It sounds pretty simple: by discounting your products, you’re more likely to increase your sales. Specifically, you will attract more new customers. If you offer products that are identical or similar to a competitor's, but at a slightly lower price, this helps new customers use price as a deciding factor. But keep in mind that attracting customers that are only looking for discounted products might take a toll on your customer's LTV. So let's take a look at your Discounts!
Definitions
But before you dive into data analysis, let's ensure that we are on the same page with some definitions:
Date |
Time of purchase |
Discount |
Sum of discounts granted |
Discount Percentage |
Percentage of discounts over total Gross Revenue |
For the discount percentage calculation, if you choose your gross revenue calculation to exclude discounts, then RetentionX will automatically make an adjustment and include discounts for the gross revenue only for this report. Then, discount percentage will be calculated as follows:
The discounts are shown as a color-coded column chart followed by absolute figures. Trends get even more clear by the growth rate comparing each data point with the previous period.
For running observation periods that have not yet been completed, e.g. the current week or month, RX extrapolates the run rate based on the historical data.
Use Cases
This report provides you with an overview of your discounts: it is important to know how much revenue you are leaving on the table because of discounts and to understand the percentage of your overall revenue that they represent.
If you have a high percentage of revenue going away in discounts, then it can be a bad sign regarding the quality of customers that you are acquiring.
What You Need
- Order ID
- Order Date
- Stock Keeping Unit (SKU)
- Items Sold
- Item Price
- Discounts
- Customer ID
- VAT
- Shipping Revenue
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