There are certain segments of abandoned carts where you can offer discounts with the fewest tradeoffs (TL;DR, non-customer leads), so here’s 3 major coupon strategies to align your overall marketing goals.
“Miss Mencken, coupons work.” – Don Draper, Mad Men
After ruling out every other possible risk reversal and value-added alternative, sometimes that discount is the most effective way to get a lead to risk their money on a company they’ve never bought from.
Remember, this abandoned shopper’s context is that they're likely at the Lead Decision stage and have already made up 90% of their mind with your product. Now they just need you to offer your hand once more to build their trust to step forward.
Let’s talk about the types of coupon offers you could utilize in this Abandoned Cart email series for non-customers. The discounts you use depend on the long-term marketing goals that best align with your business.
I’m kind of ranking these according to difficulty of implementation:
One-time use coupon generation keeps your great coupons off of sharable sites like RetailMeNot, creates urgency around the expiration date, you can personalize the offer by putting the customer’s first name into the code.
But coupon generation can be complicated to implement, and the specific coupon generator you use might not have the features and settings you need.
Like the example above, I’d recommend creating a static coupon code in your shopping cart that LOOKS like it could be one-time generated.
This means that you can get the first version of your Abandoned Cart coupon series launched quickly, without being hampered by technology.
Here's my recommendations to make the static coupon code simple and actionable:
Keep an eye out for codes being shared on RetailMeNot by occasionally checking coupon sites, or by checking customers who use this coupon against whether they were actually enrolled into the email campaign that sends it.
The random characters should help to make it appear generated, but after enough time and shopper interaction the code might get shared on coupon sites.
Here's the steps for replacing this code with a new one:
This is the simplest discount for the customer to understand and emotionally process so that they can take action.
The goal of this strategy type is to simply close the sale. You're ignoring regards for protecting your product margins, basket size, and perceived product value in order to do what it takes to get an order.
The other two strategies will require the customers (or you as a business owner) to do a bit more planning. But a standard 15% off or $20 off the entire cart is an easily grasped way to close an abandoned cart sale.
A word of caution when using a Fixed Amount discount of $20 or $50 is to make sure you set a minimum purchase amount on the cart, and then clarifying that in the email fine print. (I've worked with a lot of clients who've actually neglected to apply this so it bears mentioning so you don't accidentally getting a bunch of $3 orders to buy your cheapest products.)
A common question is whether a % off or $ off is more effective. This is actually more a matter of emotional impact and the feeling your customers get than one of simple math.
If your average order value is such that 20% off and $40 would be the exact same discount amount, one discount type will likely "feel" better to your customers than the other one. They'll instinctively feel like they're getting a better deal, even if they do a math and realize it's the same.
If you've never experimented around which discount types works better for your customers, then you can split test two different versions of this content or just take a guess for now and change it later.
A simple "Buy One Get One" coupon would also fall into this strategy of getting the sale closed, since you're basically setting the precedent of selling your products for half price. (In Shopify, you can accomplish this through their default "Buy X Get Y" coupon or specific apps like Discount Ninja and Discounted Upsells‑ Cross Sell which offer more control)
This might close the sale but it also might develop a habit for the customer of only waiting for these kinds of sales to come around before buying again. This risk is true of simple BOGO, % Off, and $ Off coupons.
Free shipping, free tax, or a free ancillary product that basically costs you nothing are all effective uses of this strategy.
The goal of this strategy is to reduce the price of the order but without affecting the price and perceived value of the core product.
You're discounting around your core product, but not the product, itself. This sets an easier precedent for getting full price on the customer's second order since you didn't lead with a straight %/$ discount on your main offering.
Since Amazon has created the expectation that shipping is free and fast, I would try to offer free shipping by default to remove friction. However, I understand that weight or customs fees can make this impractical for some businesses and that's where this coupon type can close the sale. (If you're a Unific and HubSpot user, then you can also use the Total Value of Abandoned Cart property to only send this free shipping offer to abandoned carts above a certain value)
You can also give free sales tax. Shopify doesn't have a native coupon type for this so you could just create a 10% discount code like free_national_salestax_9jr52 and tell a story around how you wanted to put it high enough to cover anyone's sales tax in the entire country. Sure, it's just a 10% discount code, but now you're wrapping it in a special story that doesn't appear to discount the product, itself.
Finally, you can use a coupon code that gives a free ancillary product bonus to a customer making a purchase. In Shopify you can use the "Customer Gets" section of a "Buy X get Y" coupon to deliver the specific product that's basically free to you.
You don't want to have to specify a particular product or collection the customer has to buy before getting the product bonus. Since Shopify doesn't natively have an "All Products" collection, you'll quickly make a collection using a condition of "Product price is greater than $50" as shown below, or some criteria to that effect (make sure you turn off the default channel visibility in the top right when you create it: this is a "behind the scenes"-only collection):
Besides low-cost ancillary products, other good candidates for the "free bonus" coupon type are lower priced 3rd party products you resell, so as to show you giving away a 3rd party's product and not diminishing the value of the products you make in-house.
These are methods to stay out of competing in the "low price leader" game.
Giving discounts to customers who will spend above your typical order amount and "Buy X Get 1 Free" offers are good examples of this strategy.
The goal of this strategy is to make a customer comfortable with spending more with you. Even if the per-product price is lower you're establishing the precedent that this requires a larger overall purchase, almost like a mini-wholesale customer.
The first step is to do an analysis to figure out your customers' average/median First Order Value and discount amount (by dividing Total Value of Discounts by Total Value of Orders). Most carts show Average Order Value, but it's harder to get the average/median value of the first order, specifically.
Since it's the first order you're trying to close with this campaign you need to get those specific numbers, and Unific can provide these properties in our integration with HubSpot's free tools.
This will give you a baseline order value that you need customers to hit on their first purchase if you want to have a positive effect on your sales, and the discount percentage will show you what you're currently paying for your lifetime sales relationships.
You then set up the coupon's minimum required cart value to be this price, plus whatever your discount will be. (In Shopify this is the price before the discount is applied, not afterwards)
The specific "Buy X Get 1 Free" setup is similar to before (along with the Shopify native, Discount Ninja, and Discounted Upsells implementation articles) but the strategic difference is that you're only interested in closing the sale if it gets you an overall revenue amount that's higher than your average order value for first purchases.
This takes a much better understanding of your data and who is buying from you, using your own analysis or a tool like our SegLogic. You might find that certain products or collections are more conducive to this kind of AOV-raising promotion.
If you have the analysis, then I would recommend initially testing this sort of offer on carts where the Total Value of Abandoned Cart is above the average first order value. This would mean that they'd be getting a slight discount when offering the coupon rather than raising the overall price of the cart (so you're basically using Strategy 1 on a group with higher cart values just to close the sale).
But since the closed amount would still be above your average first order value then it's still a gain for your business and you may find this strategy is worth preserving even for the high cart value sub-group. I've had this happen with clients I've worked with.
Because 70% of carts get abandoned and over 50% of sales come from one-time buyers, you can make so many incremental improvements to your growth by optimizing your abandoned cart emails to non-customer leads.
If coupons is a current part of your strategy or one that you want to test with, the segment of non-customer abandoned carts is probably the most important testing ground for success. (If you're on HubSpot and haven't launched an Abandoned Cart campaign, we sell a template containing a basic, single-segment version, which should take less than 1-2 hours to customize and launch)
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