Smart Email Discount Strategies: How to Increase Revenue & Profit

Many businesses make the mistake of offering the same discount to every subscriber. While this may seem fair, it can reduce profitability and leave money on the table. Instead, segmenting your audience and tailoring discount offers based on purchasing behavior allows you to:

• Maximize revenue without unnecessary discounts
• Protect profit margins by offering the right incentive to the right customer
• Convert non-buyers into first-time customers efficiently

Let’s break down how to strategically segment your email list and apply discounts that drive revenue without sacrificing profits.

1. Why You Shouldn’t Give Everyone the Same Discount

Are all your customers the same? Definitely not. Some have never purchased, while others buy frequently. If you send the same discount to everyone, you risk over-discounting those who would have purchased anyway, cutting into your profits.

Instead, align your discount strategy with customer behavior:

• New subscribers who haven’t purchased yet → Higher discount to encourage their first order
• Occasional buyers → Moderate discount to keep them engaged
• Loyal, repeat customers → Lower or no discount, since they already convert regularly

Pro Tip: A well-structured email marketing strategy can significantly increase engagement and conversions. For insights on tailoring your approach based on customer behavior, consider exploring strategies outlined in Ecommerce Email Strategy: The Ultimate Winning Strategies.

2. How to Segment Your Audience for Discounts

To increase profitability, segment your audience based on their engagement and purchase history. Here’s how you can approach it:

• Engaged Subscribers (last 90-120 days) who have NOT purchased:
  • Discount Strategy: Offer a discount code to encourage a first purchase.
• Recent Purchasers (last 30-90 days):
  • Discount Strategy: Provide a smaller discount or special loyalty offer.
• Frequent Buyers (3+ purchases total):
  • Discount Strategy: No discount necessary; instead, offer exclusive perks like early access or VIP content.

When you match your offers to customer behavior, you don’t just increase engagement—you maximize profits.

Example: Many businesses use advanced Klaviyo flows to automate audience segmentation and personalize email offers. For a deeper dive into setting up these flows, refer to Advanced Klaviyo Flows to Boost Your Email Marketing Strategy.

3. Real-World Example: Applying Discounts in an Email Campaign

Imagine you run an online store selling eco-friendly products. If you offer a 40% off sale to everyone, you might be cutting into your profits unnecessarily. Instead, you can segment your audience and adjust discounts accordingly:

• First-time buyers: 40% off (to encourage conversion)
• Occasional buyers: 20-30% off (enough to drive urgency but protect margins)
• Loyal repeat customers: 10-15% off (or an exclusive bonus instead of a discount)

This strategy drives conversions from new customers while ensuring that frequent buyers aren’t over-discounted.

4. How to Set Up Smart Discount Segmentation in Your Email Platform

Most email platforms (like Klaviyo, Mailchimp, or HubSpot) allow you to create audience segments based on customer behavior. Here’s how to structure it:

1. Create an “Engaged Non-Buyer” Segment → Includes subscribers who have opened an email, visited your website, or clicked a link in the past 90-120 days but have never purchased.
2. Create a “Recent Purchasers” Segment → Includes customers who made a purchase within the last 30-90 days.
3. Create a “Frequent Buyers” Segment → Includes customers who have made 3+ purchases in total.

Once segmented, you can send tailored discount emails that align with each group’s likelihood to purchase.

Want to go deeper? Discover expert insights on how to optimize your email campaigns and boost conversions in 15 Lead Nurture Campaign Examples: The Complete Guide.​

5. Why This Works: The Profitability Formula

If you apply the same discount across all customers, your revenue might look the same, but profit margins suffer. Instead, if you apply strategic segmentation:

• Customers who would have purchased anyway pay closer to full price
• New customers are incentivized to buy with a strong discount
• Total revenue remains strong while profitability increases

Example: If your average sale is $100 and you offer a 40% discount to everyone, you lose significant margin. But if you only offer 40% off to non-buyers while giving 10-20% to existing customers, you protect profits while still increasing conversions.

Conclusion: Smarter Discounts = Higher Profits

Discounting isn’t just about driving sales—it’s about maximizing revenue while protecting margins. By segmenting your audience, adjusting discount amounts based on customer behavior, and using email automation, you can:

• Increase first-time purchases with stronger incentives 
• Retain customers without unnecessary discounts 
• Keep profit margins high while still driving revenue growth

Ready to take a smarter approach to email marketing? Second Screen Digital partners with brands to implement data-driven strategies that convert — without cutting into profits.