28Nov
By: Ivan Kreimer November 28, 2016

If you would like to get more of your visitors to make a purchase from your store, then creating your first Shopify coupon might be the answer you were looking for.

But just throwing away discounts to all your visitors to force them to buy from you isn’t a smart thing to do. You need to know what products to discount, when to give them out, and how to create them the right way.

In this post, you will learn how you can start using coupons for your Shopify store so you can start making more sales right away.

Why Shopify coupon is a powerful marketing tactic

Coupons are without any doubts a smart and simple way to get more people to take action for one reason: people like coupons.

According to a study made by TSYS, 83% of consumers use coupons, while 85% of  them look for coupons before making a purchase.

Coupons also have a big impact in the pre-purchase decision-making process: according to a study made by Nielsen, coupons are the #1 factor that influences a purchase.

Besides being used by the majority of people and having a big influence on the purchasing habits of customers, they also help to increase the average order value on mobile transactions. As much as 77% of consumers spend between $10 to $50 more than they originally anticipated when redeeming coupons on their mobile.

Coupons don’t work just to make budget-sensitive visitors want to purchase. Ironically as it may seem, US households with incomes of $100K or more are twice as likely to use coupons as those earning less than $35K. Not only that, but college degree holders are twice as likely to use coupons as those who did not graduate from high school.

As you can see, coupons can have a big impact on your visitors and customers. The question now is: how can you use start using them to increase your sales?

How to use coupons the right way

We have established coupons are a great marketing tactic you need to use. That’s where most store owners stop reading and start creating Shopify coupon after coupon like crazy to start reaping the results.

Before you go and do that, I need to give you some bad news: using coupons can hurt your store if you don’t use them right.

Why? Mainly for one reason: price anchoring.

Price anchoring is a cognitive bias in which we tend to put more weight on the first piece of information offered when making a purchase decision.

I don’t want to get into all the nitty-gritty of how price anchoring works and why it exists. What you need to remember is this: if the first price your visitors see when arriving at your store is a discount, that price will “stick” into their heads. As a consequence, when they see the non-discounted price (i.e. the “real” price), they will assume it’s more expensive, and therefore, they won’t be willing to make the purchase, even if they can afford it.

And if they end up making a purchase, it may end up being one of the cheapest products in your line, or a discounted one. This will lower your average order value, which is one of the most important e-commerce metrics.

So instead of throwing coupons away as soon as someone visits your store, you need to focus on two things.

Focus on the value your customers get

Saving money is great, but it’s much better to help them realize the value they get if they purchase your products.

For example, if you sell bracelets, instead of saying “10% off any bracelet”, you could say: “Look amazing next time you go to work with our bracelets. Sign up and get 10% your first sale”.

That kind of message puts the discount as a secondary element in the offer while highlighting the value they get from the purchase.

Choose the right Shopify coupon for your store

There are many ways to offer coupons depending on the type of coupon you use. It’s not the same to offer free shipping than giving 10% off.

That’s because there are three main types of coupons:

  1. Free shipping coupons
  2. Percentage-off coupons
  3. Money-off coupons

All these coupons help customers save money on the purchase, the way they do it can make a big difference.

Free shipping coupons are probably the most common because they have been proven to have a big impact in the minds of the customers. A study made by Stitch Labs found that “retailers who always offer free shipping can directly increase revenue by 10%.”  In a survey from 2010, 93% of respondents said that free shipping encouraged them to buy more online.

On the other hand, percentage-off and money-off coupons are more explicit in the discount given to the customers. Percentage-off work best when you have a margin that’s common to the majority of your products, while money-off works more like a credit to your customers.

In my personal experience, I have found free shipping coupons to be the best for first time purchases, money-off for discount ladders (the ones you use on abandoned cart emails), and percentage-off for sales and special holidays.

Whatever you end up doing, remember this: it’s not about the discount, it’s about the value you give out to your customers while lowering the barriers to purchase.

Also, even if you don’t make much money on a sale (because you lost some money with the discount), remember it’s easier and cheaper to sell to a customer, than to a visitor who has never purchased from you.

How to create Shopify coupon in your store

We have seen how powerful coupons are, and how you need to use them to increase your sales.

Now it’s time to see exactly how you can start using them in your Shopify store.

The first thing you need to do is go to “Discounts”, and click on the “Create discount” button.

 

coupons

Once on the Discounts page, the first thing to do is to give your discount a name. I highly recommend you give it a cool and memorizable name, like “happy10” or “firstsaleonus”. This is especially useful during special events, like back to school and Christmas shopping, when you can be more creative and specific with your coupon names.

In this case, we are going to call this coupon “welcome10”, because it’s a welcome coupon that will give $10 off the first purchase.

coupon name

Now, you are going to choose the discount condition. This is probably the most important and usually misunderstood section of the discount creation process.

Under the first dropdown, you will choose whether you are going to use a money off, percentage off or a free shipping discount, in order of appearance.

discount-conditions

Then, you are going to choose how much money off you are going to give away. If you choose percentage off, you will set the percentage to discount. Finally, if you choose “Free shipping”, you need to set what’s the threshold (if you don’t know your free shipping threshold, follow the instructions from this article), and to which countries.

In case of this Shopify coupon, we will give $10 off.

discount value

Finally, you need to set to which products does this discount apply to. You have several options:

  • All orders
  • Orders over
  • Collection
  • Product
  • Product variant
  • Customer in a group

In this example, I will choose “All orders”, since I want to stimulate visitors to use it on any first purchase.

discount-conditions

Now it’s time to pick the coupon’s “usage limits”. If you want to increase the scarcity of your coupons (a great marketing tactic to use on any occasion), choose the second option and define the number of coupons to give out. If you want it to be unlimited, then keep the default option.

In this case, we will leave it as it is.

Now you will have to choose whether to limit the coupons use per customer or not. I’d highly recommend you tick the box to limit each coupon per customer. Otherwise, your customers may abuse your coupons, which will make you lose money on every sale.

usage limits

Finally, you need to decide if you want this Shopify coupon to be time sensitive or not. Just as I said previously, if you create a time sensitive coupon, this may induce your visitors to get it and use it as soon as possible.

However, in this example, I will leave it as it is, without an end date.

Now, just click “Save” and you are done!

coupon creationImportant note: It’s important to notice that once you create a coupon you can’t change it. You can pause it, or delete it, but not change it.

There are a number of apps that can help you promote your coupons. Some of these apps are:

Now you know how to set up your first Shopify coupon 

If you follow the steps laid out in this article, you will be able to create coupons that will help you drive more sales and revenue.

Always remember to focus on the value you give out to your customers. Shopify coupon is nothing but a marketing tactic. People don’t buy marketing tactics, they buy solutions. If you lower the hurdles to that solution through the use of coupons, your visitors will start buying from you.

Have you ever used coupons for your e-commerce store? If so, what was your experience? Which Shopify coupon did you try? Leave your thoughts in the comments below!