A Discount Tells You Nothing About Your Customer

A discount buys the order. It tells the business nothing about the person who placed it.

Most Nigerian e-commerce businesses open the same way. Free delivery on the first order. Twenty percent off for new customers. A discount code the moment somebody signs up. The orders come in, and the founder reads them as customers. What he has is a list of people who accepted a price they will not get on the second order.

The pattern is the same in every business that runs this play. Orders arrive in a rush while the offer is live. The week after it ends, they fall back to where they were before it started. Nothing was learned in between. All the business learned is that Nigerians will take a discount. It knew that already.

The founder reads this as marketing that worked, because the numbers went up while it was running. The month after is quiet, and that gets blamed on the market.

The damage is in what he does next. A customer who came for free delivery and left sits in the same figure as a customer who came because the product was good and will order again next week. Both are a sign-up. Both are a sale. The founder takes that total and plans the next month around it, buys stock for it, keeps riders on for it. The offer ends, and he finds out how many of them were never really customers.

The decisions get bigger from there. More stock. A second delivery area. Another person on the payroll. Each one is a monthly cost the business will still be paying long after those customers have stopped ordering.

One number tells you what you actually have. Count the people who bought during the offer, then count how many came back and paid full price. That figure is the business. Few customers coming back means the discount did the work and the product did none of it. Plenty coming back means the product is worth returning to, and the discount only brought people to it. It says whether the delivery arrived when it should have, and whether anything about the first order gave the person a reason to patronise the business again.

Nigeria's digital economy is built by businesses that keep the customers they win. A business buying orders with discounts is paying for attention from people who owe it nothing, and when the offer stops, so does everything the business thought it had built.