6 Tiered Discounts Examples You Can Copy to Drive Up AOV
Running a standard X% discount? Tiered discounts could be a great alternative to boost order values—especially during time-limited offers and flash sales. Here's a look at some of the best tiered discount examples out there.
Most ecommerce brands rely on one-dimensional, flat discounts as a crutch. The end result is that most shoppers use the discount code to buy one product that they might have been planning to buy anyway without the code.
A better strategy if your brand is reliant on discounting is to use tiered discounts.
Tiered discounts encourage shoppers to buy more than one product by giving bigger discounts as they spend more. In turn, this increases your average order value (AOV).
In this post, we’re sharing how tiered discounts work, some best practices, and six examples to inspire you.
What are tiered discounts?
Tiered discounts are a tactic in which products are sold within a particular price range, and customers receive larger discounts based on hitting pre-defined spending thresholds. The more a customer spends, the greater the discount.
On Cyber Monday (and for all of Cyber Week), a great tiered promotional sale has never failed me.
If your AOV is $40, I would run:
Get 10% off $49+ Get 20% off $99+ Get 30% off $199+
Your AOV will blow up. Optimize the sale for a UPT that is friendly to your 3PL.
By promising to slash the final cost with each product purchased, this pricing strategy encourages consumers to include a larger quantity of products (or a few higher ticket items) with each order placed.
Not only will this strategy help to increase sales and average order value, but the shipping and packaging of products in bulk also enable merchants to reduce per-unit and inventory costs. In other words, tiered discounts provide a much-needed edge in a competitive market.
Bear in mind:
Tiered discounts are a separate pricing strategy from volume pricing. Volume pricing offers discounts based purely on the number of items sold at a time (like buy three, get one free), whereas tiered discounts require shoppers to spend up to a certain threshold for savings.
With this in mind, here are some tiered discount best practices.
Tiered discounts best practices
Keep it simple. A customer should be able to under your offer and tiered discount structure within 3 seconds. If there is any complex logic or math involved, most people will just shop elsewhere.
Match spend with typical AOVs. If your AOV is $25, your discount spending tiers should reflect that and not start at $250. In the Tweet shared above, Nik Sharma recommends starting at $49 if your AOV is $40—you can see more on this here.
Guide shoppers to the next tier. You can do this either via dynamic text or visualized in a progress bar or other widget. This is a win-win for everyone since customers will get a bigger discount and you’ll get more revenue. Note: you can set this up on your landing pages using ConvertFlow’s progress bar feature.
Be smart about your discounting strategy. Rule number one: Your tiered discounting strategy should make you more money, not lose money. This means knowing your numbers, what products are best-sellers, and what products aren’t selling through as fast.
Don’t damage your brand’s reputation. Your most loyal customers will remember your past offers. And if new tiered discounts stray too far away from that, it might damage your brand’s reputation.
6 tiered discount examples
Take a look at these six examples of brands using tiered discounts to increase their average order value.
1. Eddie Bauer’s fall season tiered discounts example
Eddie Bauer is a retailer of apparel, footwear, and outdoor gear for the entire family. This email advertisement from the brand is for limited-time, online-only tiered discounts focused on fall outerwear, such as flannels, sweaters, and coats:
Consumers can spend:
$100 for a $20 discount
$125 for a $30 discount
$150 for a $50 discount
The main tiers in this discount are the specified price ranges. However, text at the top of the email points out that members already receive free shipping on orders above $50.
If a consumer were to access the $20 off $100, they would be accessing two tiers of the discount. To make it easy to spend as much as possible, the brand has placed convenient categories right below the discount offer.
2. Francesca’s “party edition” tiered discount
Francesca’s is a popular women’s clothing boutique that uses tiered discounts to highlight upcoming seasonal and holiday promotions, such as the above Party Edition sale:
Like Eddie Bauer, Francesca’s offers shoppers free standard shipping on all orders over a specified price—in this case, $65. Shoppers of the online-only Party Edition sale also receive 40% off on orders of $100 and 50% off on orders of $150, which even applies to clearance items.
If a shopper were to select one $100 item, the order could not qualify for free shipping with the 40% discount.
This then incentivizes shoppers to access the second discount tier for greater savings. Therefore, increasing the average order value and moving more units with each sale.
3. Thrive Causemetics’ “spend more, save more” tiered discount
Thrive Causemetics is known as an ecommerce cosmetics brand for good, donating to disenfranchised communities for every product purchased. As such, the more products Thrive Causemetics sells, the more they can give back to nonprofit organizations across the country.
One way the brand encourages new online sales is with “spend more, save more” discount tiers. Through the code SWEETDEAL, Thrive offers:
$5 off $75 orders
$10 off $100 orders
$15 off $125 orders
These discount tiers account for multiple budgets. So, each individual shopper can receive the appropriate savings at the price point most comfortable for them.
4. Dick’s Sporting Goods’ rewards program tiered discount
While Dick’s Sporting Goods does offer tiered discounts, what’s more notable is how consumers receive rewards.
The brand has an exclusive rewards program known as the ScoreCard:
This recent online advertisement from the brand includes:
An additional 20% off select clearance apparel
An additional 10% off select clearance footwear
But, there’s extra bonuses layered on for ScoreCard members. They’ll receive 150 bonus points on purchases of $75 or more and 300 bonus points on purchases of $150 or more.
5. Zales’ percentage-based tiered discount example
Zales uses a percentage-based tiered discount. Advertisements from the brand feature a buy more, save more promotion of:
25% off purchases of $4,000 or more
20% off purchases of $1,500 to $3,999
15% off purchases up to $1,499
One interesting feature of Zales’ percentage-based tiered discount is that the savings are only applied once a shopper adds the product to their bag.
While this doesn’t necessarily guarantee a purchase, it does incentivize shoppers to actively add products for purchase just to learn the price.
6. H&M’s select styles tiered discount example
Fast-fashion retailer H&M uses tiered discounts with an initial tier of up to 20% off select styles sitewide:
Keeping your discount to a specific style or category is a good way to drive more sales for products that are slower to move off the shelf.
The next tiers are dictated by price range, starting with 15% off $60 orders, then 20% off $80 orders, and finally 25% off $100 orders. All discount tiers include free shipping.
How to offer tiered discounts on Shopify
While your offer on the frontend should be simple to understand, there is a lot of complexity on the backend to get your tiered discounts to work properly.
Jessica is a copywriter and content strategist with over 10 years' experience in SaaS marketing. Her work has appeared on industry-leading websites like Social Media Examiner, SEMRush, CMX, The Next Web, Databox, Help Scout, Convince & Convert, and more. When she's not writing something epic, you'll usually find her watching Master Chef or schooling people on 90s pop culture trivia.
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