Intent-based discounting: How to convert more customers without sacrificing margins

The discount dilemma every retailer faces

Offers aren't new. For over 150 years, retailers have used incentives to boost sales, from metal tokens to paper vouchers to digital codes.

But the basic approach hasn't changed much: broad promotions that boost sales but hurt margins.

Every discount is profit you can't bank. Widespread discounting trains customers to wait for sales, damaging brand equity. We've all been there—adding items to a cart, abandoning it, and waiting for that sweet discount email to arrive.

Yet offers remain essential. Our research with IMRG found that promotions deliver:

• More than half of revenue
• Almost half of items sold
• More than half of all transactions

Even more telling: discounted products averaged £14 higher prices than non-discounted items.

So, discounts work. But there is a better way to implement them.

Why traditional discounting fails

Most eCommerce businesses discount too early, too frequently, and to too many people. The classic approach has three fundamental flaws:

Timing issues: Showing offers too early, before shoppers have shown genuine interest, trains them to expect discounts from the start.

Targeting problems: Blanket discounts reach everyone, including those who would have purchased at full price.

Margin erosion: When you give everyone a discount, you're unnecessarily giving away profit on many transactions.

The problem isn't discounting itself—it's the lack of precision. You wouldn't water your garden with a fire hose, so why discount that way?

The intent solution: Precision discounting

Intent-based discounting means showing offers only to customers who need them, precisely when they need them.

Think of it as precision medicine instead of blanket antibiotics. You're treating only the customers who need intervention, not everyone who walks through your door.

The results? Higher margins, better conversion rates, and healthier customer relationships.

Identifying who actually needs your discounts

The key is to categorize shoppers by their behavior patterns. Some deserve discounts. Most don't.

Worth discounting:

1. Cart abandoners are about to leave your site
2. Product browsers showing clear hesitation signals
3. Price-checking comparison shoppers (those who copy product titles or toggle between tabs)

Not worth discounting:

1. First-time browsers are still exploring your catalog
2. Focused buyers showing strong purchase intent

The key is tracking real behavior, not making assumptions based on arbitrary rules like "show a popup after 30 seconds."

Approach 1: Exit-intent targeting for abandoners

Most retailers show discount pop-ups based on timers or page views. That's guesswork, not strategy.

Instead, wait for clear exit signals from high-intent visitors. Only then trigger an offer.

When Radley London implemented this approach with RevLifter, they saved a significant margin while maintaining conversion rates. Why this works:

• These shoppers were already interested, but something blocked the purchase
• The timing felt helpful rather than manipulative
• The experience stayed seamless with no email required

Saving a sale in real-time is always more effective than hoping an abandoner will open your "We miss you!" email tomorrow.

Approach 2: Hesitation intervention for strugglers

Some shoppers don't need to leave to show they're struggling. Their on-site behavior tells the story.

Signals of purchase hesitation include:

• Multiple views of the same product
• Repeated scrolling to price or shipping information
• Extended time spent on return policies
• Toggling between similar products

When you detect these signals, a gentle nudge often differentiates between abandonment and purchase.

The difference? Timing and relevance. You're not treating every visitor the same, but responding to actual behavior.

Beyond basic targeting: Personalized offer depth

Once you've mastered timing, the next step is personalizing the offer.

RevLifter's platform tracks affinities to products, categories, and price points based on browsing patterns. This allows for tailoring offers to both customer interests and your margins.

For example:

• Offer smaller discounts on low-margin products
• Provide free shipping instead of percentage discounts on high-value items
• Use copy that references specific products viewed ("Still thinking about those headphones?")
• Adjust offer depth based on potential customer value

The advantage isn't from discounting more, but from discounting smarter.

The measurable benefits of intent-based discounting

When properly implemented, intent-based discounting delivers:

1. Higher margins: You're not discounting to people who would buy anyway
2. Better conversion rates: The right people get the right nudges at the right time
3. Increased average order value: Targeted offers can encourage additional purchases
4. Healthier customer relationships: No discount addiction or training customers to wait for sales

You're not necessarily giving fewer discounts. You're giving smarter ones that benefit your customers and your bottom line.

Implementing intent-based discounting: Three steps to start now

1. Replace time-based pop-ups with behavior-triggered offers. Stop showing discounts after arbitrary periods; start showing them based on purchase intent and hesitation signals.
2. Target abandoning visitors with on-site interventions. Don't wait for email campaigns; catch them before they leave.
3. Develop specific approaches for different types of hesitation. Price sensitivity, shipping concerns, and product uncertainty each require different interventions.

Remember: Most retailers discount too early, too often, and to too many people. The fix isn't more codes—it's smarter targeting.