Mastering discount codes for your Shopify store
Ready to leap into Shopify discounts but need more confidence? Or have you already ventured and you want to fine-tune for better results?
Wherever you are on the spectrum of Shopify discount knowledge, you’re in the right place.
We’re here to talk all things Shopify discount codes: from formulating an advantageous setup to getting the word out.
Ninety percent of consumers are more interested than ever in getting discounts because of rising prices. So it's important to create attractive ones that will help — not harm — your store.
What are Shopify discount codes and why use them?
Automatically applied storewide sales are a standard tactic for a good reason. They’re simple to implement, easy to understand, and ideal for reaching a broader audience and attracting new customers.
In Shopify, it’s as simple as applying an automatic discount sitewide. Job done — nothing extra for shoppers to do.
Discount codes, on the other hand, save customers money but require entering them at checkout. Sometimes they’re a generic code that everyone uses. Other times they’re a unique coupon code with an alphanumeric string built for one individual.
So why hassle with creating discount codes in Shopify and adding another step for your shoppers? Isn’t it a potential barrier for the impatient?
There are plenty of reasons to take this route, most of which fall into one of two drivers:
- Better targeting. If you want to offer a particular segment of your audience a special offer, discount codes are the way to go for their control factor.
- Better analysis. If you open a sale to everyone and automatically apply a Shopify discount, how do you know what motivates customers to purchase? Was it an email? A social media post? Discount codes allow you to track engagement per marketing channel when you create them properly.
Whether you leverage Shopify discount codes for a sitewide sale or embed them into a product launch email, you create value for everyone involved.
For customers, discount codes can:
- Save money
- Remove a hurdle for those unwilling or hesitant to pay the full price
- Make them feel appreciated, especially if it’s an exclusive unique coupon code
For your shop, discount codes can:
- Provide a boost to sales
- Generate buzz around your brand
- Drive traffic during slower sales periods
- Move excess inventory with loss leader pricing
Recoup a portion of sales from abandoned checkouts
Discount code options in Shopify
The word “discount” is usually associated with “percentage off.”
It’s a classic sales pitch but not the sole option. Shopify enables several promotional pricing strategies through its discounting tool, with the flexibility to configure them in many ways.
Navigate to Discounts in your Shopify admin and select from:
- Amount off products: apply a percentage or fixed amount discount to specific products or collections, with the option to add purchase or quantity amount minimum requirements
- Amount off order: same opportunities as “amount off products” but applied to the entire order
- Buy X get Y: provide a discount on specific products or collections, or something for free, when the buyer meets a minimum quantity of items or spending threshold
- Free shipping: remove shipping charges with a minimum purchase amount or item quantity
Check the Seguno help doc for the details on configuring discounts in Shopify.
How to protect profit margins with discount codes
Big-box retailers can afford to provide generic and low-restriction discount codes regularly. Shopify merchants — not so much. They usually have a lot more to lose if they’re not careful and one runs rampant.
How you set up your discount in Shopify determines whether you circumvent a money-losing fate.
It can be a tricky balancing act. You want to entice, but not at the cost of profitability. Tap into the following seven tips for walking the tightrope more securely.
Tip 1: Require a minimum purchase
You will always detract a segment of shoppers if they must spend a minimum amount before cashing in on a discount. And that’s OK.
As with many of these discounting strategies, the point here is to increase your average order value (AOV). It’s an especially valid tactic if you offer free shipping. Determine a spending threshold that allows you to cover the shipping rate comfortably.
Digital marketing consultant Aaron Zakowski recommends setting it at 30% higher than your AOV.
Tip 2: Be strategic with products and product collections
You’ll have better command over margins with intentionality around product and product collection selection. It means doing the math to identify what will work in your favor.
Some tips, per McKinsey & Company insights:
- Avoid marking down the high performers. Why discount if they’re already selling well and meeting your targets?
- Turn attention to low-performing products. Devise price reductions that will help move the product faster.
- Toss a bone with the occasional discount on higher-priced premium products.
Tip 3: Set usage limits
Anyone mindful of discounting doesn’t want their code appearing on a coupon-sharing site like RetailMeNot or Honey. It can easily lead to a disaster.
But if you put guardrails on the code’s usage, it shouldn’t matter.
Restrict Shopify discount usage to a total number. Limit its use to one time per customer. Or implement both restrictions.
Tip 4: Use unique coupon codes
Unique codes take usage limits to the next level. In our book, they’re the No. 1 best practice for preventing coupons from going viral and being abused.
As previously explained, each is a unique code — a fingerprint of couponing, of sorts. You can assure that the code is valid for one-time use by one person.
Merchants that use Seguno for email marketing can create unique codes within Shopify’s admin without complication. Non-Seguno email marketers — or Seguno users who want to use unique coupon codes for channels outside of email — can achieve the same effect with Seguno’s Bulk Discount Code Bot.
Tip 5: Schedule an end date
You don’t want your discount to be valid for an eternity. Ensure you assign an expiry date. It also lessens the burden of Shopify discount code management.
Clearly state the terms in promotions so there is no question about discount eligibility rules. Include the exact time it expires and a time zone for clarity.
Time-limited promotions are more effective than open-ended offers. Studies show promos of short duration motivate customers to make purchases more quickly.
Bonus tip: Amplify urgency by using a countdown timer in email marketing.
Tip 6: Harness the ‘amount off’ instead of a percentage
Let’s assume you require a minimum spend before a discount is activated.
So we’ll pretend the customer needs to purchase $150 worth of product.
At first glance, 10% doesn’t sound like a bad idea. It’s a $15 savings on $150.
But what if someone spends $200? With a 10% off reward, you’re saving them $20.
A flat $15 discount is better to ensure your shop calls the shots.
Tip 7: Select free/discounted products wisely
“Buy one, get one free” doesn’t have to mean products of the same price point. In fact, are most Shopify stores capable of giving away something of equal value?
A better approach for profitability-conscious merchants: offer a free but substantially lower-valued product with the purchase of a high-value product. Or, make the “free” product available at a heavily discounted price.
Provided the discount revolves around a specific product, pick something that complements it. View it as a cross-selling opportunity that could lead to future sales.
How to promote and share discount codes
You’ve created your Shopify discount code. Now it’s time to get it noticed.
We’re breaking promotions into three categories: through your Shopify site, email marketing, and other marketing channels.
Promote discounts through your Shopify site
Your Shopify website is the portal to your brand, making a homepage takeover a natural solution for promoting an offer.
But what if a subtler approach is more your aesthetic? Two suggestions:
- Publicize it in a banner. You’ll still attract attention without the in-your-face effect. Banners can accommodate general promotions but not personalized, unique coupon codes.
- Call it out in a website popup. Did you know popups aren’t solely for capturing email addresses? Use them as a megaphone for sharing company news, such as an offer. Like the banner, you can only include generic codes. You could also tuck a Shopify discount code into an exit-intent popup solely activated on the cart page to entice customer checkout.
Seguno’s Dynamic Banner Suite includes banner options for making an announcement, promoting free shipping, and advertising a discount.
Promote discounts through email marketing
Email marketing is not only a direct line to your audience but provides a lot of real estate for messaging. Tap into every bit of what you know in creating email designs that convert.
Or make noise with a series. We don’t suggest blasting your contacts multiple times a day or even daily. That’s a ticket to getting the spam stamp and triggering email deliverability woes.
Instead, space apart your email campaign and vary the message. Here’s what a promotional sales campaign could look like:
- Message 1: an initial sale announcement
- Message 2: highlighting products from a best-selling collection
- Message 3: magnifying the features of a top product or collection
- Message 4: last-chance message
Seguno has a pre-built starter campaign pack for sitewide sales and professionally designed promotional email templates.
Email is incredibly ripe for notifying segments about an exclusive offer. Survey the behavioral data you have on hand for your shop. Re-engagement ideas will inevitably surface.
For example, studies indicate 75% of customers are more likely to purchase again when given an incentive. You could create a unique coupon code for subscribers who previously bought from your shop. Or, if you want to hone in on personalization, extend savings on a specific product collection to those who purchased from it.
Intent on retaining customers? Shopify discounts are suitable for any type of post-purchase email.
Promote discounts through other marketing channels
Your website and email marketing are the most effective channels for sharing your Shopify discount codes.
Amplify awareness by tapping other mediums, such as:
- Social media platforms: expand your reach through Facebook, Instagram, TikTok and wherever else you have a social presence
- Influencer campaigns: introduce your brand and attract new customers through collaborations with niche-relevant content creators
- Digital advertising: use Google Ads and other paid ads to connect with people searching for products you offer
- SMS marketing: message on-the-go consumers who subscribe to receive your texts
- Push notifications: reach users who allow for mobile app alerts
- Direct mail: send physical postcards with instructions for code redemption
How do you know if your advertising efforts are working? Here's how to figure out your ROAS (return on ad spend).
Remember, you can ensure coupon code exclusivity with Seguno’s bulk discount code creator. Export sets and upload them to the marketing platform of your choice.
Post-promotion: measuring discount code performance
The saying goes that you can’t improve what you don’t measure. Evaluating the performance of a Shopify discount code is equally important as front-end prep work.
Look to discount code reports first. In Shopify, this is the “sales by discount” option.
If you’re using a tool like Seguno email marketing or its bulk code generator, you can easily see a discount code set’s aggregate sales. You’ll also avoid the manual calculations tied to a large data dump of individual codes.
You’ll also want to investigate Shopify sales metrics, examine email analytics, and check the performance of any other marketing channel you leveraged. Take note of sales, AOV, and metrics such as click rates. Compare them to your averages and the results of past promotional pricing strategies.
The data-crunching effort is worth it once the winners and under-performers emerge. Use your learnings to guide your next Shopify discount code endeavor.
Shopify discount codes can provide worth to consumers while giving a lift to your shop, especially when you plan them with your margins and customer satisfaction in mind.
They are the choice — over automatically applied discounts — when you want to target an audience segment or glean the impact of your promotional channels with more precision.
The best part about Shopify discount codes? They’re versatile.
Whether you want to delight with a “free” gift or mark down a collection of products, there are tools to be as narrow and restrictive with your discount as you desire.
So test different promotional pricing strategies and tinker with the parameters. Always build in precautions to combat the risks.
One extra piece of advice: stick to one Shopify discount at a time. Too many concurrent sales can confuse shoppers. They’re also a headache to manage. And how can you be sure you won’t cut into profits?
Stay in control. Then, get promoting.
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