A Comprehensive Guide for Setup Shopify Discount Code

Savvy Shopify store owners know the power of strategic discounts for driving conversions and repeat purchases. According to Bloomberg, around 55% of shoppers report having a more favorable view of retailers and brands that provide coupons and discounts. The good news is Shopify makes it easy to configure compelling percentage-off promotions, free shipping deals, and targeted coupons right within your store settings.

In just minutes, you can have professional-grade capabilities in place for attracting and retaining customers. This article will walk through exactly how to enable the platform’s robust discount tools for increasing cart value and overall sales.

Let’s take a profitable dive into the setup behind situational savings.

What is Shopify Discount Code?

A Shopify discount code is a special code that customers can enter at checkout on a Shopify store to receive a discount on their purchase. This discount can be in the form of a percentage off the total cost, a fixed dollar amount reduction, a buy-one-get-one-free offer, or free shipping. These codes are created by store owners to encourage sales, attract new customers, or reward repeat customers.

Shopify Discount Code

Effective use of Shopify discount codes can bring you a lot of beneficials:

• Increase Sales: Discount codes can incentivize customers to make a purchase, potentially increasing overall sales volume.
• Attract New Customers: Promotional discounts can attract new customers who might be hesitant to try your products or services at full price.
• Clear Inventory: They can be used strategically to clear out old or excess stock.
• Boost Customer Loyalty: Offering exclusive discounts to repeat customers can enhance their loyalty and encourage continued business.
• Marketing Tool: Discount codes are effective for marketing campaigns, helping to track the success of different promotional strategies.
• Encourage Larger Purchases: By setting minimum purchase requirements for certain discounts, you can encourage customers to buy more.
• Seasonal or Event Promotions: They are great for capitalizing on seasonal shopping trends or special events, creating a sense of urgency.
• Customer Engagement: Discounts can be used as part of customer engagement strategies, like social media contests or email sign-up incentives.

Types of Shopify Discount Code

Percentage Discounts

Percentage Discounts

This discount type offers a specific percentage off the price of items or the total order value. For example, a 20% off code on all products or selected items.

• Ideal Use Cases: Perfect for broad promotions like Black Friday sales, encouraging larger purchases, or as a reward for customer loyalty or first-time buyers.
• Pros:
  • Easy to understand and attractive to customers.
  • Versatile for different types of promotions.
• Cons:
  • Can potentially reduce profit margins significantly if not carefully planned.
  • Risk of devaluing products if overused.

Fixed Amount Discounts

This code deducts a fixed dollar amount from the order, like $10 off any purchase over $50.

• Ideal Use Cases: Effective for incentivizing a minimum spend, which can increase the average order value.
• Pros:
  • Encourages customers to spend more to reach the discount threshold.
  • Offers direct, understandable savings.
• Cons:
  • Might not be as compelling for high-ticket items.
  • Less appealing for smaller purchases.

Buy X Get Y Discounts (BOGO)

Buy one get one free. Source: BBC News

Commonly known as “Buy One, Get One Free” or similar variations. This discount encourages purchasing in multiples, like buying two items and getting a third free.

• Ideal Use Cases: Useful for clearing inventory, introducing new products, or bundling products.
• Pros:
  • Encourages bulk buying.
  • Can be used to promote less popular products alongside bestsellers.
• Cons:
  • More complex to communicate and set up.
  • Might lead to quicker depletion of stock than anticipated.

Free Shipping Discounts

This discount removes shipping costs, either entirely or after a certain spending threshold is met.

• Ideal Use Cases: Best for attracting new customers, reducing cart abandonment, or as a competitive advantage.
• Pros:
  • Highly valued by customers, especially for international orders.
  • Can be a deciding factor in purchase decisions.
• Cons:
  • Cost implications for the business.
  • Might not be effective in regions where free shipping is already a norm.

Conditional Discounts

These are discounts applied under specific conditions, like discounts for students, military personnel, or on specific days (e.g., “Monday Blues” sales).

• Ideal Use Cases: Targeted promotions, customer segmentation, and loyalty programs.
• Pros:
  • Allows for targeted marketing.
  • Can be aligned with specific business goals and customer segments.
• Cons:
  • Requires more strategic planning and customer insights.
  • Risk of alienating customers who do not meet the conditions.

Step-by-Step Guide to Creating Discount Codes

Step 1: Access Your Shopify Admin

• Log in to your Shopify account.
• Navigate to the Shopify Admin dashboard.

Step 2: Go to the Discounts Section

In the Shopify Admin, find and click on the “Discounts” section. This is usually located on the left-hand side menu.

Step 3: Create a New Discount Code

• Inside the Discounts section, click on “Create discount” at the top right corner.

• Choose the discount type you want to create from the options provided.

Step 4: Enter Discount Code Details

• Name Your Discount Code: Enter a name for your discount code. This is the code customers will input at checkout (e.g., SUMMER20).

• Set the Discount Value: Enter the percentage or fixed amount of the discount.

• Apply to: Decide whether the discount applies to all orders, specific products, or shipping discounts. These options may different due to the discount type you choose in the previous step.

Step 5: Configure the Discount Conditions (Optional)

• Minimum Requirements: Set conditions like a minimum purchase amount or a minimum quantity of items.

• Eligible Customers: Specify if the discount is for all customers, specific customer groups, or individual customers.

• Usage Limits: Set limits on how many times the discount can be used in total or per customer.

Step 6: Set the Active Dates

Choose the start date and end date for the discount. You can also leave it to start immediately and without an end date.

Step 7: Review and Save

• Once you’ve configured all the settings, review them to ensure accuracy.
• Click on “Save” to activate the discount code.

Discount Strategies

Offering discounts and promotions is a great way to generate more sales and customer excitement on your Shopify store. However, it’s important to use discount strategies thoughtfully so as not to undercut your pricing model or profits. Here are some effective ways to offer discounts on Shopify:

Limited-Time Sales

Create a sense of urgency and get shoppers to take action using temporary sales. Offer a site-wide 20% off discount during major holidays, or a 50% discount on specific products for 72 hours only. Include a countdown timer to prompt fast purchases.

• Example: “Weekend Sale: 20% off all items!”
• Advantages: Encourages quick decision-making and can boost sales in a short period.
• Considerations: Overuse might make customers wait for sales, potentially slowing regular-priced sales.

First Purchase Incentive

Provide new customer savings with a 10-20% one-time discount code that gets automatically sent after a customer creates an account or signs up for your email list. This encourages customers to return and build purchasing habits.

• Example: “Welcome Offer: 15% off on your first purchase!”
• Advantages: Attracts new customers and encourages them to make their first purchase.
• Considerations: Needs to balance acquisition cost with long-term customer value.

Loyalty or Membership Discounts

Reward repeat customers by providing exclusive savings through your loyalty points program. Offer free shipping, products discounts, or early access to sales when customers reach certain point milestones.

• Example: “Members get an extra 10% off on all items.”
• Advantages: Enhances customer loyalty and encourages repeat business.
• Considerations: Requires a system to track and manage memberships or loyalty status.

Volume Discounts

Offer tiered savings when customers order multiple quantities of a product. Provide a 5% discount on 2 items, 10% off for 4 or more items. Encourages larger purchases per cart.

Costco Coupon. Source: Costcontessa

• Example: “Buy 2 get 10% off, Buy 3 get 15% off.”, “Buy 5 save $20, Buy 10 save %50.”
• Advantages: Encourages larger purchases, increasing average order value.
• Considerations: Needs careful pricing strategy to maintain profit margins.

Bundling Deals

Create pre-assembled bundles with multiple complementary or high-margin products to provide an attractive package discount. This increases average order value.

• Example: “Buy a camera and get 20% off on accessories.”
• Advantages: Can move more products and increase average transaction value.
• Considerations: Bundled items need to be complementary and appealing as a package.

Flash Sales

Flash sales are limited-time offers that typically last for a very short period, like a few hours or a day. They offer significant discounts or exclusive deals.

• Example: “Flash Sale: 30% off for the next 3 hours!”
• Advantages: Creates excitement and urgency.
• Considerations: Risk of customer frustration if the timing isn’t right or stock is limited.

Conditional Discounts

These discounts are applied only when certain conditions are met, such as a minimum purchase amount, buying specific items, or purchasing during certain times.

• Example: “Get 15% off on orders over $100.”
• Advantages: Can be used to drive specific customer actions.
• Considerations: Conditions should be clear and easily achievable.

Exit-Intent Discounts

These are special offers presented to users showing signs of leaving a website without making a purchase, often triggered by cursor movements towards closing a tab or window.

Exit Intent Popup Example. Source: Hubspot.

• Example: “Wait! Get 10% off if you complete your purchase now.”
• Advantages: Can reduce cart abandonment rates.
• Considerations: Shouldn’t be too intrusive or it might negatively impact the user experience.

Seasonal or Holiday Discounts

These are discounts offered during specific seasons or holidays, like Christmas, Black Friday, or summer sales. This discount is used to capitalize on times when customers are more inclined to shop and to create thematic marketing campaigns.

• Example: “Black Friday Specials” or “Summer Clearance Sale”.
• Advantages: Capitalizes on times when customers are more willing to spend.
• Considerations: Requires alignment with seasonal trends and inventory management.

Promoting Discount Codes

Promoting discount codes effectively is crucial for maximizing their impact and driving sales. Here’s a guide to some of the best strategies for promoting discount codes:

1. Email Marketing

• Targeted Campaigns: Send discount codes to your email list, segmenting the audience for personalized offers.
• Newsletter Inclusion: Regularly include discount codes in newsletters to keep your audience engaged and looking forward to your emails.

2. Social Media

• Timely Posts: Share discount codes on your social media platforms. Consider timing these posts to coincide with peak user activity times.
• Influencer Partnerships: Collaborate with influencers who can share your discount codes with their followers.

3. Website and Online Store

• Homepage Banners: Display banners or pop-ups on your website promoting the discount codes.
• Checkout Prompts: Suggest relevant discount codes at checkout to encourage add-on purchases or upselling.

4. Paid Advertising

• Online Ads: Use Google Ads, Facebook Ads, or other platforms to promote your discount codes to a wider audience.
• Retargeting Campaigns: Implement retargeting ads that display discount codes to users who have visited your site but didn’t make a purchase.

5. Collaborations and Partnerships

• Partner with Other Brands: Partner with complementary businesses to share discount codes with each other’s audiences.
• Affiliate Marketing: Use affiliates to promote your discount codes, offering them a commission for every sale made through their unique code.

6. Blogging and Content Marketing

• Blog Posts: Write blog posts that include or focus on the discount codes, potentially tying them to relevant topics or trends.
• SEO Strategies: Optimize content for search engines to increase the visibility of your discount codes.

Track Sales from Discount Codes

Tracking sales from discount codes is crucial for understanding the effectiveness of your discount strategies and making informed decisions about future promotions. Here’s how you can track sales from discount codes, particularly in a Shopify context:

• Create Separate Codes: Rather than using a generic code like 10%OFF, create individual discount codes for each promotion, such as CYBERMONDAY20, SUMMER50, FIRSTORDER15. This way you can easily filter performance reporting by code.
• Integrate Analytics Tools: Add the Discount Code field into your sales reports and segmented filtering to analyze revenues, conversions, margins, and other metrics per discount code. There are several tools to help you to analyze the effectiveness of your discount campaign.
  • Shopify Analytics: Shopify provides built-in analytics that can track the usage of discount codes. You can see how many times a code was used, the total value of orders using the code, and more.
  • Google Analytics: Integrate Google Analytics with your Shopify store for more detailed tracking. Use UTM parameters for each discount code in your marketing campaigns.
• Monitor Sales and Conversion Rates
  • Sales Tracking: Check the total number of sales made using each discount code
  • Conversion Rate: Analyze the conversion rate, i.e., the percentage of visitors who made a purchase using the discount code versus those who just visited the site

• Evaluate Average Order Value (AOV): Determine if the discount codes are encouraging higher order values. Compare the AOV with and without discount codes.
• Analyze Customer Behavior: 
  • Customer Segmentation: Look at which customer segments are using the discount codes more. This can help in tailoring future promotions.
  • Repeat Purchases: Track if the discount codes are leading to repeat purchases or attracting one-time deal seekers.
• Assess Profit Margins: Evaluate how the discounts are impacting your profit margins. It’s important to ensure that the increased sales volume compensates for the lower profit per sale.
• Optimizing Promotions: Look for low performing codes that are not generating sales. Consider boosting their promotional messaging or restricting them only to high-value customer segments where they see better redemption.

Conclusion

Implementing and managing discount codes is a nuanced but highly effective strategy for any Shopify store owner looking to boost conversions, attract new customers, and foster repeat purchases. Shopify’s user-friendly platform provides the tools to easily set up a range of discount types, from percentage-off deals to free shipping offers, catering to various customer needs and shopping behaviors.

However, the key to success lies not just in creating these discounts but in deploying them strategically. You need to balance the allure of discounts with the sustainability of your business model. Monitoring the performance of each code is crucial, as it helps in understanding customer preferences and adjusting your strategies for maximum impact.

So, take this knowledge, apply it with insight, and watch as your Shopify store reaches new heights of success and customer satisfaction.