This guide will help you understand 

• What a Discount Purchase Behavior Funnel is
• Why you should use it
• How to create a Discount Purchase Behavior Funnel using Bloomreach Engagement

What a Discount Purchase Behavior Funnel is

There are various types of incentives you can use to persuade your customers to complete the action you need. Whether it is a purchase or subscription to your newsletter. Incentivizing your customers may increase a chance of conversion, but be careful, it is a double-edged sword. It may bring you the conversion you long for, however, the costs may not be worth the money expended. Although price reductions may be good motivation for your potential customers, it is questionable whether these buyers remain loyal. The chances are that customers attracted by discounts will fall into the “bargain hunters” category. This means that they are rather one-time buyers - bringing little value to the company from the long-term perspective. The only way to determine whether you can incentivize your customers loyalty by providing a reduction in price is by analyzing the Discount to Purchase Behavior Funnel. This funnel is derived from the repurchase funnel and allows you to effectively compare the conversion between the first and second purchase, depending on whether the customer's first order was incentivized by a discount or not.

Why you should use it

The Discount Purchase Behaviour Funnel will help you discover how many customers, who were incentivized to make their first purchase, completed the second, third, etc., purchase, compared to customers who paid the standard price. Based on this analysis, you can judge whether incentivizing customers to their first purchase is cost-effective (i.e. bringing you profit in the long run). You can form hypotheses on how to increase the conversion and then test them using this analysis.

Insights

From the funnel below, it is evident that the price reduction has little impact on the second purchase. If we look at the second column, the conversion of the non-incentivized customers is 25% compared to 28% of the incentivized customers. For this particular case, it seems that customer loyalty is not for sale, but you can still earn it using some of the Advised Solutions.

Advised Solutions

• Recommendations via email or on the website
• Email reactivation campaign

How to create a Discount Purchase Behavior Funnel using Bloomreach Engagement

Open Analysis > create a Funnel using the steps below.
Required components for the analysis are:

• event segmentation
• customer aggregate