday: "FLASH SALE!" Monday: "20% OFF PANTS!" Your customers and prospects? They're drowning in discount fatigue. Try this instead: Create a cohesive event, not random promotions: Thursday: "Announcing our Biggest Clearance Event (Early Access Tomorrow)" Friday: "The Clearance Event is LIVE" Sunday: "Clearance Event Update: Top sellers almost gone" Monday: "Final Hours: Clearance Event Ends Tonight" But the real magic isn't just in connected messaging. It's also in strategic audience narrowing - here's an example: Send 1: 120-day engaged + all purchasers (cast wide net) Send 2: 60-day engaged + clicked previous email (tighten focus) Send 3: 30-day engaged + didn't purchase yet (target the interested) Send 4: Engaged with previous emails but haven't purchased (final push) Then segment further by: First-time buyers vs. repeat customers Price-sensitive vs. premium shoppers Category preferences And layer in SMS for high-intent signals, less batch and blast. Only text people who clicked but didn't purchase Or for time sensitive messages: Final "hours left" reminder From my experience, this approach doubled the average click-through rate and revenues. Stop treating each promotion as an isolated discount. Start creating a narrative that builds anticipation and focuses on your most engaged audiences. Leverage the power of event marketing in email and sms. Real strategy will increase your revenue. What's your go to for your email and sms marketing strategy?

Last week, I spoke with a VP of Merchandising from a large brand. They shared their struggle with increasing average transaction value 💰 Their strategy: Daily sales report analysis to craft promotions and bundles. The goal? Boost transaction value. The result: Smaller purchases, no significant progress 😮 My advice: Dive deeper. Beyond conventional tactics, explore seasonal patterns, basket analysis. Differentiate. Here's the reality 👇 - 2023 has shifted consumer spending habits - Overused discounts are losing impact - Traditional strategies are outdated - Promotions matter, but they're not the complete answer It's time for a new playbook in fashion retail 📕 1. Get Smart with Stock: Look at what sells best in combinations with other articles. Ensure your stores carry these gems in sizes that combine well with other assortment. This way, you are not just selling single items, you are increasing overall transaction value. 2. Match Winners with Demand: Focus on the combos and sizes people love the most. Plan these assortment mixes according to the stores’ demand. Your goal is to have these ready and waiting in the stores that need them. 3. Fill the Gaps Creatively: If some stores are missing combos, get creative. Introduce combinations that not only fill the space but also make you more money where there's a real want for them. We're talking high-margin, demand-driven combinations. Pro Tip When customers can't find what they're looking for within their budget, let's turn that moment into an opportunity. Offer them an exclusive, one-time discount on a higher-priced combo. This strategy not only moves our overstocked, high-margin items but also keeps our profit margin healthy. It's a win-win: customers feel valued with a deal just for them, and we increase the sale's value. Manual methods can't keep pace with today's demands, but the right technology can transform challenges into opportunities. Leverage data, automation, and customer insights for a real change.

Practical tip you can implement in five minutes ---> Do you sit over your product designs for days and spin your office chair around when you get it just right? If the answer is "Yes, I love creating my products," (even if you're not so dramatic about it 😁) your customers need to know this. Because - get this - people spend more money on something if you enjoy making it. Honest. In a recent article, consumer psychology expert Nick Kolenda cites a study which showed clear evidence of this. Evidence as in a 40% increase on click-through rates in ads. Why? Nick gave several reasons, but here's how I see it. It's the cook vs. chef effect, something Andre Chaperon of Tiny Digital Worlds talks about. A cook works in a takeout place or a school kitchen. A chef runs the kitchen in a high-end restaurant or hotel. Who hires a cook, or goes to an establishment that employs cooks? People who don't want to spend a lot of money on their food, like lower-income families or schools with tight budgets. Who pays for food from a chef? People with the funds to invest in food as an art, like high-net-worth individuals and luxury hotels. If you market yourself as a cook, you're going to get cook-level customers; people looking for a good enough product to get the job done, who will move on tomorrow when your competitor runs a sale. If you market yourself as a chef, though, you’re going to get chef-level customers; people who really appreciate your product and your company and are willing to pay for the perceived higher value. The best part? This strategy is so under used. Hardly any brands consistently show their enjoyment in creating a product. In recent memory, there is ONE small brand I've come across that does this all the time. Impact Fashion, a size inclusive modest fashion brand. You can feel the joy the founder, Rivky, takes in every newly designed dress, and it's expressed in each product description and most of her emails. Result? She charges premium prices for her dresses. And usually sells out fast. As for you - here is the single, small action you can take today to show potential customers how much you enjoy creating your products: 1) Think of a product in your inventory that you are very excited about 2) Write one line that describes why you chose to create it (or why you chose to carry it in your store.) 3) Put that line into the product description or an ad or email featuring that product Do it every day with a different product. And watch what happens. Which product will you do this with? Drop it in the comments!