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A Step-by-Step Guide on How To Set up Shopify Discount Codes

ByNitesh Chand

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The trend of buying online has seen remarkable growth in recent times. A 2021 report from CouponFollow highlights that online shopping reached an impressive $861 billion in 2020, a notable increase from previous years.

For Shopify store owners, this trend is particularly significant. By integrating discounts and promotional offers into their strategy, these businesses are tapping into the minds of budget-conscious customers. This approach has effectively boosted sales and attracted a specific customer base that values smart spending.

In this guide, we will take a deep dive and understand the essence of Shopify discount codes, types of coupon codes, and ways to develop a discount code strategy with a few real-life examples.

Table of contents

What are Shopify discount codes?

Shopify discount codes are unique discount codes set up by store owners through Shopify's administrative dashboard. Customers can use these codes at checkout to get discounts on their orders.

These specific discount codes can be customized with specific rules, such as a minimum purchase requirement, usage limits per customer, or an expiration date. They are mainly used to promote the store, boost sales, and thank regular customers.

Types of Shopify discounts

Now that we've looked at the psychology behind Shopify discount codes let's explore the different types of discounts to help you set clear goals.

1. Flat discount: Flat discounts offer a default amount off the total purchase, like $10 off, making it straightforward and easy for customers to understand the savings.

2. Percentage discount: Percentage discounts provide a certain percentage off the total cost, such as 20% off, which can vary in savings depending on the total amount spent.

3. Buy X get Y discount: With this deal, customers buy a certain number of items (X) to receive another item (Y) for free or at a discounted rate, encouraging larger purchases.

4. Free shipping discount: Free shipping discount removes the shipping cost for customers and are often used as an incentive to reach a minimum purchase amount. This makes it attractive for those looking to save on delivery charges.

Why should you offer discount codes on your Shopify store?

Here's how Shopify discount codes can benefit your online store in different ways:

1. Customer engagement: Offering discount codes in your Shopify store is a brilliant way to attract new customers and retain existing ones. By providing these savings, you create an inviting shopping atmosphere that boosts customer satisfaction. Customers who feel valued are more likely to return, fostering a deeper connection with your e-commerce store and increasing customer lifetime value.

2. Sales and marketing effectiveness: Utilizing discount codes in your Shopify store can increase conversion rates. These discounts are not only attractive to potential buyers, turning them into actual customers, but they are also excellent for generating sales during seasonal promotions or special events. This marketing strategy helps your store stand out in a competitive market.

3. Business intelligence and strategy: Implementing discount codes is a smart way to clear out inventory that isn't selling. Moreover, the data gathered from these promotions can offer insightful customer behavior analysis. Shopify store owners can use this information to better understand customer motivations, sell an individual product, and guide future business strategies and decisions.

4. Specialized promotional tools: Automation of discounts in your Shopify store via different apps and tools allows you to customize promotions to different customer segments and improve their shopping experience. Additionally, integrating these discounts with abandoned cart recovery tactics presents an effective way to re-engage customers who left items in their carts. This encourages them to complete their purchases and also addresses a common challenge in online retail.

How to set up discount codes on your Shopify store

Now that you understand the importance of offering discount codes on the Shopify store, let us understand how to set it up quickly.

Step 1: Access the discount dashboard

Head over to your Shopify Admin dashboard. Once there, go to the 'Discounts' section and hit the 'Create discount' button.

Step 2: Select the discount type

You have several discount options to consider. Here's a list of the types you can offer:

  • 'Amount off products' lets you slash prices on specific products.
  • 'Amount off order' is where you reduce the total order cost.
  • 'Buy X Get Y' is a clever one - buy a certain amount and get a discount on something else.
  • And 'Free shipping' is exactly what it sounds like, offering the delivery for free, sometimes limited to specific countries.

Step 3: Choose between automatic and manual discount

Shopify allows you to choose between automatic and manual discounts. Automatic discounts get applied to the cart value automatically once it becomes eligible for a discount.

Manual discounts on the other hand need discount codes to be applied to avail of the discounts.

Step 4: Configure the discount details

This is where you define the specifics of your discount. Each type of discount follows this basic flow, but keep in mind the unique touches each one requires. 'Buy X Get Y,' for example, needs you to specify which products are involved in the offer, while 'Free Shipping' focuses on criteria like eligible countries and minimum purchase requirements.

Begin by deciding on the minimum purchase requirements for your Shopify discount, determining the amount or item count needed to qualify. Next, specify who is eligible for the new discount and set limits on the maximum quantity and usage frequency. Remember to set the start and end dates for when the offer is active.

Choose whether the discount is a specific monetary amount or a product discount and decide if it will be applied automatically or manually. Provide a title for the discount that customers will see during checkout, set the value as either a percentage or a specific amount and define which products or collections are eligible. Finally, determine the discount's availability across different sales channels and its potential combination with other product or shipping discounts.

Step 5: Saving and sharing the discount

Click on 'Save discount,' and you'll see a summary of what you've just created. For manual discounts, you'll get a link that you can share, inviting customers to take advantage of your great deals.

Best practices to follow when offering a discount

Let’s explore some effective Shopify discount code strategies that can help you maintain your store’s performance and connect better with your customers.

  • Set usage limit and expiry date for first-time buyers to create urgency, apply minimum purchase requirements, and establish eligibility criteria to target particular customer groups or products.
  • Determine the exact active dates for these discounts with the help of social media and email campaigns, ensuring they align with your sales strategy and objectives.
  • Utilize customer data platforms and analysis to segment audiences and create personalized discounts that resonate with their preferences and habits.
  • Use Shopify discount code generator apps to automate special occasion discounts, like birthdays. These apps can create unique codes in bulk, which you can then distribute to customers on their special days via SMS.
  • Integrate your discount strategy with email marketing for direct outreach and use analytics to track the success of your campaigns and refine future efforts.

Case studies of successful Shopify discount codes

Now that we have a thorough grasp of Shopify discount codes, let us look at some real-life examples that reflect their positive attributes.

1. Skinny Dip

Skinny Dip, a Shopify store, held an enticing sale offering customers 30% off on all items. To sweeten the deal, they provided an extra incentive: shoppers could use the discount code MONDAYMADNESS at the checkout cart for an additional 10% off their entire order. This strategic use of layered discounts exemplifies how Shopify stores can leverage percentage discount codes to boost sales and delight customers.

2. LancĂ´me

Lancôme, through their Shopify presence, hosted a special offer that perfectly captures the 'gift with purchase' discount strategy. For any purchase worth $39.50, customers were treated to a free gift with coupon code FREE GIFT, adding substantial value to their shopping experience. This type of promotion is a great move for Shopify store owners using the attraction of a high-value freebie—advertised as a $174 value—to increase purchases and enhance customer delight.

3. Digismoothie

Digismoothie, another Shopify store, ran a sale where customers enjoyed layered discounts at checkout. They automatically received $12.99 off with an 'AUTOMATIC10OFF' discount, and a gift card code 'HC5F' further reduced the total by $10. This past promotion shows how combining automatic discounts with gift cards can lower the final price, offering customers a compelling savings incentive.

Conclusion

Crafting an effective new code strategy for your Shopify store can significantly boost your business. By offering a well-thought-out and valid discount, you're attracting new customers and also keeping your existing ones engaged and satisfied. This approach can lead to an increase in sales, create customer loyalty, and encourage repeat business. Plus, happy customers are more likely to refer others, helping to expand your customer base. Essentially, it's a shared journey of growth and connection between you and your customers.

FAQs

Discount codes are important because they improve customer engagement, boost sales, and provide insights into customer behavior. They're also tools for attracting new customers, rewarding loyalty, and standing out in a competitive market.

You can offer various types of discounts, including flat rate reductions, percentage off, buy X get Y deals, and free shipping. Each type serves different strategies to encourage purchases and customer engagement.

This may happen if discounts mainly appeal to bargain seekers. To encourage repeat business, try offering discounts that reward loyalty, like special codes for second purchases or exclusive deals for returning customers.

To make sure your discounts are truly beneficial, focus on strategic timing and targeted offers. Use discounts to clear out inventory without undercutting your new or best-selling items. Also, monitor the redemption rates and sales during discount periods compared to your usual business days.

What should you do next?

Thanks for reading till the end. Here are 3 ways we can help you grow your business:

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