Discounts, Decoded: What 182M Shopify Discount Codes Reveal — Cara Marin | How Smarter Discounts Increase Your Profit, What Top Shopify Brands Do Differently, How Discount Data Changes Strategy, Why Personalized Discounts Convert Better (#491)

In this episode, we dive into how discount codes impact online store profits and customer behavior. 

Cara Marin, Product Lead at Seguno.com, shares how analyzing 182 million Shopify discount codes reveals the winning strategy between percentage-off and amount-off deals. 

She reveals why percentage discounts drive much higher average order values and how to use personalized workflows to maximize margin. She also shares strategies for stopping leaked codes and timing discounts perfectly to grow revenue safely.

Use discount code "COFFEE" to get 20% off your first month at Seguno.com. 


Topics discussed in this episode:  

• How percent discounts boost average order value.
• What 182 million Shopify codes reveal about sales.
• Why amount off codes get higher redemptions.
• How to protect margins with a 20% discount cap.
• Why minimum spend rules rescue flat profits.
• How personalized codes stop coupon leaks completely.
• What lifecycle offers drive five times more sales.
• Why relationship based deals beat holiday sales.
• How to plan strategic discounts for net growth.
• What integrations automate personalized revenue. 

Links & Resources

Website: https://seguno.com/bulk-discount-code-bot
Shopify App Store: https://apps.shopify.com/bulk-discount-generator
LinkedIn: https://www.linkedin.com/company/segunosoftware/
X/Twitter: https://x.com/SegunoSoftware
YouTube: https://www.youtube.com/@SegunoSoftware

Get access to more free resources by visiting the show notes at https://tinyurl.com/ykh9jur9

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Transcript

00:00:00:02 - 00:00:21:02
Unknown
Often when people think of discounts, they're thinking of seasonal. Black Friday versus when you do offers that are about retention workflows and really based on the behavior of the customer, you're giving something that's more personalized and going to be much better. A lot of merchants do this, so there is a certain discount where you start with, and then you get, for instance, abandoned cart and you get another one and another one.

00:00:21:02 - 00:00:30:04
Unknown
What's the best case strategy that merchants should follow from your experience?

00:00:30:06 - 00:00:51:04
Unknown
Hello and welcome to another episode of the E-commerce Coffee Break podcast. If you run an online store, you know the reality. Getting traffic is hard. Keeping profit is even harder. And right at the center of that challenge is something every brand uses every day discounts. They seem simple, set a deal, drive sales. But in reality, they shape buying behavior, timing, and how much profit you actually keep.

00:00:51:04 - 00:01:12:04
Unknown
So here's the question what would millions of Shopify discount codes actually tell you about how discounts really work? Joining me today is Cara Marin from Seguno.com. And she has insights from 182 million codes. And she brings a rare view into what drives performance and what destroys profits. Cara, great to have you on the show again. Thanks so much for having me back.

00:01:12:05 - 00:01:33:03
Unknown
Cara. Most Shopify brands think a discount is just as current, but your data from 182 million codes says that's not true at all. When you look at a data set that massive, what's the biggest misconception merchants have about discount code? So the biggest thing that surprised me and that we see across our customers, people aren't taking as much advantage of as they should.

00:01:33:04 - 00:01:56:00
Unknown
Is that percentage off drives much higher or is associated with much higher AOV than amount off codes? So as we are looking at these 182 million codes, we wanted to do a head to head percent off versus amount off. And what we found is that usually when you talk to brands, they kind of think of them as roughly interchangeable.

00:01:56:02 - 00:02:22:02
Unknown
And we see in our in our data set that they're used roughly similar amounts. But when you look at the percentage off has 42% higher AOV than amount off. And so based on that we should be using percentage off more often than amount off by a lot. But but we aren't. I want to take one step back and really find out where you implement this.

00:02:22:03 - 00:02:52:04
Unknown
Obviously you can put this in different parts of the customer journey. What's the typical sort of flow when you start handing out discounts? This is also a misperception. Often when people think of discounts, they're thinking of seasonal Black Friday like these blanket holiday discounts. And those are an important part for for any brand's revenue strategy. But the thing is that those at that time of year, you're competing with so many other brands for eyeballs, right?

00:02:52:05 - 00:03:18:17
Unknown
Versus when you do offers that are about retention workflows and really based on the behavior of the customer, you're giving something that's more personalized, more relevant, and going to do much better. So this would be like welcome flows win back flows abandonment flows. And so those are the moments when I do look at setting this up or hopefully updating existing ones.

00:03:18:21 - 00:03:39:23
Unknown
You'll want to think about offering this percentage off discounts. Now, I have heard in the past that this is easier for a customer to just see a dollar amount because they don't have to do the math. Now your results are actually proving it differently. Why do you think that is? I would agree with that. That amount of is often easier to like.

00:03:40:00 - 00:04:09:00
Unknown
There's no math needed. And we do actually see, even though AOV is 42% higher, we do see that redemption rate is higher for amount off than percentage off. So the percentage off I have the 42% higher AOV and then amount off has 26% higher redemption. And so it is a matter of what you're optimizing for. I definitely lean towards towards AOB because that's a bigger, more meaningful number.

00:04:09:00 - 00:04:28:20
Unknown
But it's true. I think the hypothesis of amount off is just easier to understand right away. You understand what you're getting. That probably is associated with the higher redemptions. For this is I want to understand. I mean, how do you collect 182 million discount codes and actually how do you decide them? I mean, this is a huge amount of data.

00:04:28:21 - 00:04:50:18
Unknown
How did you do it? So we're lucky to have our bulk discount code bot that's used by tens of thousands of brands. And so we just grabbed our data just for 2025. And we didn't we didn't have a specific angle. We weren't thinking percentage off. First off, we just have a data scientist on our team. And he started looking at things in different ways.

00:04:50:19 - 00:05:14:05
Unknown
And on the product side, we had questions that we gave to him to kind of explore. And then this percentage off versus amount off comparison really came forward. Oh it's good to have a data scientist there. I wouldn't be able to do this. Yeah. Now a percentage of that can be a lot because I mean you always see like 10% sometimes more sometimes less.

00:05:14:07 - 00:05:39:00
Unknown
Do you have any indication or any results from the study. What's the best percentage of amount actually is or the best percentage of is. Yes. And so this was consistent with what we found last year. But we have more data than last year. So we were glad to see that strengthened. So the best percentage off depth to do is 20% when it comes to over and redemption rate.

00:05:39:00 - 00:06:03:19
Unknown
And so we we bucket by 5%. So looking at 15% you see that the Ave is lower than 20% and the redemption rate is lower than 20%. Interestingly looking at 25% you see that the redemption rate are pretty much the same as 20%. So it's not worth going that high because you're just giving away those five points of margin.

00:06:03:20 - 00:06:31:23
Unknown
So that's where we landed on 20%. Is that best depth to go for? And of course it varies by brand. That's a great starting point. But yeah. Do you couple this discount code with some kind of minimum spend or on every order. How does that work? So you don't need to for amount off. We found that using a minimum spend was really important, and it actually boosted AOV for the amount of codes 2.6 x.

00:06:31:23 - 00:06:52:05
Unknown
So it had a really significant impact on AOV for percentage off putting. Those minimums didn't have the same type of impact. But I kind of like you started hinting at you need to make sure that you put in maximums, because that's where if you do get to that really large order value, you could be giving away a lot more than you intended.

00:06:52:07 - 00:07:12:15
Unknown
I think that's interesting for our listeners is really how to sort of slice and dice your discounts. Obviously, you might have more than one discount in your business depending on what the customer does. Now let's talk about personal discount codes compared to like general discount codes. How do you deal with this? What we focus on is personalized discount code.

00:07:12:15 - 00:07:46:02
Unknown
So how they work in our app is their unique discount codes that are personalized to everyone who receives it. And then that's different from a blanket discount code, which can be great for for some types of discounts. Like if you want to put that Black Friday code just on your website, then you want that that static code. And the the main thing that I really love about using unique or personalized discount codes instead is it really gives you the opportunity to experiment and see for this customer at this moment in their life cycle with you.

00:07:46:03 - 00:08:08:02
Unknown
This is the discount that they need, and so you don't need to give away more just in order to hopefully get some some money through the door. So I think that's a really big thing and it is a lot of fun. Also thinking through what's the customer mindset at this moment? Does a 10% off discount do the trick because they're really close or are they almost lost?

00:08:08:02 - 00:08:32:04
Unknown
And we should do at least 20, maybe even up to 30. And you can personalize without having those codes all over coupon sharing sites and really impacting your brand perception. We spoke about this last time, and for our listeners, we have listened to the last episode with you. I just want to refresh this. Obviously, there is websites out there where discount codes are shared and your discount codes can leaks.

00:08:32:05 - 00:08:51:19
Unknown
Tell me a little bit more about this. How does that work and how can you prevent this? Yeah. So so sites like Honey or Capital One shopping, basically you'll have a shopper who's who's ready to buy. And then they have this browser exemption and it just pops. It scans through all the league codes and says oh you're ready to buy full price.

00:08:51:19 - 00:09:13:17
Unknown
But guess what? I just found 15% off. And so that it applies it. And so obviously you're losing that 15% off that that customer is ready to pay. And then but in addition to that you're also getting your attribution all murky. So it's harder to make decisions about what discounts to offer in the future. And it really can set you up not to not too well.

00:09:13:17 - 00:09:36:16
Unknown
And so when you use unique discounts, they can only be used by one person. So they really can't be leaked. And each person has their own code. So you don't need to worry about that anymore. And instead you can feel confident that the customer using the discount is the intended customer for using that discount. And you can see the attribution and the results for that particular offer.

00:09:36:18 - 00:09:56:21
Unknown
Yeah, this discount sites can be really a pain in the neck for merchants I have experienced at my own shop back at the time, so it's really good if you can avoid that. I want to talk a little bit about discount letters. A lot of merchants do this. So there is a certain discount where you start with and then you get for instance abandoned cart, then you get another one and another one.

00:09:56:22 - 00:10:20:00
Unknown
What's the best case strategy that merchants should follow from your experience? I think all of them. And there's there's often a hesitation when you talk to brands that especially if you're talking about blanket discounting, that you say, oh, well, they're going to get this abandoned cart one and then they're going to get something from you over SMS and something over direct mail and something in email.

00:10:20:00 - 00:10:41:05
Unknown
And, and went back at 90 days and went back. Right. So they're getting all these discounts. And isn't that going to cheapen my brand and train them to wait until the next discount? And people are worried about that. But the thing that we see with our merchants is when they use these personalized discount codes instead, they aren't at such a predictable cadence.

00:10:41:05 - 00:11:02:02
Unknown
They feel very personalized and relevant to you. You don't know exactly when they're coming and they don't. They don't have that harm. So all they're really doing is you're thinking from the consumer standpoint, like what? What is it going to take for them to make that next purchase? What new product do we have that we want to promote to them, specifically because of their past purchases?

00:11:02:04 - 00:11:25:13
Unknown
And with that intentional strategic offering of discounts, the perception of being cheapened really doesn't seem to be an issue. So it's just more money that you make when you're driving more conversions through those targeted discounts. It makes perfect sense, and I'm giving the right discount in the right moment in the customer journey. Definitely increase. Also the customer experience.

00:11:25:14 - 00:11:50:01
Unknown
Now let's talk about Segundo itself the tool. How does it work? Also implementation working. What's the day to day life with Segundo. So big discount code basically how it works. As you go in there you say, okay, I'm going to do this retention lifecycle campaign. I have wind back, I have abandonment, I have welcome. You generate any number of codes.

00:11:50:01 - 00:12:39:15
Unknown
So maybe let's say 100,000 codes. It'll just take a couple of minutes and then you'll have your codes ready. And then since last time we've added integrations now with Clavijo and Gorgeous. So those will automatically be available in those platforms. But for any other platform you just download a CSV and upload them and then distribute accordingly. And then from there you can go into reporting both our native reporting that tells you AOV and revenue and redemptions, and also Shopify's native reporting, and build any report that you want to really see how things are doing, and then tweak them and keep changing until you find that right balance where your discounts are efficiently converting customers at

00:12:39:15 - 00:13:04:15
Unknown
that right moment. I love that you say that you're not integrating with clay view and gorgeous. And obviously with Shopify, I think that's just very common pillars that a lot of merchants use out there. And now this place hand in hand, and you get the right message out no matter what system you have running in the background. Can you share some success stories or case studies of businesses that have actively used your system, and what kind of results there?

00:13:04:15 - 00:13:26:10
Unknown
So one customer who I've spent quite some time with her. Her name is Becky Chambers over at Cadiz Eyewear, and we actually just wrote up a case study with her. And she, she does like exactly what I'm saying. So something I really love is like, we have our hypotheses at Segundo, but then we really get to learn from these advanced strategic operators.

00:13:26:10 - 00:13:50:20
Unknown
And it's really interesting to see what they're doing and try to share their stories. And so Becky's whole thing at Cadiz is she's really, really strategic with the discount she offers. So instead of doing these last minute blanket sales to just kind of try to get revenue numbers up for the month or quarter, she and her team are thinking about what's that right product to offer a discount on for this customer?

00:13:50:20 - 00:14:19:02
Unknown
What what discount depth is the right depth looking at their historical data and at our benchmark data. And so they're planning out their discounts in advance and then really measuring the efficiency of the discount. So by efficiency it's looking at net sales and looking at how much you gave away as the discount. And for her she looks at three x I've seen brands I think it really varies based on the brand what what efficiency metric they want.

00:14:19:03 - 00:14:38:17
Unknown
But I think that's a great starting point. So really, really love her her use case there and the yeah the intention she brings to her discounting strategy I think that's very important what you mentioned there because as you said, a lot of merchants out there, they just get in panic mode or just say in general, we do a Black Friday discount because we do it every year.

00:14:38:17 - 00:15:06:22
Unknown
And I probably do not look into the numbers afterwards to see what really happened. And as you mentioned in the beginning, you can increase your Alvie with this. So it's not you're not losing money by giving out discounts. No, you make more money, but therefore you have to do really control what's happening there and to a strategy. I think that's very important for our listeners to understand a discount is not losing money, it's making money.

00:15:07:00 - 00:15:29:00
Unknown
Walk me through a typical onboarding process of a new client. What steps are involved? How long does it take to get up and running? Should be really quick. So you just you go in you hopefully we'll give you some ideas here of what discounts you should be offering. Right. Those welcome the win back retention campaigns the abandonment. So you go in you generate your codes.

00:15:29:03 - 00:15:57:04
Unknown
We recommend to tag them by the channel and the campaign so that you can end department if you have that, so that you can see spend according accordingly. And then you either use those direct integrations to Cleveland Gorgeous or you export and upload and start live right away. And we do. We have a ten day free trial, and most customers that I talk to are already live within that trial period.

00:15:57:06 - 00:16:24:17
Unknown
So that's a nice way to to get to experience it. Okay. Now that's very, very straightforward. And you get up and running very quickly. Is there any kind of homework that a merchant needs to do before they can get started? I know I think that's a misperception with discounting. And strategic discounting is and that's something that we have as a goal with exposing this data is there there are teams that are putting lots and lots of hours into the strategy.

00:16:24:19 - 00:16:54:19
Unknown
And I think that's great. And and there are serious rewards to that. But a lot of those best practices really apply across brands. And so for someone who doesn't have the time because they're doing everything right, there are some best practices that you can just apply. So thinking about percentage of for an amount off for redemptions and others that I had that that I found was interesting around seasonal versus those.

00:16:54:20 - 00:17:27:10
Unknown
What I think of as relationship based discounts is these relationship based ones. The win back the insider codes like for teachers, students, vets, employees, those have a five times higher redemption rate than the blanket codes. And that's because you're not I believe that's because you're not competing for eyeballs like you are at those seasonal discounts. And in addition to having a higher redemption rate, they also have a significantly higher AOV.

00:17:27:12 - 00:17:55:19
Unknown
I can pull up in my notes. Our average AOF for those relationship based was $144 versus $93. So you're getting better redemptions, better aof just by not exclusively doing those seasonal ones and really thinking about where the relationship you have with your customer and where they are at that journey. Yeah, so important to really find out who's your customer and what's the likelihood that they will convert.

00:17:55:20 - 00:18:25:00
Unknown
How does your pricing structure work? How do you charge. So it's free for the first ten days. And then based on brand size you'll be on different plans. So if you're not a Shopify Plus store then you have the option to start at just 19 a month for unlimited code generations. If you're a pastor, then you have to start at our higher tier plan, which we find that that a number of Nonplused also opt to go into and includes reporting and includes those integrations.

00:18:25:00 - 00:18:44:22
Unknown
And that's at 99 a month right now. Okay, definitely a no brainer to try it out and to get a feeling how good discounts will work in your business if you do it right before our coffee break comes on end, is there anything you want to share with our listeners that we haven't covered yet? Well, one thing is we're we're happy to offer a discount code for the first month.

00:18:45:00 - 00:19:13:09
Unknown
So we have the discount code coffee, which hopefully we could put in the end the link. And that'll give you 20% off your first month code coffee. And aside from that, I think the takeaway is run those strategic discounts. If you're really busy and you have a lot going on, you can still run them. Just do these. These standard ones that are are proven across the industry and setting them up, you really see that revenue just comes through the door.

00:19:13:09 - 00:19:39:08
Unknown
So that's always what I'm what I'm advocating for is you have this low hanging fruit of revenue that you could be making. Set it up. And I look forward to hearing from you about about the results, because it's I'm always excited to hear brands that are so positive about making more revenue without much extra effort. Yeah. And I think you'll your data from 182 million discount codes is proof enough that it works.

00:19:39:08 - 00:20:02:05
Unknown
And I will put the links in the code in the show notes. So then you will be just one click away. Where can people go and find you? You can find our App Book discount code bot on the Shopify store. You can find me either on on X Kara underscore Jacqueline I can give you that also to put in the links or my email is Kara at Segundo.

00:20:02:07 - 00:20:20:16
Unknown
I'm always happy to chat with merchants if you have any questions. Okay, all of these things will be in the show notes. So just scroll down and click and get in touch with Kara. Thanks so much for your time today. I think it's really a good overview of what you can do. Scoring codes. I'm definitely convinced that's the right way to go and help a lot of people will try it out.

00:20:20:17 - 00:20:21:19
Unknown
Thanks so much. Thanks.