Choosing the right type of discount can significantly impact your sales and customer satisfaction.
In Shopify, there are two types of discounts that, at first glance, seem similar:
- Automatic discounts
- Discount codes
However, there are important nuances.
For example, I recently spoke to a young entrepreneur who wanted to run a promotion for his liquor business at an in-person event. At the time, our app was only capable of supporting automatic discounts, but it seemed like a potential good fit, so he installed the app to try it out.
After we had a brief video chat, however, it turned out that discount codes would have been the right solution for his use case. Our app can do both types of discounts now, but you get the point.
This experience highlighted an important lesson: using the right type of discount can boost your sales and deliver better results.
What’s the Difference?
- Automatic discounts: Applied automatically at checkout when specific conditions are met.
- Discount codes: Require the customer to manually enter a code at checkout.
Examples:
- Automatic discount: 10% off orders over $100.
- Discount code: Enter
TENOFFat checkout to get 10% select merchandise.
How Automatic Discounts Increase Conversions
Yesterday, on my drive back home, I saw a sign on the back of a car:
GARAGE SALE. 9AM-5PM. PETTIS STREET.
Do you think I remembered to stop by Pettis Street to check out what they were selling? Absolutely not! I only saw the sign briefly while stopped at a red light, and I already had a million other things on my mind at the time, too, like writing this article.
So, that seller lost out on potential revenue, despite their promotion, because it was too much of a chore for me to actually act on it.
Let’s be honest - most people are lazy… AND busy! It’s human nature to want to conserve energy by not doing things we feel are a waste of time. The main benefit of automatic discounts is that they stop lazy/busy people from abandoning their carts.
Here’s how automatic discounts boost sales:
- Simplified Checkout Process: Automatic discounts reduce the steps customers need to take to complete a purchase during a promotion. For instance, in a flash sale, you’ll likely see more sales if customers don’t need to enter a discount code manually.
- Preventing Forgotten Discounts: Automatic discounts ensure customers don’t miss out on discounts, enhancing satisfaction and reducing refund requests, saving you time and effort on processing returns.
Automatic Discounts Can’t Be Leaked
Does this icon strike fear into your heart? If so, it’s probably for good reason.
If your discount codes get into the wrong hands, it could mean major losses for your store.
One major advantage of automatic discounts is their security. When you have no way for a customer to receive a discount, besides actually meeting specific conditions, it prevents misuse. Plus, there is no “code” to leak, anyways.
You can also prevent discount code leaks by creating them in our app, which provides foolproof validation that a customer meets conditions (like having a specific tag), but that’s a topic for another article.
High-Converting Automatic Discount Promotions
Okay, enough with the stories. Let’s get to the nitty gritty.
If you want to quickly drive sales using discounts, try these tried-and-true strategies:
- Bulk Discounts: Encourage larger orders by offering discounts for purchasing more items.
- Free Shipping Over $X: Combat abandoned carts due to high shipping costs by offering free shipping on large orders.
- Wholesale Discounts: Drive significant revenue by offering bulk discounts to other businesses.
- Loyalty Discounts: Reward repeat customers with increasing discounts to foster loyalty and repeat purchases.
- First-Time Customer Discounts: Address pricing objections and boost conversions for new customers with an introductory discount.
At the time of this writing, our discount app is 11 months old, and those are among the most common types of promotions we see our customers run.
When Discount Codes are Better Than Automatic Discounts
Nothing in this world is black-and-white, and discounts are no exceptions. Though we prefer automatic discounts when possible, there are definitely situations that call for discount codes.
Here are a few examples:
- Campaign Performance Tracking: Easily measure campaign success. For instance, if you give a special discount to event attendees, you can track sales using a code like
EVENT10. - Usage Limitations: Only discount codes offer a “once per customer” option in Shopify, making them ideal for limiting use.
- Customer-Specific Promotions: For personalized promotions like birthday discounts, apps can generate one-time-use discount codes automatically.
Conclusion
At this point, you’re an expert on the differences between the two types of discounts in Shopify.
In general, automatic discounts are better for conversions, though discount codes can be useful in certain cases.
When in doubt, use an automatic discount!
(That kind of sounds like a slogan. Should that be our new slogan?)
The Best Shopify Discount App
Ready to boost your conversion rates, average order value, and customer lifetime value? Try Regios Automatic Discounts today.
- Versatile Discount Creation: Create both automatic discounts and discount codes.
- Advanced Logic Flow Builder: Tailor offers to your customers using advanced logic flows.
- Enhanced Visibility: Display discounted prices on product and collection pages to encourage purchases.
Elevate your discount strategy with Regios Automatic Discounts and watch your sales soar!