Offering Shopify discount codes for your customers might be a good marketing strategy. But in the future, online merchants will have to decide whether to offer discounts, when and how much of a discount should be offered .
Offering discounts can be a powerful weapon to your online business. But it can do great damage to your brand unless you use them carefully.
In here, you will be aware of the pros and cons of offering deals in your online store and how to use Shopify discount codes in a most effective way.
How to gain customer retention with Shopify discount codes?
Customer retention is a one fact that decides the reliability if a store. You have to make sure that the customer do not defect to another store or a brand.
When it comes to online retail, the customer advocacy plays an important role. So focusing on what is best for customers is the most beneficial and effective thing for a brand.Because it is important that the customer is consistent with your brand based on their experience of interacting with you.
The most effective way to drive customer loyalty is to offer convincing deals and discounts.
Pros and Cons of using Shopify discount codes in online stores
You can increase customer loyalty through offers and deals. But when using offers, you have to think twice.
Pros of online store offers
Increased conversions.
Increased customer acquisition and loyalty.
Quickly move stocks
Meet sales goals.
Easy and quick to implement natively in Shopify or using apps.
Easy to track with Shopify’s Discounts Reports.
Cons of online store offers
Decreased conversions outside of sale periods because they wait for offers.
Attract customers outside your target market.
Decreased margins and profitability.
Possible brand damage.
Tendency to drive price-driven or non-loyal shoppers.
Tendency to reduce average order size.
What are the right offers, coupons and discounts for your brand?
Offers and discounts can do wonders in your online business. Because they either make your brand sales hit the roof or go down the drain. So what’s more important is to make your strategies right.
Suppose you have slimmer margins and want to position yourself as a higher-end brand. Then it is okay for you to stick with customer loyalty offers.
But if you have healthy margins, you have other options. Such as selling low priced products in larger quantities. So you can try giving deep discounts and hold weekly sales. But you should follow these while staying competitive.
In online business, the best approach to choose what works the best is experimentation.
Types of offers, coupons, and discounts
Let’s take a look at the most common types of offers and discounts.
Percentage-based discount
Dollar value discount
Free shipping
Free gift
Percentage-based discount
One of the most common ways of offering discounts. From small incentive to higher percentages like 50% can be used to boost the sales. Can easily apply to multiple collections, production and locations in Shopify. And also offer them based on a specific purchase, like “Buy two sneakers, get 50% off any sweater.”
Dollar value discount
Pair one of these with a minimum purchase amount to increase its impact, like “Spend $200, get $20 off.”. This offers make people feel like they are wasting money if they don’t use it.
When deciding between a percentage and a fixed amount discount, you have to keep in mind about the rule of 100. If your product costs less than $100.00, use a percentage discount. If it is higher, use a fixed amount discount. This is a psychological trick that will result in the highest perceived value for your customers.
Free Shipping
Shipping cost can make people turn away from online purchasing. Hence, offering free shipping may increase your average order value. You can set this up as a shipping setting in Shopify. You can even combine your free shipping offer with a 20% Shopify discount codes for email subscribers.
Free gift
A free gift with a purchase will gain the attention of customers if used strategically. It can also be used to get rid of product that isn’t moving. You can set a minimum purchase requirement or a volume requirement to get a Shopify discount code.
Each of these can be offered using two different types of discounts:
- Automatic discounts
- Discount codes
Automatic discounts
These are applied to very eligible cart. Customers are able to view them on the cart page before they start the checkout process. So it does not require to enter a discount code.
This adds up to smoother experience for your customers. As a result you get potentially higher conversion rates.
Skipping the code can help encourage orders, and speed up checkouts too.
In September 2019, U.S. customers who checked out on Shopify with a discount were 1.8 times more likely to place an order without a discount. And they checked out 25 seconds faster with an automatic discount compared to a Shopify discount code.
Discount codes
Discount codes are codes that your customers enter during the checkout process to redeem a specific offer. They’re a tried-and-true way to offer discounts to the right people.
Using Shopify discount codes can also help you track the success of your marketing efforts. Creating a separate discount codes for each campaign can help you see the relative impact on sales.
How to gain customer retention and drive sales
There are a hundred and one ways you can use sales, offers, discounts, and deals to drive customer loyalty, acquisition, and conversions.
- Weekly/monthly discounts
- Pre-launch offers
- Holiday and seasonal deals
- Abandoned cart offers
- Email/newsletter subscription offer
- Incentives for liking, following, and sharing on social media
- Referral promos
- First-time shopper offer
- Minimum purchase discount
- Exclusive social offers
- Customer loyalty offers
- Exit intent offer
- Re-targeted promotions
- Influencer offers
- Customer loyalty program membership incentives
- Offers for purchasing online
- Coupons for purchasing in-person
- Event attendance offers
- Customer milestone discounts
Weekly/monthly discounts
This is the traditional way to use in order to meet business goals at the end of the month or quarter.
Example: The online photo department at Walgreens has weekly sales and coupon codes and ongoing promo codes at the bottom of the page.
Prelaunch offers
Suppose you are in the pre-launch stage. You can motivate visitors to purchase from you by offering Shopify discount codes.
Example: A boutique offers free $25 gift cards in exchange for customers’ email addresses. They initiated this by manually reaching out to potential respondents on LinkedIn.
Holiday and seasonal deals
The whole year includes several national and commemorative holidays. You can use these opportunities to offer Shopify discount for your customers.
Example: An online store regularly makes use of holidays to promote offers to their visitors and customers. They promotes the offers on their email, social media, markets, and on their website.
Abandoned cart offers
Around 70% of all people abandon their carts. Abandoned cart email offers can be a powerful tactic to make them return. Shopify natively has abandoned checkout recovery functionality. For everyone else, or if you want more customization and analytics, check out Klaviyo.
Example: A brand-less online grocery store sends out abandoned cart emails along with a free shipping offer after cart abandonment. This motivates visitors to complete their checkout process.
Email/newsletter subscription offer
It is extremely important to maintain an email list for online retailers. Providing an offer in exchange for visitors email addresses might increase the chance of conversion. This will give you the opportunity to build a relationship, foster customer loyalty, and market to them in the future.
Example: An online retailer offers a coupon for 18% off your purchase for subscribing them.
Incentives for liking, following, and sharing on social media
VOC or in other words, Voice of the Customer is might be very beneficial for any business. You can give special offers for the customers for sharing your store with their social circles. On the other hand, this will attract new customers.
Example: An online clothing store offers customers $9 off their next purchase in exchange for visitors sharing about their experience with the store.
Referral promos
A recommendation from a friend or family can be more effective because it is more reliable than any other promo. Use this to your advantage and encourage referrals. You can choose to give a deal to both people involved.
Example: An meal delivery brand use referral marketing very effectively. Customers are gifted promo codes often.
So they can share them with friends and family. They are able to redeem their first box for free or a discounted price. Simultaneously, the referrer also get a free gift or a discount.
First-time shopper offer
Providing offers for first-time shoppers can make them return.
Example: An online store provides first-time visitors with a 30% discount on contact lenses and free shipping.
An online manufacturer of mobile phone cases, offers 15% off for your first purchase.
Minimum Purchase Discount
Do you want to make your customer spend more? Or is there a product you want them to focus on? If so, what you have to do is to offer some discount for a minimum number of purchases.
You can calculate your average order value for the previous few months and offer a discount or free shipping on all orders 10–20% over your average order value.
Example: A popular online retailer offers free shipping for orders over $150.
Exclusive social offers
Providing exclusive offers on your social networks can be very effective to build customer loyalty. And also to attract new customers and subscribers on your social channels. As a result you can expand your market.
Example: An online natural skincare retailer offered an exclusive offer of 10% discount for their Twitter followers.
Customer loyalty offers
Rewarding your loyal customers with a discount can make your bond with them stronger. You can easily make Shopify discount codes exclusive to specific groups of customers.
It can be as simple as sending your best customers a personal email with a discount or credit.
You can try;
Sending email offers through an email marketing apps
implementing a customer loyalty program like LoyaltyLion.
Example:In an online store membership program, members receive 10% discount for full-price purchases.
Exit intent offer
A last-second offer can make a visitor turn into a customer. An exit intent offer will pop up just as your visitor is about to leave.
Example: An online auto accessories store displays an exit intent offer through pop-up. They offer a discount in exchange for your email. If users abandon the shopping cart, they will get an abandoned cart email with a higher discount.
Re-targeted Promotions
You can offer Shopify discount codes for the people who have visited your store before. This will remind them to return and purchase again from you.
Example: An online store use offers several times throughout the buying process to gain customers. They use re-targeted ads that provide 20% off for the next purchase.
Influencer offers (bloggers, celebrities etc.)
Partnering with influential people can be a very effective because they have a large number of followers. So you can provide them exclusive Shopify discount codes and make them turn into your customers.
Example: An online pet care forum provides influencers an offer code to share with their followers. They are able to track and monitor through this code. So they know which influencers are most effective.
Customer loyalty program membership incentives
You can motivate your customers to join your customer loyalty program by giving Shopify discount codes as rewards.
This is the time to consider to have a program, if you do not have one yet. According to a report by Forrester, customers who belong to loyalty programs spend $42.33 more over the course of three months.
Example: An online store provides a discount for the customers who joined the customer loyalty program. They can redeem the reward online or in-store.
Offers for purchasing online
Want to use your eCommerce site to supplement your brick-and-mortar sales?
Or create a customer base outside of Amazon ?
Then you may drive online conversions by offering Shopify discount codes in return.
Example: A sports equipment store provides their visitors with a special offer on their website homepage. They expect to get customers to come to the store to pick up their purchases. They use this opportunity to promote their other product too.
Coupons for purchasing in-person
Just as you can drive online sales with offers, you can also drive in-person sales. This can be at your brick-and-mortar location or at in-person events.
Example: A house-ware store sends coupons with discounts for in-store purchases. They also provide a relatively longer duration to purchase.
Event attendance offers
Rewarding the attendees of your events with Shopify discount codes or free gifts might be helpful to maintain the bond with engaged customers. Because, it’ll encourage them to attend for your next event.
Example: An online pet care forum held a pet owners gathering and offered them exclusive Shopify discount codes for both in-person and online purchasing.
Customer milestone discounts
Customer-brand milestones are especially important in a customer loyalty program. These milestones could be personal to the customer, such as a birthday or anniversary. Other milestones can be the date they joined your program or the first purchase. You can offer them Shopify discount codes for the commemoration.
Example: An online retail store provides special discounts for customers on their birthday and on the day they joined their customer loyalty program.
Make the most of your offers, coupons and discounts
Offers and discounts are not used whenever or however you want. So if you understand your priorities, you can effectively use Shopify discount codes and other offers. Willingness to experiment will make it easier to go step by step.
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