What Really Makes Shoppers Buy (Discount Code Study) — Cara Marin | The Discount That Drives The Most Sales, How To Scale Shopify Promotions, Why Unique Codes Stop Leaks, How Big Brands Scale Discounts, Why Win Back Offers Work Best (#454)

In this episode, we tackle the problem almost every Shopify merchant knows: discount codes. 

Cara Marin from Seguno shares the learnings from their massive benchmark report on 162,000 real discount campaigns. 

She reveals how top brands scale promotions the smart way, using unique, personalized discount codes to avoid leaks, prevent shrinking margins, and achieve better attribution without destroying profitability

Topics discussed in this episode:  

• Why Shopify Plus brands use unique discount codes more often.
• Why static codes leak to coupon-sharing sites.
• How unique codes stop leaks and improve attribution.
• How unique codes allow more discounting without hurting brand perception.
• Which seasonal promos are the most common use case.
• Why welcome, win-back, and post-purchase offers matter in the customer life cycle.
• Why gift-with-purchase deals work so well for revenue and AOV.
• How smaller brands can start fast with new-subscriber and abandoned-cart offers.
  
  

Links & Resources 

Website: https://www.seguno.com/
Shopify App Store: https://apps.shopify.com/partners/seguno
LinkedIn: https://www.linkedin.com/in/caramarin

Get access to more free resources by visiting the show notes at https://prourls.link/6yUt3P

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Transcript

00:00:00:00 - 00:00:23:19
Unknown
If you're brand out there and for our listeners, if you don't do that, you're really leaving money on the table that. Hello, Welcome to another episode of the E-commerce Coffee Break podcast. Today we're tackling a problem almost every Shopify merchant knows too well. Discount codes. Most stores are still using simple static codes, and that means leaks, shrinking margins and no idea which campaign actually drove the sale.

00:00:23:21 - 00:00:48:06
Unknown
In this episode, you'll discover how brands scale promotions the smart way without guesswork, without destroying profitability. Joining me is Karen Marin from Segundo. She helps Shopify brands unlock the full power of personalized promotions and just released a massive benchmark report on 162,000 real discount campaigns. Cara, welcome to the show. Thanks so much for having me. Cara, you studied 162,000 discount sets.

00:00:48:06 - 00:01:13:21
Unknown
That's quite a lot. What's up to you most about the discount usage? Well, one thing that didn't surprise me, but that frustrates me is that we see that larger brands, Shopify Plus brands are using unique discount codes, a whole lot more than smaller brands. And so, yeah, hopefully we'll get to dig into some of the ways that they are using unique discount codes that some other brands can learn from, too.

00:01:13:23 - 00:01:43:02
Unknown
Mm hmm. You mentioned static codes and dynamic codes. Maybe for listeners who have not really dove into the details there, what's the difference? Yeah. Yeah. So a static code is like if you're sending a new subscriber welcome discount and it's welcome ten And so every customer is going to get exactly the same discount code. And the main the downside of this is it can leak to coupon sharing sites.

00:01:43:02 - 00:02:04:20
Unknown
And like you mentioned, you don't know exactly where people came from. So attribution gets really wonky. And so the solution to that is unique discount codes, which are single use discount codes for each customer. So instead of welcome ten, it'll be like, welcome back to my accent. The bulk of seven something different. So each customer gets a different unique discount code.

00:02:04:22 - 00:02:24:07
Unknown
And what that does is it makes it totally leakproof and never can get to a compound sharing site because it's only one time use and that locks in really, really solid attribution. So you can actually know what is converting your customers. Mm hmm. I want to dive a little bit more into the strategies and tactics to make most of the discount codes.

00:02:24:07 - 00:02:50:14
Unknown
Obviously, it hurts a store to give out too many discount discount codes all the time. So as a merchant, you'll probably want to just avoid discount codes as much as possible. What are the common most common discounts that you see out there from your study? Yeah. So one one thing I would I would push back on is where discounts go wrong is when you have these blanket discounts on your site all the time.

00:02:50:16 - 00:03:20:00
Unknown
So you're training your customers to wait for a discount. And I talk to larger brands all the time who do feel that they've discounted too much and they're trying to change the brand perception. And and by using unique discount codes, you're actually able to discount even more. But it's always like behavior based and targeted and strategic. So it's not predictable to your customers and they're not just going to wait for the discount and kind of think that your your brand, they should only buy at a discount.

00:03:20:06 - 00:03:44:08
Unknown
And so unique discount codes are a great way to combat that. But that being said, let's talk about the the main use cases. So one of them. So so first we see just seasonal promotions. And so this isn't just Black Friday and things like that. It's actually like fall sale, summer sale, four different holiday specials here brand. So that's the most popular use case.

00:03:44:10 - 00:04:12:16
Unknown
And after that, we see marketing lifecycle. So that would be the welcome example I gave went back post-purchase. And then one that I find really interesting that's also really popular is the affiliate use case. And so brands are more and more working with affiliates and they want to know is it working, Is it driving sales? And by using unique discount codes, they can actually see what sales it attributed to which influencer.

00:04:12:20 - 00:04:35:18
Unknown
So they can know where to double down and where not to. Mm hmm. I want to unfold these different levels of discounts. You mentioned the beginning. There is stores, and I just saw some store the other day which basically every product, every collection page on everything was a discount. So basically they were training their customers on getting a discount all the time.

00:04:35:20 - 00:04:55:06
Unknown
Tell me what's what's the frustration there? What's what's the problem there? Well, when the brand demands to sell something at full price, customers aren't going to buy, right? They're just going to be waiting for the discount. And that's really frustrating as a brand, unless if you've you've that's how you you've designed your pricing. But I don't see that very often.

00:04:55:08 - 00:05:21:05
Unknown
And so when you use these targeted strategic and less flashy discounts, you're able to give discounts that are going to drive a conversion and only the amount needed to drive the conversion without having that perception that you're always discounting. And so it's a way to do targeted discounts that drive sales and without making your brand seem cheap. Mm hmm.

00:05:21:08 - 00:05:44:20
Unknown
No, I totally agree. And you mentioned there is a behavioral structure. So depending on how they behave, what they do on your store. And then there's obviously the campaign driven for the summer sale for the windows for Black Friday. What a dive into these behavioral things. And I think there's different layers to it. Obviously, you have to the one the abundant cart, one which probably everyone knows, but there's other levels.

00:05:44:20 - 00:06:09:08
Unknown
Talk me through it. Yeah. So the so the most popular one we see is the welcome discount. So this one is so important. This is usually the one I tell people to get started with for unique discount codes, because if you use Welcome ten that blanket discount code, then your customers aren't incentivized to actually give their email or their aftermath so that you can contact them and nurture them if they don't buy right away.

00:06:09:10 - 00:06:29:08
Unknown
And so with the unique discount code, you're saying you have to give me some contact info so now we can correspond and you get this unique discount code to get some amount off. And so that's that's the most popular one. Abandon cart is really important. And interestingly, we don't see it as commonly as we would expect to even among big brands.

00:06:29:08 - 00:06:50:17
Unknown
So I think that's something every merchant knows. Abandoned cart, right? Browse abandonment. These those are great opportunities somehow in our data. Those do not come up nearly as much. And so that's a really Yeah I see you're like, how is that possible? I agree. People should be doing it more. But somehow they're doing it quite a bit less than expected.

00:06:50:18 - 00:07:20:20
Unknown
And the two that we see people doing the most, in addition to the new subscriber offer, is when that so customers who have lapsed trying to get them back based on the time frame that's appropriate. So this could be like maybe 90 days later. I see a lot of brands doing this. Also a year later, if it's something people buy or annually as a win back is really important and post-purchase because you've just made a purchase, maybe you want something that will accompany company, right?

00:07:20:20 - 00:07:41:22
Unknown
And said that one, those are the three most popular ones we see in the behavioral. Yeah, it really be my surprised face about abandoned carts. I mean that's the closest to the money you can get and that's the easiest to get them back to go through the checkout. I mean, if you if you're a brand out there and for our listeners, if you don't do that, you're really leaving money on the table there.

00:07:42:00 - 00:08:06:03
Unknown
Now, we mentioned welcome ten, welcome 20. In regards to percentage or amount in U.S. dollars, what works better and do you see a cap there? So what's the sort of the average discount you see and is there any upper limit? Yeah. So I don't know if I would share this with you in advance. Do you have a guess as to what the most popular discount office percentage off?

00:08:06:05 - 00:08:38:01
Unknown
I would reckon 10%, maybe 10%. So that's a good guess. The most popular one is 20%. And then actually the second most popular on is 10%, which usually people guess it's going to be 15. So it's interesting, 20 is the most common and then ten is the second most common. And and usually when I talk to brands, they're they're really thinking about what's the cost to acquire a customer that they're comfortable with and and that's how they're choosing one of those two.

00:08:38:03 - 00:09:01:17
Unknown
Okay. That makes sense. In the beginning you mentioned that bigger brands probably on Shopify Plus use discount, much more strategic and much more often than smaller brands. How can smaller brands basically catch up on what the bigger ones do? Yeah, so I think there's a perception that if you discount too much with blanket discounts, you're going to make your brand seem cheap and compromised brand perception.

00:09:01:19 - 00:09:23:06
Unknown
And then there's a perception that using unique discount codes is hard and it's like it takes a lot of effort to set that up. And so if you don't have a dedicated person or team, that's really intimidating. But the thing is for these, if you just select a small number of use cases that are really high value and set it up, it's super easy and it just runs on its own and makes you money.

00:09:23:08 - 00:09:46:23
Unknown
So good ones to do. Are that new subscriber one? I love the abandoned cart one another. We don't see it nearly as often as we should and yeah, I would, I would definitely start there as a good way to to drive more revenue with targeted discounts. Mm hmm. Now, it's a good rule. You have developed a discount app that supports all of what we were just talking about.

00:09:47:00 - 00:10:13:12
Unknown
Talk me through it. How does it work? How does it integrate into the shop? And how does the day to day maintenance of the system looks like? Yeah, so it's an app built at the shop fact. So it's fully Shopify native. And how it works is you choose what campaign you want to run. So is it your welcome offer, your abandoned cart offer and you select the different Shopify discount settings that you'd like to have.

00:10:13:12 - 00:10:38:08
Unknown
So is that a percent off amount, off whatever? And then you select how many codes you want to generate and it will just generate the codes for you. Usually it just takes a few minutes, it's pretty fast and from there you can either export to CSP to upload to any marketing channel you like. And we recently added a direct Klaviyo integration, so that makes it a lot easier for doing the welcome offers.

00:10:38:08 - 00:11:00:12
Unknown
And those those offers that are offered over email are a mess. Mm hmm. Yeah. For our listeners by now, you should know Klaviyo is your go to system when it comes to email marketing. I'm not biased, I'm not related to anywhere in to Klaviyo, but it's just the best integration that's out there. Now you mentioned that also working with influencers is a way to use discount codes.

00:11:00:13 - 00:11:22:08
Unknown
How does that work? Yeah, so usually people use a platform like mentioned me and so they'll go into the app, generate unique discount codes, expert to CSP and then upload them there. And then as you're working with your influencers, they have those unique discount codes assigned to them and that's a really common use case. I think it was now I was number two in my notes.

00:11:22:08 - 00:11:41:11
Unknown
I was thinking of it as number three. Number two was the affiliate use case. So that's usually how it's done. If you're like experimenting with a very small influencer program, you can consider not using the app and trying to do it manually. But I, I haven't really seen that so much. It's usually using something like mentioned me. Okay.

00:11:41:13 - 00:12:04:11
Unknown
Can you share some success stories or case studies of businesses that have implemented your app and what kind of results they saw as an example? One of my favorite brands, when they came to us maybe three years ago, they were really frustrated because they were in that over discounting perception moment. So they had wanted to move inventory, wanted to grow fast.

00:12:04:13 - 00:12:32:16
Unknown
They were discounting discounting, discounting, discounting with blanket discounts on the website, and now their customers did not want to buy at full sale and their products are like it's like maybe between 100 and $200. Is that average order value? And so they they really wanted to get that full average order value. And and so what they did to rein it in is they came to the app, they moved to almost exclusively unique discount codes instead of those blanket discount codes.

00:12:32:18 - 00:12:59:14
Unknown
And with it, they were also able to experiment. So they were like, does $15 off or 10% off work better? And because you have a targeted offer to each segment, you're able to say, okay, I'm going to try this offer here, in this offer here, let's see in two weeks, which did better, and then you can keep iterating and find that right amount to offer in order to get conversions.

00:12:59:16 - 00:13:23:08
Unknown
Mm hmm. Good point. Reporting in the system And you mentioned you need to let it run for a while. You need to have statistical significance. What what's your tip to make this work in the best possible way, the reporting. So it's not to plug your app, but also Shopify and not just our app. You'll be able to see redemptions, revenue and average order value in our app.

00:13:23:08 - 00:14:02:08
Unknown
And you and I also integrates and other apps that that do this but integrate hopefully with Shopify so you can look in Shopify as native reporting to kind of break things down however you'd like And and the most common ones we see are the revenue redemptions and average order value. ROV, one of the most interesting ones I've also seen, I seen merchants care about two as a units per transaction and because they want to know, especially if you're doing buy more, get more off, they want to see how many actual units are getting added to the purchase.

00:14:02:08 - 00:14:31:06
Unknown
So that's a pretty interesting one to watch. Okay. So now we also talking about more complicated discussion. So you said buy one, get something free or get something else. And so that's also doable. Was was your app. Yes. And that that in our report, that was also one of the kind of things that just frustrates me to see that smaller merchants aren't using as much as gift with purchase or buybacks get y and gift with purchase, especially just one.

00:14:31:12 - 00:14:59:04
Unknown
So we see I think it's is six times more often by larger merchants and smaller merchants. So there's something interesting there. And when I talk to our larger merchants, they tell me that that's often one of the most efficient ways to drive revenue is to yeah, it sounds like you see the CEO as offering a gift with purchase, which is actually excess inventory, but has a high perceived value depending on how your brand is structured and stuff.

00:14:59:06 - 00:15:22:05
Unknown
And if your typical cart size is $50, you put it at 59 and then you get there a lot more often. And so gift with purchase as a really great discount to use and I wish more people would use that. I'm glad to see larger brands use it, but but smaller brands. Let's do it too. Yeah, I love this concept.

00:15:22:05 - 00:15:43:04
Unknown
I have to use this as my own store and it also makes it much feel as a merchant feeling much better than saying I just discount ten 20% and as you said, it increases your average order value. So this is a really good strategy for our listeners. Look into it as this also makes your money. Now to us, who's your perfect customer?

00:15:43:04 - 00:16:07:22
Unknown
What kind of brands do you work with? We work with anyone that takes like a strategic approach to growth and wants discounts to be part of it. So when we do work with a lot of larger brands, but also brands of any size where you're already personalizing your marketing, you're putting a lot of thought into how to drive growth and you want discounts to be part of that.

00:16:08:03 - 00:16:27:10
Unknown
And we currently have more than 20,000 brands that we work with. So big range, not really touch a little bit on the onboarding process. How does that look step by step? What kind of steps are involved? How long does it take to get up and running? I hopefully it's fast, not reach out, just so you just install the app.

00:16:27:10 - 00:16:49:13
Unknown
It's called both discount code bot basic, you know, in the App Store. And then once it's installed, you go right into creating your discount and generating your unique discount codes. And then within a few minutes they'll be ready for use, either with that direct integration into Klaviyo or export to upload into any marketing channel you'd like. MM Most important question how do you earn money?

00:16:49:14 - 00:17:11:22
Unknown
What's your pricing structure? We charge a monthly fee to use that platform and so it varies if you look at our pricing page but often comes down to smaller brands versus larger brands that want more reporting and controls. And so it'll be either $19 a month or $99 a month and it's free to start. I should include that.

00:17:11:22 - 00:17:29:13
Unknown
It's free for the first three set. So if you want to just try it out, see how it feels. First three are free and there there is a ten day free trial on either plan as well. Okay, That's absolute no brainer. Trying it out and I'm sure you will make money straight away, Kyra, before a coffee break comes to an end today.

00:17:29:13 - 00:17:57:00
Unknown
Anything you want to share with our listeners that we haven't covered yet? Well, one thing that's interesting is based on where in the world your customers are, discounts are more popular. And so the most noticeable one there that I thought was pretty interesting is insider discounts, which is for employees, students, teachers, veterans. Those are those are those are pretty popular across the board.

00:17:57:00 - 00:18:25:09
Unknown
I think they were number four across the board. But in Europe, they were like number two. So those insider discounts are are especially good to take a look at over there. Okay. That's that's interesting that there is regional international differences. Yeah. It just can't use I never thought about this point actually. It's kind of interesting that you came to the conclusion that there's something like this perfect current where can people go and find out more about security and the app?

00:18:25:11 - 00:18:43:09
Unknown
And so you can go check out our app and the apps are both discount code buy or website secure knockoff. And if you have any questions for me, I'm always happy to chat. Kara at Junocam is the best way to get in touch. I will put the links in the show notes. As always, things you just want to click away.

00:18:43:11 - 00:19:12:15
Unknown
Kara, thanks so much for your time today and giving us an overview about on the right use of discount codes and so many gold nuggets in there for our listeners. Go try them all out. I'm sure you will make more money. Thanks so much for your time today. Thank you.