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April 17, 2018

How dynamic cart-level promotions can help companies increase their average order value

Mike Sędzielewski
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An interview with our CEO, Tom.

So far, Voucherify has helped companies of every size 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 this?

- 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 it work?

- 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 treated 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 2nd 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.

Alright, do you have any examples of auto-applied cart-level discounts?

- The article we put together recently is a good place to start. You can also dive deep into Voucherify’s validation rules and promotion tiers in the Help Center.

Thank you.

- Thanks.

Tagged:
coupon experience
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coupon infrastructure
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promotional campaigns
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