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Why give customers credit instead of discounts?

Why WithWine encourages you to reward a customer's next purchase with credit, instead of discounting their first one.

WithWine is built to help you stop discounting. Instead of giving customers a discount on their first order, you give them credit to spend on their next one. This article explains why credit works better than discounts.

A discount rewards the first sale. Credit rewards the second sale.

A discount costs you money straight away, whether or not the customer ever buys from you again. If you give 20% off a first order and the customer never comes back, you've given away that 20% for nothing.

Credit works the other way around. The customer pays full price, so you keep 100 cents in the dollar. You then give them, say, 10 or 20 cents in the dollar back as credit to spend on their next order. If the customer comes back, the credit has helped you win a second sale. If the customer doesn't come back, you've kept the full price.

Credit does three jobs at once

  1. Credit encourages customers to spend more. Customers have a reason to spend a little more to earn credit, for example to reach a loyalty program tier.

  2. Credit gets you real contact details. Credit is attached to the customer's email address, so customers give you an email address they actually use. A discount on a first order tends to attract made-up email addresses.

  3. Credit brings customers back. Unspent credit gives the customer a reason to order from you again before the credit expires.

Credit expiry gives customers a reason to act

Credit you give away for free (manual credit and loyalty credit) can expire whenever you choose. WithWine emails the customer 3 days before their credit expires to remind them to use it.

Emails can end up in spam, so some wineries also ask customers for a phone number and call them before their credit expires. These calls are an easy way to make a sale, because the customer already has money to spend with you.

Gift cards are different. Customers pay for gift cards, so the law sets a minimum expiry period. See How long does credit last before it expires?.

How to find customers who have credit

On the Customers screen, you can filter for customers who have a credit balance, customers who earned credit in a period you choose, and customers who spent credit in a period you choose. Use these filters to plan follow-up emails or phone calls.

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