The Hypothesis
Retailers should stop offering discounts to people who show all the signals of buying.
It’s no secret that discounting heavily or even just regularly impacts your brand equity, as well as your bottom line. But it’s not all bad, of course. There’s no doubt discounting works. Not if all you’re looking to do is speed up a sale, or tempt a buyer who may walk away otherwise.Â
It’s just that, without understanding customer intent, providing discounts universally means you risk offering incentives to those who don’t need them to convert. Put another way, offering discounts to people who would have bought anyway erodes your margin with no upside.
So we propose that not showing pricing incentives to people who show all the signals of buying will not only protect margin, but not even harm conversion rate. For most retailers, it’d be better for discounts to be spared for break-glass moments.
The Tech You’ll Need
- An onsite discounting mechanism, whether a third-party tool like Talon One or an in-house system
- The şÚÁĎ´óĘÂĽÇ platform or another way to connect intent-based segments to your onsite discounting solution
This combination will let you exclude visitors with peak or currently high intent from discount offers. It will also let you target those with dipping intent, especially if they are unlikely to come back to your site.
Setting this up
Here’s how you can set this play up in the şÚÁĎ´óĘÂĽÇ platform—excluding other segments from a discount experience intended for Struggling Buyers.
The Target Segments
For this margin protection play, the focus should be on customer segments in the final stages of the purchase journey. Referring to our intent-based segmentation framework, these would be the highest priority segments to exclude from discounts.
Focused Shoppers / Focused Committers
Focused Shoppers are on the cusp of conversion, are progressing nicely and are making their final decision(s) before moving to checkout.
All signals suggest they will make their way to a purchase without incentive, so…leave them to it. Maintain their intent by responding to it appropriately but don’t reduce your margin because it doesn’t look like you need to.
Focused Committers are even closer to converting. They’ve made their decisions, are most likely in the basket and continue to move towards a purchase. No need for a discount.
Meanwhile, here are two segments that would be perfect targets for onsite discounting:
Struggling Buyers
Struggling Buyers are customers who are likely on the checkout who are showing struggle behaviours. They’ve previously showed signs of buying, but aren’t checking out smoothly.
There are many reasons why this could be, one of which is discount related. If you’re sure your checkout is working as intended and not adding too much friction, consider if customers in this segment are regularly checking discount codes. If so, a considered discount may be just what’s needed to secure the stalled checkout.
Last Chancers
Last Chancers are site visitors who have demonstrated purchase intent, but are now expected to abandon while also being unlikely to return.
As this is likely one of the last chances you have to persuade these customers; think about appropriate messaging that can be used to reduce their likelihood of exiting. If there isn’t a common objection, value reminder or other deal you can offer to secure the purchase, it may be worth considering a discount. Remember, this is probably your last-ditch attempt to keep them and persuade them to convert on this purchase cycle.
The Impact
“Our discount strategy is reliant on şÚÁĎ´óĘÂĽÇ and we've seen margin enhancement improvements of over 10% as a result."
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‍Jay Shufflebottom, Trading Manager, Buy It Direct Group
How Ernest Jones Used Intent Segmentation to Discount Strategically and Achieve an ROI of 24:1
The Ernest Jones trading team initially used standardised triggering mechanisms (e.g., exit intent, time delay) to push pricing incentives, exposing more customers to discounts and reducing total sales margin.
By leveraging intent segments alongside Bloomreach customer data, they identified high-opportunity segments called “last chancers”—users with high intent but a low likelihood of returning who are predicted to exit soon.
The team at Ernest Jones used this by offering a 10% off discount code only to customers matching the segment criteria and the negative, expected behaviours.
This strategy increased the segment conversion rate by +20.5%, with over 85% of orders in the variant containing the provided voucher code. It also created an attributed ROI of 24:1.
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Strategic discounting based on customer intent helps to protect margin and effectively convert hesitant, high-risk customers. Doing so ensures discounts are given only when necessary, maximising both revenue and profitability.
But this is just a single play from our intent-based playbook. Why not explore how şÚÁĎ´óĘÂĽÇ can help you respond to intent in-session?
