How to Create Cart Discounts – The Most Effective Upselling Strategy
With this post, I would like to provide you with more information on cart discounts and product bundling. Cart-based sales strategies have helped multiple of our clients double ROI and successfully convert dozens of hesitant customers. You can read their success stories here.
Let’s start with what is a cart discount in Voucherify. It’s an offer based on the total value or contents of a shopping cart. In particular, Voucherify lets you define a discount based on several cart criteria:
- A total dollar value.
- A total product quantity.
- Content of the cart.
- Price of particular products.
Here’s how you can use them.
Dynamic price widget
What is it and how does it help me? Once integrated into your web checkout page, the widget calls Voucherify to validate the coupon code provided by a shopper. Not only does it validate the coupon, it also calculates the discounted prices right away.
The important thing is that the coupon validation isn’t equal to the coupon redemption. The customer might validate the code and thus see the new price a number of times before they decide to purchase. The redemption is made when they actually buy something.
You can play around with the voucherify.js widget showcase here.
Other benefits of the widget:
- Widget layout can be fully redesigned.
- The validation workflow is super flexible, e.g. ,you can refresh the price once a customer adds items to an order.
- The widget works with every discount type supported by Voucherify.
- It takes care of security by using a separate authentication channel and preventing brute-force attacks.
- It’s free and open source.
Q&A: How dynamic cart-level promotions can increase the average order value?
Before we jump into specific examples of personalized cart promotions, let's hear what Tom Pindel, Voucherify CEO, has to say about cart discount in Voucherify.
So far, Voucherify has helped dozens of companies build personalized marketing campaigns which required promo codes, what sparked your interest for introducing auto-applied discounts?
Our customers claim that coupon and referral codes are a great way to acquire and convert first-time customers. At the same time, they’ve expressed the need for a retention increase tool. Seeing our dynamic segments in action, they wished they had similar tools to display incentives to shoppers the moment they enter their online store, without the need for coupon codes.
What was the reason behind introducing product bundling?
Attracting customers to your brand is one thing but engaging them to spend more poses another challenge. To catch and keep customers’ attention, you need to react fast. Targeted discounts displayed right at the cart-level are one of the ways which drives results in this case.
How does product bundling work in Voucherify?
When a customer visits your shop, your application sends an event to Voucherify API. Voucherify identifies the consumer and then tries to match their cart items with predefined discount rules. If a match is found, Voucherify sends back the details of applicable discounts so that you can show the incentive to the consumer and deduct the calculated amount right away. Thanks to this targeting based on customer attributes, different groups can be targeted with various discounts.
So, this means you can offer 20% off only to customers from Ireland during St. Patrick’s Day and the rest will be excluded automatically?
That’s right, and the best part about it is that you can configure this and other, more advanced segments, in just a few clicks, without bothering your development team.
What other targeted promotions can you run with this feature?
Our segmenting engine is quite flexible so basically there’s no limit. But the most common scenarios cover segments based on order history, geolocation, and loyalty levels. There’s more. While browsing the product catalog and adding items to the cart, Voucherify tracks these changes and verifies if the shopper is eligible for other discounts.
So, you’re trying to say a potential discount is recalculated every time the customer adds or removes something from the cart?
Exactly, and on top of that, we allow you to specify which products, product families, and concrete SKUs are applicable for discounts and which are left unchanged.
What about the order volume? Can we introduce discounts with thresholds, e.g. with a minimum purchase value or a particular number of products?
Correct. You can set a minimum order value and cap the total order value with a limit too. The same applies to the number of items in a cart. One can use this to apply different upselling tactics for different customer groups. Picture the following case where you offer:
- a flat discount 10% off for regular customers.
- 10% off for orders over Y (where Y is 1.5 * average order value) for customers who are more likely to convert.
As a result, the second variant will more likely increase the revenue than displaying the discount without threshold only. Using such a combination of segments and promotion rules, you can grow your average order value without much effort.
That’s a great example of targeting, but what if I want to try this out on a smaller scale. As a marketer, I want to make sure it won’t eat my margins. How can I test it first?
This is actually a substantial concern raised by our customers. The solution already lies in the segment engine. You can split the customer base into smaller chunks, try out new promo campaigns with them and then compare to a control group. It’s a standard A/B testing procedure.
Additionally, you can define a halting condition for any auto-applied discount. For example, you can stop the promotion from being rendered when the total amount of orders exceeds a given number. Or, you can limit the number of discounts for a customer within a single day. This will ensure your promotional budget doesn’t get wasted on campaigns that don’t work or are misused by fraudulent customers.
I see. So, it’s not only the promotion roll-out that’s automated but Voucherify also keeps an eye on live campaigns and closes them if some bad things happen?
That’s right. Once you integrate Voucherify API, all marketing campaigns can be managed solely by a marketing team.
Dollar value cart promotions
Now let’s get back to cart size deals. To create a dollar value promotion, you need to run the campaign wizard. As you might know from the previous articles, all the limiting parameters can be tuned in the second step when setting the promotion tiers and rules. In this case, you should tick the Order section and scroll down to the ‘total amount’ field. When you open the drop-down list, you’ll see you can define an amount-based offer with threw operators – is more, is less, and is equal.
Imagine the campaign you’re seeing on the picture above is launched and the coupons have been pushed out to customers. When a customer provides a coupon code on the checkout page, Voucherify’s rule engine checks if the order size (dollar amount) is more than 200. If it’s not true, the coupon won’t be redeemed and Voucherify will respond with a reason why (which should then be translated to your customers).
Product quantity cart promotions
The quantity campaign works in a similar way. Voucherify won’t allow coupon code redemption unless there is a given number of items in the order. One thing worth mentioning here, though is it rarely makes sense to base the discount on the number of order items in general. You’d rather have a value-based offer that targets a particular product. This is possible with Voucherify by combining multiple criteria; you’ve probably noticed this already when we showed you product specific campaigns. See the example below:
Product-specific cart promotions
Besides setting up rules regarding the total amount and items quantity per order, you can also play around with the content of the cart. Here, you can apply several rules based on the inclusion or exclusion of certain items from the order or run a BOGO promotion by applying discount only to a particular item from the cart and not the whole order.
Keep your cart promotions safe
In order to protect your incentives from fraud, we came up with several redemption rules that aim at limiting access to the offer only to specific customer segments or merchants. For instance, you may want to run a cart-level discount based on total order amount, plus target it at new customers or the UK-based customers. Our flexible promotion engine lets you do just that.
New cart-level discounts rules
With cart-level rules, you can tap into new effective incentives that might improve your up- and cross-selling tactics, for example:
- Buy one get one free.
- Buy X get Y.
- Product bundles.
- Spend over X and get free shipping.
- And more.
Real-life examples of personalized cart promotions
10% off the abandoned cart contents
With more than 60% of carts being abandoned before finishing the purchase, discounts have emerged as the perfect remedy for saving many of them. From the technical point of view, you need a dynamic segment based on a specific customer behavior. By using a cart-level promotion, customers who abandoned their cart and enter the segment can revisit your store and instantly find the discount at the checkout. Moreover, if after some time (e.g. 2 days) the purchase still isn't made, the system can automatically send an email/SMS with a coupon and remind them about their unfinished order.
5% off if you spend at least $50 and 10% off if you spend at least $100
Up-selling is a proven practice to make the most out of each purchase. The flexibility of cart-level discounts enables you to upsell on many levels. For example, you can offer two discounts related to a spent amount. Thanks to this, no matter the order volume, each customer can find a discount within their reach.
Buy one item and get the second product for free
Similarly to up-selling, cross-selling allows you to maximize the buying potential of attracted customers and thus increase the average amount spent. Both tactics work great together. Cross-selling can consist of products that create sets/groups or on the specific needs of your sales strategy. For example, you can add a cart-level discount for the most popular product in a given category, available when purchasing a product whose sales you want to improve. You can offer a discount for the related product or let your customers get it for free.
15% off if you have redeemed a coupon this month/referred us
Cart-level promotions work great with referral campaigns. They can motivate your customers to refer your brand and utilize their codes. These promotions rely on customer segments based on a number of redemptions made/referred customers. You can create a cart-level promotion limited in time and available if customers utilize any code within the scheduled time, or you can allow them to use this cart promotion only if specific codes are redeemed.
Discounts for particular SKUs
This type of promotion enables you to use different variants of products and combine them with particular target groups. For example, you can offer a discount for a more advanced and expensive variant of the product if a customer has a particular item in their cart or an item with a minimum set value. As with SKUs, you can use different products or sets of products. A greater number of tested configurations results in better adjustment to your audience.
10% discount if you sign up this week
Sign-up discounts are typical practice to acquire more customers. Combined with a cart-level promotion, customers can use the discount instantly after signing up. With this approach, stores enhance their email list and boost sales at the same time.
See what is possible with Voucherify cart promotions