Struggling to get customers to add more to their cart without sounding pushy? Tiered discounts might be exactly what you need. It’s not just about boosting sales — it’s about giving shoppers a reason to spend a little more while feeling like they’re getting a great deal. Do you know about tiered discounts meaning and tiered discount structure?
Here’s the thing: a lot of businesses hit a wall when trying to increase their average order value without making things overly complicated. Tiered discounts make it easy: spend more, save more. It’s a win-win because people love feeling like they’re getting something extra.
In this guide, we’ll break down what is tiered discount, how it works and tiered discount examples.
Tiered Discounts - What Are They?
What is a tiered discount? It’s a simple yet effective strategy: the bigger the purchase, the bigger the discount. There are various types of discounts in marketing, and this is just one example of how a strategic approach can boost sales. It’s all about creating that "just one more" mentality—By setting spending thresholds, you motivate customers to add just a few more items to their cart to unlock a higher discount.
Psychologically, this approach leverages the Endowed Progress Effect. Once customers feel like they’re making progress towards a goal (like hitting the next discount tier), they’re more likely to finish the task. The result? The more they buy, the more they save—and everyone walks away happy.
How to Implement Tiered Discount Structure: Step-by-Step
Getting tiered discounts right is like baking a cake—stick to the recipe, and you’ll create something sweet for everyone. Here’s how to craft a winning strategy:
Set Clear Tiers (and Keep it Simple)
First things first: you need to set up spending or quantity thresholds where the discount grows as the customer buys more. Here’s a simple example of a tiered discount structure:
- Spend $50, get 10% off
- Spend $100, get 15% off
- Spend $150, get 20% off
The idea is to tempt customers to stretch their spending just enough to hit the next discount tier. Don't go too complicated, though. You don't want your customers scratching their heads and doing mental math just to figure out if the discount is worth it.
Pro Tip: Keep your tiers clear and achievable based on your customer's average order size. If they usually spend $60, set your first tier at $75—just enough to nudge them higher.
When setting up tiers, keep in mind strategies like those used during major shopping events like BFCM pricing strategies.
Choose the Right Products or Services
Applying tiered discounts to your entire inventory might seem tempting, but resist that urge. Target specific products, such as best-sellers or slow-moving items that need a push. If you're a service-based business, you can structure discounts around service levels or subscription lengths:
- Monthly plans: 10% off
- Annual plans: 20% off
- Multi-year plans: 30% off
Pro Tip: Keep an eye on your profit margins—offering steep discounts across the board can eat into your profits faster than you think.
We recommend reading "What is Volume Discounts?" to learn more about the differences between volume discounts and tiered discounts, and decide which is best for your business.
Automate the Process (So You're Not Doing All the Math)
Trust me, managing tiered discounts manually is a headache you don't need. Automation tools simplify the process, handling everything from applying discounts to tracking results. One option to consider is Discounty, which makes setting up tiers effortless.
Using an automated tool like Discounty not only saves time but also ensures accurate application of discounts. Learn more about the benefits of using automatic discounts and how they can increase conversion rates.
Pro Tip: Use a progress bar on your site to show customers how close they are to the following discount tier. People love to see that little visual reminder of how much more they need to spend to unlock bigger savings.
Want to see how to set up automated tiered discounts step-by-step? Here’s a guide that shows you how to do it effortlessly with the Discounty app.
Promote the Discounts Clearly
Your discounts won't drive sales if no one knows about them. Highlight the tiered discount structure in your email marketing, on product pages, and with on-site pop-ups.
While promoting your tiered discounts through email marketing and pop-ups, consider using seasonal themes like Halloween to grab customer attention and boost engagement. If you’re looking for inspiration, check out our Halloween marketing ideas for Shopify stores to make your promotions stand out.
Example: Use clear calls to action like "Spend $50 more and unlock 20% off your total purchase!" You could even run limited-time offers to create urgency.
Pro Tip: Make sure the discount tiers are apparent, both on desktop and mobile. If people can't figure out how much more to spend to get a better deal, you risk losing them.
Track Performance and Adjust as Needed
Once your tiered discount strategy is live, keep an eye on the data. Are customers consistently hitting your top tier, or are they stopping short? If they're not reaching the highest discount levels, consider adjusting the tiers. Maybe that top discount of 20% at $200 is a bit too steep for your customer base—try lowering it to $150. Analyzing the data will help you understand what works best, and it’s important to differentiate between general promotions and specific discounts. For more clarity, read our guide on the difference between promotion and discount to fine-tune your approach.
Pro Tip: Use the analytics provided by Discounty to track which tiers are working best and adjust accordingly to optimize your strategy.
The Benefits of Tiered Discounts: Why They're a Game-Changer
Tiered discounts come with plenty of advantages, but perhaps the biggest one is motivating each customer to increase their spending. Let’s explore how these discounts can help elevate your average order value.
Build Loyalty (Without a Loyalty Program)
Customers love feeling like they're getting a deal, and tiered discounts make them feel like they're winning. Combine these discounts with a loyalty program, and you've got a recipe for repeat business. Many brands, like Sephora, use tiered discounts to recognize their most loyal customers, ensuring they return again and again.
Create a Sense of Urgency
A time-sensitive offer can be incredibly compelling, especially when combined with tiered discounts. Announcing that your customers only have a couple of days to secure the next discount can definitely encourage them to spend more (and sooner).
Pro Tip: Adding a countdown timer or highlighting a limited-time promotion can significantly increase conversions.
Boost Your Average Order Value (AOV)
Tiered discounts increase AOV by getting customers to spend more. Think of it like this: You’re at your favorite cafe, and you figure, "Why not go for the large latte instead of the regular, it's just a little extra?" The goal is to get customers to spend on the next level without making them feel like they are overspending.
Personalization Through Data Collection
Every tiered discount transaction gives you valuable data on customer behaviour. Over time, you can use this information to personalize future offers and tailor discounts to individual spending habits. For example, suppose customers often stop just short of the $150 tier. In that case, you can target them with a special offer to nudge them over the line.
Inventory Management Made Easy
Tiered discounts aren't just about increasing sales—they're also great for managing stock. Have a bunch of last season's clothes still sitting around? Offer tiered discounts on them to clear inventory and make room for new products, all while maintaining decent margins.
Pro Tip: Use tiered discounts strategically to avoid getting stuck with overstock.
When to Offer Tiered Discounts (and When to Hold Off)
Tiered discounts can be a great way to boost sales, but they’re not always the best solution. Knowing when to use them—and when to hold off—can make all the difference in maximizing your profits.
Seasonal Sales
Tiered discounts shine during high-traffic sales events like Black Friday, Cyber Monday, or back-to-school shopping sprees. People are already ready to spend, so giving them an extra incentive to reach the next discount tier can lead to bigger orders.
(Do you know Shopify apps for black Friday?)
Clearing Out Inventory
Need to get rid of those holiday sweaters in January? Tiered discounts are a great way to clear out stock without heavy markdowns. Set tiers that encourage customers to take more off your hands without cutting too deeply into your profit margins.
Loyalty Programs
If you’ve got a loyalty program, tiered discounts are a great way to show your repeat customers some love. You can create special tiers for your top shoppers, making them feel appreciated while encouraging even more purchases.
Service-Based Businesses
Tiered discounts aren't just for physical products. Service-based businesses can apply them to subscription models, service levels, or even package deals. The longer the customer commits, the better the discount.
Tiered Discounts Example: Learn from the Pros
Now that you know the benefits, let’s explore tiered discount examples from brands that are using this strategy to their advantage.
Fashion Retail (H&M)
H&M uses a simple but effective strategy:
- Spend $60, get 15% off
- Spend $80, get 20% off
- Spend $100, get 25% off
This strategy motivates shoppers to reach that top tier and snag the biggest discount, often tempting them to toss in just one or two more items to their cart.
Beauty Retail (Sephora)
Sephora is a master of combining tiered discounts with loyalty programs. During exclusive sales events:
- Gold members get 20% off
- Regular members get 15% off
This not only drives sales but also incentivizes customers to level up in their loyalty program for better discounts in the future.
Eddie Bauer’s Fall Season Tiered Discounts
Eddie Bauer, a retailer known for outdoor apparel and gear, offers seasonal discounts that push customers to spend more:
- Spend $100, get $20 off
- Spend $125, get $30 off
- Spend $150, get $50 off
This approach aims to boost order size, and for members, the bonus of free shipping on orders over $50 makes hitting those higher tiers even more tempting.
Ecommerce (Shein)
Shein’s tiered pricing strategy offers customers increasing savings based on how much they spend:
- 10% off orders over $69
- 15% off orders over $109
- 20% off orders over $189
And it doesn’t stop there. Members of Shein Club get even more perks, like:
- An extra 5% off on 100k+ exclusive items
- 12 free shipping coupons to use throughout the year
Shein’s approach encourages customers to spend more while feeling like they’re getting unbeatable value with every purchase.
Pulp & Press—Drive Habit Formation
Pulp & Press uses tiered discounts to encourage habit formation for their cleanse subscription packs:
- 10% off 3-day packs
- 15% off 5-day packs
- 25% off 7-day packs
By breaking down the discounts by the number of days, the brand not only motivates customers to try out their cleanse products but also helps them visualize successful outcomes, which drives repeat business.
Footwear (Skechers)
Skechers’ tiered discount system keeps things simple but highly effective:
- Buy 1 item, save 10%
- Buy 2 items, save 20%
- Buy 3 items, save 25%
On top of that, VIP members get an additional 5% off on apparel purchases. The more you buy, the more you save, and Skechers rewards loyal customers with even bigger perks, driving up average order values while strengthening customer loyalty.
Francesca’s “Party Edition” Tiered Discounts
Francesca’s, a women’s clothing boutique, uses tiered discounts during seasonal promotions like their Party Edition sale:
- 40% off orders over $100
- 50% off orders over $150
Free standard shipping is available on orders over $65, encouraging shoppers to spend more to reach the higher discount tier boosting average order value.
Fashion Retail (Bershka)
Bershka’s tiered discount structure makes it easy for customers to save more as they shop:
- Buy two items, get 10% off each
- Buy three or more items, get 15% off the total purchase
With automatic discounts applied at checkout, the process is seamless for customers. This strategy encourages bigger purchases while keeping customers happy with straightforward savings.
Dick’s Sporting Goods’ Rewards Program Tiered Discount
Dick’s Sporting Goods combines tiered discounts with their loyalty program. In a recent promotion, they offered:
- 20% off select clearance apparel
- 10% off select clearance footwear
ScoreCard members also received bonus points: 150 points for spending $75 and 300 points for spending $150, further incentivizing loyalty and encouraging bigger purchases.
Thrive Causemetics’ “Spend More, Save More” Tiered Discount
Thrive Causemetics, an eCommerce beauty brand, leverages tiered discounts to align with their mission of giving back. Their "Spend More, Save More" offer includes:
- $5 off $75
- $10 off $100
- $15 off $125
This structure caters to a variety of budgets, ensuring that each customer gets a discount at the level they’re comfortable with, all while supporting a charitable cause.
Zales’ Percentage-Based Tiered Discounts
Zales, the jewelry retailer, uses a percentage-based tiered discount to push high-value purchases:
- 25% off purchases over $4,000
- 20% off purchases between $1,500 and $3,999
- 15% off purchases up to $1,499
What’s unique about Zales’ approach is that the discount is applied only once items are added to the cart, encouraging shoppers to explore different products before they commit to buying.
Why Choose Discounty for Your Tiered Discount Campaigns?
Running a tiered discount campaign can get tricky, but with Discounty, you've got all the tools you need to make it easy. Here's why businesses love using Discounty:
Customizable Tiers: Set your discount levels based on customer behavior and business goals. Use our minimum cart discounts base on minimum order value or volume discount manager.
Automation: Discounty handles everything, from applying discounts at checkout to notifying customers about upcoming offers.
Real-Time Analytics: Track how your discounts are performing and tweak tiers as needed to maximize effectiveness.
Seamless Integration: Discounty works with Shopify to make setup quick and painless.
In summary
Tiered discounts offer a flexible and powerful way to grow your sales, build stronger customer loyalty, and stay on top of your inventory. With tools like Discounty, implementing these discounts becomes easier, helping you achieve higher sales with minimal effort.
Ready to get started with tiered discounts? Check out Discounty for tools that make setting up your discount strategy easy.
Frequently Asked Questions About Tiered Discount (FAQ)
1. What does tiered pricing mean?
Tiered pricing means offering different discount levels based on how much a customer spends or buys.
For example: 5% off $50, 10% off $100, 15% off $200 — the more they buy, the bigger the discount.
2. What is an example of a tiered sale?
A tiered sale could be:
“Spend $50, get 5% off; spend $100, get 10% off.”
This encourages shoppers to add more to their cart to reach the next discount level.
3. How can I use tiered discounts in Shopify stores?
You can easily create tiered discounts with the Discounty app.
It lets you set multiple discount levels, customize messages, and automate campaigns — helping boost conversions and average order value.
