Discounts, Offers, Loyalty, Cashback, Redeem Points: Complete Pricing Architecture – PART 1

People love offers, deals, discounts nothing matters what, when & how they are purchasing things, buying something online or at the Shopping mall. Just two things matter Product Quality & it’s pricing. Rather you will pay a full handy price for a product or you will check for offers or best deals. The main funda in an E-commerce business or Product marketing is pricing game which can be more interesting when you will play with Offers, Hot deals, Online sales, Discounts etc. Few Exciting lines to encourage shoppers:

  • 20% off on your first order (up to ₹600)
  • ₹100 off your order of ₹1,500
  • Prime customers get an extra 5% off their order
  • Get 15% off Cadbury Chocolates today from 5:00 PM till 5:15 PM
  • Get 50% off any medium pizza on your birthday
  • 40% off movie tickets every Sunday
  • Buy one denim shirt and get a second shirt half off
  • Free shipping on your order of ₹300 or more
  • 30% off your first 2 Levis Jeans
  • Get 70% cash back in your rewards wallet on your first electronics purchase of ₹800 or more
  • Refer a friend and get ₹40 in your Loyalty Cashback wallet when they place their first order with us
  • Redeem reward points (up to ₹75) when you book your next flight

If you look at the above-mentioned points, you will get a clear idea about offers, how they are created via several permutations of categories & ways.

It’s very needy for any retails or E-commerce business to have a great Pricing Model. To ease of pricing model development first thing we have to understand other constraints which are affecting pricing.

Ways How you get Best Pricing (Offers Type):
1.) Discounts/OFF:

Discounts are the best & instant benefitting pricing for Consumers. They are always looking for discounts first. It can be segregated in two main parts: Flat Discount, % Discount. In the terms of Architecture, we can incorporate Maximum Discount.

2.) Loyalty/Cashback:

This is also the same as Discount but people can use this cashback with a future purchase or they can transfer it to their account. This also can be segregated in two parts: Flat Cashback, % Cashback. Maximum Cashback is also a constraint. Cashback also can be direct to their Payment Option like Debit Card, Credit Card, Wallet or Bank account.

3.) Reward Points/Redeem Points:

This is not a commonly used word in E-commerce pricing Model. You were always hearing this word with your Debit Card/ Credit card or other Banking option. But for the Pricing Architecture design, it also a best-suited thing and People can have the best pricing for their purchase with Redeem or Reward points. People can convert these points to Cash or they can use this for a future purchase. Again the same constraint is Maximum Reward Points. These also can be in form of Flat Reward Gain or % Reward Gain.

4.) Free Gift or Free purchase:

Mostly used term in Retails is Buy One Get One or Buy Two and get a free product. This also affects pricing and must be incorporated in Pricing Model Design. In this constraint is Product/Gift Count and Shipping. This can be provided via 2-3 types like BOGO, Exchange etc.

5.) Shipping or delivery:

Last but not least, People also looks for Free delivery or Discounted delivery. This thing also must be there in your Pricing Model. There are many constraints with this like Delivery Location, Distance etc. In on doorstep shopping, this term is not worthy in the pricing model.

Offers Category:
1.) Direct Trade Offer

This is the most common discount type. It simply offers a reduction based on the original price, such as ₹100 off or 10% off. This reduction can be applied to a particular product, a product category, or an entire order. These offers can be shown directly to the product menu or Catalog.

2.) Promotional Offer

These Offers are given to promote a particular product or to promote the store itself or to promote any new feature in your web/mobile app. When you see “X discount on your first order with our mobile app” or “X rewards points for referring a friend”,  you are looking at a promotional discount.

3.) Quantity-Based Offer

Quantity based Offers encourage shoppers to increase their order value to a specific threshold. They are easy to spot: they offer an amount or percentage off your next order when you purchase a minimum amount of something or when your shopping total hits a certain amount.

4.) Premium Customers Offer

Sites may have customers pay a small amount to get a premium membership to their store. This gives them certain benefits, like members-only deals or free shipping. Amazon Prime is the best example of this type of discount

5.) Seasonal Offer

This discount is given on a particular occasion or season, such as the Diwali Offers, Deals of the day etc.

6.) Personalized/Exclusive Offer

These discounts are given to customers on a day unique to them, like their birthday or the anniversary of the day they signed up for a membership. Often, the offer details are sent to customers’ personal emails or phone numbers. These offers are only available to the specific customer for a defined period of time. Birthday Special Offer is an example of this Offer.

7.) Loyalty Offer

This is a kind of buyback offer, such as when a customer exchanges a used product for a new product by the same manufacturer. A small part of the new product price is waived to “reward” customers’ loyalty to the company. Mostly used to retain customers.

TECHNICAL DESIGN OF PRICING MODEL (OFFERS):

Above mentioned Offer Type & Offer Category are the base for any offer or Deal. An offer can have one or multiple Offer Type & Mostly a Single Offer Category. Offer can be a combo of multiple offer type, but best practices say not to combine multiple offer type in an offer.

Where to Apply Offers:

It totally depends upon business nature but in a technical term, we can make our offers flexible & more generic in tech terms. We can apply offer Direct on Product catalog, Cart, Add Money in case of Wallet, Customer Referral, Use of specific features or to perform a specific operation (Like play game and win a free product).

To be Continued…

I’m Dipendra, software developer, and designer who has written code in many of the language known to mankind.Passionate about Technology. In my free time, I love to write articles and build the code.

Leave a reply:

Your email address will not be published.

Site Footer