Tiered Discount
Increasing discount percentages at higher spending thresholds.
Increasing discount percentages at higher spending thresholds.
Why It Matters
Tiered discounts gamify spending by creating 'unlock' psychology. Customers add more to reach the next tier, increasing AOV 25-40%. The structure also rewards best customers with deepest discounts while protecting margin on smaller orders.
Practical Example
Scenario
A home goods brand implements: Spend $75 = 10% off, Spend $150 = 15% off, Spend $250 = 20% off.
Calculation
Before: $95 AOV. After: $128 AOV (customers stretch to hit $150 tier). Additional revenue: $33. Discount given: $19.20 (15%). Net gain: $13.80 per orderResult
AOV increases 35% while average discount is only 15%—the tier structure captures customers at multiple price points efficiently.
Pro Tips
- 1Set first tier at 15-20% above current AOV for achievable stretch
- 2Make each tier increase meaningful (5% jumps, not 2%)
- 3Show progress bars in cart: 'Spend $23 more to save 15%!'
- 4Test 3-tier vs 4-tier—more tiers can confuse or feel manipulative
Common Mistakes to Avoid
Frequently asked questions
Put it to work
Related Terms
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