A fixed amount discount is one of the most popular types of discounts on Shopify. In this article, I will discuss how you can organize fixed amount discount campaigns on Shopify to maximize your sales.
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Fixed amount discount campaigns are promotions where we offer discounts to our customers, such as a $10 off voucher.
There are several important reasons why this type of campaign is commonly encountered in daily life and actively used by many Shopify stores:
•An Easily Understood Discount Type: Customers can easily and effectively understand how this campaign benefits them.
•Creating Real Value for the Customer: Percentage expressions can seem abstract and difficult for customers to grasp. However, when you offer fixed amount discounts, your customers immediately perceive the advantage these discounts provide.
•Easy Budget Control: When you offer discounts with a fixed amount, you can easily plan how much money you will spend on each sale.
Comparing Fixed Amount vs. Percentage Discounts
There are some important differences between percentage discounts and fixed amount discounts that will affect your sales and performance.
Key Differences
The first of these differences is based on customer and consumer psychology.
A “10% discount” is not as easily understood by the customer as a straightforward statement. With this campaign, customers need to examine product prices and calculate how much a 10% discount benefits them. However, with a fixed amount discount, the customer can very clearly see how much they will save without having to do any calculations.
Additionally, the perception of “I keep $10” has been proven by scientific studies to be much more effective than the idea of “I’m saving 10%.”
For your store, managing profit margins can be much more challenging with percentage campaigns. With fixed amount campaigns, you can more easily and effectively organize your campaigns according to the profit margins of your products.
When to Choose Fixed Amount Over Percentage
There are some important use cases where you should prefer fixed amount campaigns over percentage campaigns.
If you want to run a campaign on specific products and categories, and these products have similar price ranges, then choosing fixed amount campaigns can be far more advantageous for you.
For example, imagine you have some products nearing the end of their season, with average prices ranging between $90 and $140. You want to clear out these products’ stock before the season ends and generate a new revenue stream for your company.
Instead of running a 10% campaign, by directly running a $10 discount campaign, you can make it much easier for your customers to understand, and you can easily see how much the discount will cost you on sales resulting from this campaign.
Setting Up Fixed Amount Discounts in Shopify
Setting up fixed amount discount campaigns on Shopify is quite easy.
1.On the Shopify admin panel, click on the “Discounts” menu on the left, and then click the “Add discount” button in the upper right corner of the page.
2.On the page that opens, you will see four different options. If you want your discount campaign to apply to the entire store, select the Amount off order option. If you want discounts only on certain products, select the Amount off product option.
The only difference between these two options is that with the “Amount off order” option, the discount code applies to all products and collections, and the discount is applied to the customer’s total order.
With the “Amount off product” option, the discount only applies to products within the selected products and collections. Other products will be sold at their regular prices.
After making your selection, a detail page will open to create the discount code. On this page, after deciding what your discount code should be, select the Fixed Amount option in the discount value section to create your discount code.
Manual Codes vs. Automatic Discounts
As with any discount code, you can choose between manual or automatic discount code options for fixed discounts.
•When you choose the Manual discount code option, your visitor must enter the discount code themselves during checkout.
•With the Automatic discount option, the visitor doesn’t need to do anything—the discount is applied automatically at checkout.
If you have a big launch and want all users to benefit from the discount, creating an automatic discount code is much more logical as it saves your visitors an extra step.
However, if you are running a campaign for a specific audience and will only provide the discount code to selected individuals, then you should choose the manual code option. In this case, it’s important to set a code that is simple, easy to remember, and easy to type. Also, when communicating about the discount code, inform your customers that the discount will be applied at the checkout stage and that the payable amount will update once the code is applied.
Best Practices for Implementing Fixed Amount Discounts
When working with fixed amount discount codes, there are some important points to consider. In this section, I will discuss best practices to keep in mind when implementing fixed amount discount codes in your store.
Finding the Right Discount Amount
First of all, it’s important to decide on the discount amount. This must be calculated based on the prices of your products, your average order value, and your profit margin.
Consider the average prices of products in your store, the gap between the cheapest and most expensive products, and your store’s average order value to determine an amount that will be attractive to your customers.
The purpose of discount campaigns is to motivate customers who are delaying their purchase decisions or need extra motivation to take action. If your store’s average cart value is $200, a $5 discount code may not provide the necessary motivation for your visitors.
Therefore, make sure to set a discount amount that will motivate your customers, taking into account product prices and average cart value.
Promoting Your Offer
When creating your discount code, don’t forget to also develop a communication plan for this campaign.
•Show the campaign price for products included in the campaign on your website.
•Add a popup for first-time visitors to inform them about the campaign.
•Prepare necessary materials for social media posts and email marketing.
Make sure your audience is aware of the campaign.
Marketing & Conversion Tactics
There are some marketing and conversion tactics you need to pay attention to in order to get maximum returns from your fixed discount campaigns. In this section, I will talk about the two most important topics.
Pairing with Urgency & Scarcity
Discount campaigns must have a definite start and end date. If your store constantly features active discount schemes, popups, and persistent emails, you might be harming your brand.
Never run a discount campaign without an end date. Instead, you can directly reduce the product prices by the discount amount as a long-term strategy, which may be more attractive to your visitors.
For this, I recommend the 20% rule we developed after hundreds of tests within Growth Suite.
•Run a store-wide campaign for a maximum of 20% of the current month.
•For the remaining time, run personalized campaigns instead, limiting store-wide campaigns to only 20% of the month.
•Clearly display the campaign’s end date and how much time is left until it ends on your store with countdown timers.
•Make sure these countdown timers function correctly and consistently.
Only in this way can you protect your brand value while increasing your visitors’ purchase rates with discount campaigns.
Cross-Selling and Upselling
In fixed discount amount campaigns, always establish a secondary offer mechanism to raise your average order value.
Suppose the average cart value in your store is $50.
•You might set a $5 discount for orders over $60.
•Then immediately offer a $10 discount for purchases over $90, giving your visitors extra motivation to add another product and increase their cart size.
Display this secondary campaign clearly on the product page, cart page, and in the cart drawer.
This way, you provide significant motivation for your visitors to increase the average cart value through cross-selling and upselling.
Tracking Performance & Optimizing Results
After each campaign period, preparing a detailed report on the campaign’s performance is crucial for shaping your marketing strategy. In this section, I will discuss how you can analyze results after fixed discount campaigns and what reports you should prepare.
If you conducted a store-wide campaign, it’s important to analyze the following metrics:
•Discount Code Usage Rate: What percentage of orders placed after the store-wide campaign used the discount code.
•Purchase Conversion Rate: What percentage of visitors who visited your store during the campaign completed a purchase.
•Funnel Conversion Rates: The funnel metrics you regularly track for your store—what percentage of visitors viewed at least one product, what percentage of those added a product to the cart, what percentage of those who added to the cart started checkout, and what percentage of those who started checkout completed their purchase. Examine how these values changed during the campaign.
•Average Order Value: What was your average order value during the campaign period? How did it change compared to before the campaign?
Common Pitfalls & How to Avoid Them
Now let’s look at common mistakes often made during fixed amount discount campaigns that can harm your brand and sales, and how to avoid them.
Excessive Discounts Eroding Profit
If you do not conduct detailed research and analysis regarding profit margins, average order value, and the prices of products included in the campaign during the planning process, you may face significant profitability issues after the campaign ends. This can put your business in a difficult situation.
Discounts are one of the most dangerous costs for a store, similar to operational and marketing expenses. Remember that discounts are a cost that needs to be controlled.
At the same time, running too many discount campaigns may inadvertently train your visitors to wait for discounts before making a purchase. Once this happens, solving the problem can be very difficult. Your visitors may no longer be willing to shop without a discount campaign.
Coupon Leakage or Misuse
Be careful not to keep the campaign period too long and make sure to remove discount codes from your store after each campaign. Many social communities, groups, and websites focus solely on sharing discount codes.
Once your discount codes start circulating on the internet, even visitors who would normally complete their purchases without a discount code may begin using one.
As mentioned before, discount campaigns are a very critical and significant marketing cost for your business, and misuse can cause long-term damage.
Neglecting Post-Promotion Follow-Ups
Customers who made their first purchase from your store during the campaign period are valuable acquisitions for your business, indicating that you reached new customers with this campaign.
If you do not continue communicating with these customers who shopped using discount codes after the campaign and fail to create a flow for their second purchase, you will miss an important opportunity to increase profitability.
Prepare strategies—such as loyalty programs, retargeting campaigns, and personalized email & SMS marketing schemes—to turn this audience into repeat customers.
Conclusion
In this article, we discussed fixed discount amount campaigns. Because they are much easier to understand and calculate compared to percentage discounts, these campaigns are still the most widely used today. When designed correctly, they are important for increasing your sales, reaching new customers, and especially for providing new cash flow to your business during periods of slow sales.
When designing these campaigns, it is important to consider the average order value and the prices of the cheapest and most expensive products in your store.
In every fixed discount campaign, always design an additional campaign to push the average order value to the next level. This will encourage your customers to shop at a higher threshold.
Designing discount campaigns isn’t enough—you must also communicate your campaign effectively. For this, display unobtrusive popups on your website, and clearly set up countdown timers that show when the campaign will end.
While doing this, never lie to your customers. Your campaign must absolutely have an end date, and when that date arrives, end your campaign. Campaigns without an end date can greatly harm your brand perception.
Remember the 20% rule when designing discount campaigns: do not run discounts for more than 20% of the current month.
After each campaign, analyze how conversion rates, the Shopify funnel, and average order value have changed in your store. These analyses will give you insights into what to do or avoid in your next campaigns.
If you want to do all of this and more in just a few seconds, download Growth Suite for free from the Shopify App Store and install it in your store. Without any coding or technical setup, Growth Suite allows you to create discount campaigns, display campaign popups and messages without disturbing your visitors, show how the product’s price changes during the campaign on the product detail page, and display the time remaining until the campaign ends. Growth Suite makes managing all discounts in your store easy and effective.
For more information about discount campaigns, be sure to check out the articles below.
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