Kathleen Booth brings years of marketing experience to her role as Chief Marketing Officer at clean.io — the digital engagement security platform designed to help businesses control the third-party code that runs on their ecommerce stores. Over 8 million sites, including The Boston Globe, Caraway, and Barstool Sports, rely on clean.io to protect their user experience, revenue and brand.
Booth doesn’t hold back in this passionate discussion, warning the ecommerce world about the pitfalls of malvertising and other forms of ecommerce revenue loss associated with coupon extensions.
The bottom line is this: any ecommerce brand running promotions could be losing as much as 10% of their revenue if they aren’t keeping what Booth calls 'clean coupon hygiene'. For anyone selling online with promotions, this is not an episode to miss.
Named by TopRank as one of the 50 Top B2B Marketing Influencers in 2019, Kathleen Booth also hosts the The Inbound Success Podcast as well as the Ad Ops All Stars Podcast. She is also an avid LinkedIn creator (#KathleenHQ) on topics relating to marketing and entrepreneurship.Booth spent the first 10 years of her career as an international development consultant, advising sovereign governments and international aid organizations on strategic communications for public sector reform projects. She helped launch Quintain Marketing in 2006 and grew it into a nationally-known digital marketing agency and HubSpot Platinum Partner.Today she is the Chief Marketing Officer at clean.io, a digital engagement security platform that provides over 8 million brands greater control over the third party code that executes on their websites, protecting their revenue, digital experience, and brand.
Jay: Kathleen. Thank you so much for coming on our podcast. Can you give us a quick background who you are and what is clean.io?
Jay: Kathleen. Thank you so much for coming on our podcast. Can you give us a quick background who you are and what is clean.io?
Kathleen: Yeah, thanks for having me, Jay. I’m chief marketing officer at clean.io and we are a digital engagement security platform. What that means in plain English is we help brands basically control the third party code that runs on their website in order to protect their user experience, their revenue and their brand. My background, I owned a marketing agency for 11 years, worked with companies across lots of different industries on their marketing strategies. Since then, I’ve basically been the head of marketing for a variety of technology companies. So
Jay: You saw this, I assume, as a challenge for a lot of e-commerce brands. What triggered you to start it?
Kathleen: I’ve been a marketer my whole career. I’ve marketed to marketers my whole career. The thing I’ve noticed is that we’re always told as marketers, that we own our website. You know, you talk about your channels and people say, there’s your own channels and your non owned channels, and you’re non owned channel or things like your Facebook page and your Twitter account. All the places where the platform can change the rules of the game. But then we’re told we own our site. To a certain extent we do, we own our websites legally but in terms of being able to control what happens on them, that’s a little bit of a fallacy and the way the modern internet works, I don’t have to tell you this, but the way the modern internet works, the way websites are built today, we don’t really own what’s happening on them.
We allow a lot of third party code in whether it’s an app or a plugin or the CMS we choose to build our site on. We’re beholden to these other providers of code of script, etc. A lot of which, as I said, we let in ourselves, but there’s a lot of it that we don’t actually let in, that comes in via the people who are visiting our sites. I didn’t actually realize a lot of this until I came to work at clean.io. It opened my eyes because as a marketer, obviously you wanna be able to control what happens on your site today, more so than ever, and especially in the e-commerce world, your website is your business, and if you can’t control what happens there and you don’t have full control over the user experience that can have a massive, massive impact on your conversions, on your pipeline, on your revenue, on customer loyalty and longevity. I could go on and on. You can tell I’m kind of passionate about it.
Jay: Well, can you gimme a couple examples of what that looks like in real life of someone, an aspect that didn’t intend for something to operate a certain way or happen a certain way and they lose control of it?
Kathleen: Yeah, absolutely. It runs the gamit because as I mentioned, there’s a lot of different types of third party codes. I spent a lot of time working in cybersecurity before I came here. One example that I came to appreciate through my experience in cyber is things like website themes. I think it was a year ago, the US government released an announcement that there was a major WordPress theme that actually was malware. It was a theme that was being sold through the Envado marketplace, which is to most of us who build websites, a trusted marketplace for themes.. That’s an example of code that we would allow in. We would actually pay for it and purchase it, put it on our site. Little did we all know this theme that’s being used by hundreds of thousands of sites around the world was built specifically to harvest personally identifiable information.
That’s one example, the examples that we deal with at clean.io every day are specific to things like programmatic advertising and third party browser extensions. When we were first formed, our core product was called clean ads, something that protects against malvertising. We protect some of the world’s largest online publishers, the Boston Globe, CBS interactive from malicious ads that come in through programmatic marketplaces. It was in the course of doing that, that we came to learn more about some other types of code that affect websites, because that’s what we’re looking at is third party code. One of the biggest sources of third party code execution on websites is actually browser extensions.
Again, this is something I didn’t know, as a marketer until recently that when somebody comes to your site and they have a browser extension and I have, probably 50 as a marketer, I use everything from built with to awesome screenshot, to color pickers, to the Moz bar. You name it. There’s a ton of them. All of those browser extensions because I install them as a website user in my browser, when I go to websites, they have an elevated level of permission to operate on that site. That’s how they work. If you think about it, they need to be able to read the code on the site to tell you things like what technology’s being used here, what hex color is that image, whatever the extension is. Those extensions are all affecting your site in one way or the other.
In our case, we specifically zeroed in on the use case of coupon extensions like honey capital, one, shopping. Those are the two most prevalent that come into in this case, e-commerce websites and auto inject discount codes at checkout. That’s a little bit more of an invasive use case than maybe some of the other ones I mentioned like color pickers, but all of them have the ability to execute code on your site and you didn’t even allow them in unlike the WordPress theme where you put it there. These are cases of code where you have not actually opened the door and invited them in.
Jay: Yeah. Plugins are probably one of the most common ways that data’s actually captured. It’s one of our security at [inaudible 05:22] it’s on every plugin on any laptop, our security team has to approve because it is such a vulnerable area for them to get in. Okay. I’d like to dive into the coupon aspect here. Because this is something I’ve thought about a lot. I actually have used honey, and I know a lot of people that do, but of course the first thing that went through my mind when you see things like this, well actually let’s explain what honey is for people who aren’t aware. Do you wanna give a quick background on honey?
Kathleen: Yeah. We’ll say honey, but we’re just using that as the example, cuz that’s the most popular of what are many, many coupon extensions. I’ll just give a little background and then I’ll get into that. You know, coupons have been around forever since I think in the 18 hundreds when Coca-Cola issued the first one.
Jay: Imagine the first time someone heard of the concept of a coupon.
Kathleen: We all love them. Right? Everybody loves to save money. If you’re my age, probably the most common example of a coupon that you think about, is the bed bath and beyond coupon that everybody got in the mail for many years. Before digital coupons, coupons were really used top of funnel. If you’re a marketer, you know top of funnel, the whole idea is you wanna get somebody who maybe was sitting at home and wasn’t thinking, oh, I need to go to the store right now and buy some something, to think exactly that. The bed bath and beyond example is the one I like to use because I feel like we’ve all experienced it. You know, your mail comes. The bed bath and beyond coupon arrives and you might not have needed new sheets or towels, but you get it.
You’re like, oh my gosh, I can get - I don’t remember the percentage - 20% off one item. Maybe I should just go to this store and look and see if there’s something there that I could use and you weren’t planning on going, but once you get the coupon, you go. Originally coupons were really about that top of funnel, like driving customers in the door to your store. The whole idea behind them was you’d make it up down the road through repeat purchases. It’s that lifetime value of the customer concept. You’re using the coupon as a loss leader. I was just explaining to one of my kids. It’s just like inkjet printers. You know, you buy the printer and it’s so cheap, right. But they know they’re gonna get you with the ink cartridges down the road.
Originally that’s really what coupons were all about. Now that we’re in this digital world, that’s changed dramatically and in a good way, in many cases. To to be clear to start out with, I’m not into coupon. Now we have a lot more leverage in how we can use coupons and discounts, not just to drive top of funnel traffic in the door, but to incent people to come back when they abandon their cart. To get people to put more in their cart once they arrive on our site. Maybe like a free shipping or a volume discount to reward our most loyal customers. You know, there’s so many ways we can use them. It’s such a powerful tool, especially in the e-commerce toolbox to be able to drive revenue and purchase behavior.
That being said, as that tool has become more powerful for retailers, it has also become more powerful for buyers. That’s really because it started with the advent of these coupon and deal sites. I think a lot of us are probably familiar with retailmenot. Places like that, which are websites, where you can basically go plug in the name of whatever store you’re shopping at, and they’ll give you a list of potential coupons with the probability that they’ll be successful. I’ve used them for years, I’ll admit and you go there and you test them out. It used to be, you had to go there, copy the code, paste it in a checkout and it may or may not work. You might have to try 10 before you found one that worked well. A lot of these sites have gotten smarter and realized that that’s a hassle for buyers.
It’s frustrating when you try 10 coupons and they don’t work. They’ve started building these browser extensions. You might go to the Chrome store or whatever web store for the browser you’re using and you plug it into your browser and it makes it so simple, stupid, easy. Then you go to your where you’re purchasing something, whether it’s clothing or sporting goods. You put those items in your e-commerce shopping cart, the little plugin pops up automatically in your browser and says, hey, we think we have 10 coupons that might work in the store. Would you like to try them? Of course, who’s gonna say, no. You hit yes. It starts to automatically inject and test the codes until it finds A, one that works and B the one that will get you the biggest discount.
Once it does that, if it’s successful, it’ll say, great, we’ve saved you whatever 20%. Or if it doesn’t find any codes, it’ll say, congratulations, you already have the best deal. It’s essentially making it super easy for customers to use coupons. But I’ll just say this one thing and then I’ll turn it back over to you. What’s so I would say dangerous about that for retailers is it’s coming in right at the bottom of the funnel. This goes right back to where I started, where coupons used to be a top of funnel tool. Now what’s happening is, you have customers who’ve made it to your site, put things in their cart, are getting ready to pay for them. These things pop up and all they really do is lower your profit margin.
Jay: Yeah. Of someone who is already buying already spending money. How do the coupon aggregators get the coupon codes?
Kathleen: There’s some mystery around this.
Jay: Are they submitted by users?
Kathleen: Yeah users can submit codes. There is that crowdsourced element to them where it’s like, hey, we all win. When you find a code that works submit it and we all can celebrate and win. There’s that element. But there’s also some evidence that they scrape the websites that they’re on. They’re able to gather codes that way. There’s also potentially some evidence that if I’m a user of a coupon extension and I legitimately receive a code from a retailer and I type it in at checkout, and that extension is present in my browser. There’s some evidence that they see that as well. There’s kind of scraping through the behavior of their own users. I think they get them through a variety of means. Unfortunately, a lot of times the codes that they’re getting are not codes that are intended for wide use. They could be codes meant for wholesale customers or for very specific small segments of a company’s customer base.
Jay: I have to imagine a few things, this probably skews the abandoned cart rates and conversion if someone has this and do you see this behavior, people checking a cart just to see if there’s a coupon in honey or a coupon in some other plugin software?
Kathleen: This is really fascinating when we started kind of studying this, what we learned was that a lot of retailers are under this assumption that coupon extensions are really good for reducing cart abandonment, and they’re also good for top of funnel for bringing new customers in. A lot of retailers told us, no, they’re great for business. We love them. Many of them have entered into affiliate partnerships with them for that reason. They’re paying a commission to the coupon extensions, which is by the way, how they meet their money. In addition, by selling their data. We set out to study this and we have our script on page with, I think it’s like more than 50 different e-commerce retailers across a variety of industries. We’ve AB tested what happens when you prevent coupon extensions from injecting those codes.
In other words, the extension’s still present, but when it’s not successful. The hypothesis, I think a lot of retailers have is, oh, when people get a coupon, they’re more likely to follow through and complete their purchase, right? Retailers are willing to take a hit on their margins in order to theoretically get more sales. We tested it and we ran 50, 50 AB tests on the traffic of the retailers that we’re working with. What we found was fascinating. I would say that if somebody puts their items in a cart and they’re at checkout, that’s where we test it, if a coupon is successful, versus if coupons are not successful. What we found is that there is essentially statistically no effect on cart abandonment at that point. It varied, obviously the results were slightly different in each case, but it varied than a band of 1%.
In some of the cases, card abandonment got 1% worse. In some cases, it got 1% better. But net, it was a zero impact. The next question would be why, why is that the case? I think there’s really two theories that we have, which we’re really working on proving out. One is what I would call sort of the journey interruption theory, which is that coupon extensions first of all, they’re used by people who are price sensitive and they want a discount. Second of all, many people who use them may not be price sensitive, but they alert people to the fact that there might be coupons and that could also get them to leave the site and start hunting more. As soon as somebody leaves your site, there’s that interruption. But bottom line, the theory I have is the furniture and the house theory.
My dad’s in real estate. He always said, when you’re shopping for a house, don’t picture your furniture in it. Because as soon as you do that, you’re negotiating power goes out the window. With eCommerce, I think that there is this dynamic of the stuff is already in the cart. People are picturing their furniture in your house. They’ve already somewhat, mentally and emotionally invested in purchasing these products. Getting a coupon would be nice. It would be the icing on the cake, but in many cases, it’s not what gets them to purchase. They’ve already shown they have purchase intent, so they’re going to, in most cases complete that purchase.
Jay: And they’ve mentally accepted the price already. Once they’ve added to cart and seen the price, they are okay with that price. That price is no longer a factor in the buying decision. There might be other introduced, such as shipping rates or shipping times or shipping methods or other things in the cart, but the price is no longer a factor. Introducing a coupon at that point, it makes sense. It makes perfect sense. It’s interesting. Because aside from even plugins, there are a lot of checkout incentives. People still do it. You can different things at the checkout and share URLs and do different things to get discounts. It’s interesting that the data shows that that may not actually change conversion, but just give an unnecessary discount at the point of checkout.
Kathleen: Well and friction, because if you’ve ever used these extensions, like I have a couple of them in my browser because I use them to test sites that I visit just to understand and how they work. It’s a very interruptive user experience. Like they pop up and, you’re either accepting them and then there’s all this activity happening or you’re trying to close them to get them out of the way it’s a friction filled experience. What’s fascinating too is while they have almost no impact on cart completion, they do on average reduce order value by about 10%. That’s a pretty dramatic impact when you think about the fact that you’re probably not getting many more conversions, but you are taking a 10% hit on your profit.
Jay: Yeah, I can’t help, but thinking there’s always the conversation of debate of on a site where to introduce coupons and there’s people in the camp of when you land on a site and the popup comes up right away and it’s enter your email and we’ll give you 10% off. There’s the spin to win coupons. There’s ones that are, as you navigate the site, probably the earlier on the higher in the funnel, the coupon. If it’s a coupon that you’re doing it, if it’s not incentivizing in some other way, like bulk pricing or bundle or other ways, but if it’s a coupon the earlier you can get that in the customer’s hand, the better chance it actually has of influencing a buying decision versus giving a discount to a purchase that would’ve happened anyway.
Kathleen: I think that’s exactly right. This is something that we’re really studying. I’m pro coupon. I think that there’s a really good use case for them. I’m just sort of anti like when they get out of your own control as a retailer. I think if you have a hello bar or a notification bar on your site, that’s like use code summer 21 to get 10% off, I think that’s great if you show that to every website visitor, because you can build that into your pricing, you have an expectation around the impact that’s gonna have on your margins because you’re presenting it to everyone and that then gets more people to put their stuff in the cart, which as we said earlier, once you get the items in the cart, the propensity to buy is greater. It really works from the standpoint of like driving more sales, but it’s something that you have much more control over than put something that pops up at the end of the buyer’s journey at the bottom of the funnel.
Jay: Yeah. How does clean IO prevent this from happening?
Kathleen: As I said, we started looking at this and realized that our whole mission is to give companies more control over what happens on their site. We realize this is an area where there is really no control for eCommerce retailers. We only exist because the coupon extensions have set themselves up in a way that they’ve taken the power away from retailers to control their own discount strategies. We have an app that is currently available for Shopify plus, but will soon be much more broadly available that you can install on your site. What it effectively does is it prevents that auto injection behavior at checkout.
If a user comes to your site with a coupon extension, that extension will still pop up. We don’t interrupt the user experience. We don’t wanna do that. Obviously that’s really important, but when it goes to auto inject, we will it from successfully finding a code and the user will see kind of the default state of the extension, which says, congratulations, you’ve already found the best deal, which is the same thing it shows when it does auto inject and can’t find a coupon that works. What’s interesting about that is so it immediately prevents what I like to call the robots from adding coupon. But it also then kind of trains the extension that the coupons are not gonna work. The extension over time will start showing fewer coupons and taper off if you will, because it’s learning that the coupons are not successful.
It definitely reduces the incidence of not only the auto injection, but, we don’t stop customers from legitimately entering coupons at checkout. They type them in. What’s nice about the extension is that over time the coupon extension websites will stop showing some of your codes because they aren’t successful. What it does eventually is it gets you to the point where you can trust that your codes won’t be used erroneously so that it prevents what I would call coupon leakage. But it also gives you more trust in your marketing attribution data. As a marketer, that’s super important to me. If you’re advertising on a podcast and you give out a code or you’re working with affiliates or influencers, and you’ve given them a code, you can trust that information more than you would have been able to previously.
Jay: Interesting. That’s awesome that it’ll default to the message “Congratulations. You’ve got already got the best code.” Because that’s probably a conversion booster versus if there’s an error and something like that. It actually blocks the attempt from the plugin? Or is it when you see the attempt come in, it recognizes it and it tries once and that’s it, or did block all of them?
Kathleen: From the user experience side, it looks like it’s attempting. It actually shows the attempts happening. But we’re able to prevent it from successfully, basically completing the acceptance of the code and reducing the order value.
Jay: Awesome. There’s other plugins that legitimately need to inject data sometimes like address auto complete. I know like credit card information stored in Chrome. Is there any conflict with that or are you able to target just the coupon plugins?
Kathleen: No. We’re able to be laser focused on just honey and capital one shopping, which account for something like 85% of all coupon injection behavior.
Jay: Interesting. Is there a way for a store right now to know if their sales are influenced by a coupon extension? If you ran an email promotion and you sent out an email with a coupon code in it, and now you’re getting orders, is there any way to know that these are legitimate ones from people typing in or these came from, someone saw this coupon code submitted it to a plugin and now other people are using it?
Kathleen: I love this question and it’s not a short answer. Bear with me.
Jay: Well, I have to imagine that’s what people are thinking right now, is how do I know if I’m even a victim of this?
Kathleen: There’s a couple of different ways to answer this. Number one is it’s very simple. Two things you can start with, the first is I like to say practicing good coupon hygiene, which is most of the brands we work with, come to us because they’ve seen really unusual data in their coupon metrics, let’s say. They’re watching the redemption numbers of their coupons and all of a sudden they’ll see a big spike and they can’t figure out why. It wasn’t because an influencer posted something. It wasn’t cause they just did a campaign. Like outta nowhere. All of a sudden they’re getting a huge number of redemptions. That’s a big red flag. If you see that, it means probably one of the coupon extensions or one of the deal sites has your code. Of course you can manually go out to all of them and look for it.
That’s what a lot of retailers have done, but it’s a massively time consuming exercise. The other thing you can do, which is part of how we do this is honestly get the extensions and test. Go to your site periodically and mystery shop. Pop something into your checkout, see what happens and you’ll see exactly which codes are popping up. You’ll also understand the user experience a bit more. I recommend everybody do that. You can certainly come to us. We do what we call a coupon leakage audit on your site. We can tell you some more there too. But the part of your question that you asked that’s a little more complicated is how can you know if the extension drove the sale or legitimately the sale came from the usage of the code that was intended.
That might be your email campaign. It could be your influencer, etc. Here’s where it gets a little bit more hairy. I say that because the way that these extensions function and I’ll just use honey as an example, cause it’s the most popular. If I have honey in my browser and I come to your site, let’s say, I come to your site because you sent me an email saying, hey, we’re doing a spring sale or summer sale, rather 10% off, anything on clearance, I get your email. There could even be a code in there. I come to your site. I put a bunch of things on my cart. If I have honey in my browser, it’s going to drop a first party cookie that’s gonna overwrite the original source attribution for my visit.
If I came through your email campaign, it’s going to overwrite that and it’s going to appear that honey is basically responsible for my visit and the ultimate purchase. Here’s what’s tricky. It’s gonna claim credit for that purchase whether I had a successful coupon or not. We’ve seen this behavior when we block. A lot of the merchants we work with, some of them are honey affiliates and many of them have used platforms, for example, like share a sale and we’ve been blocking the auto injection of coupons. Yet they’re still getting these massive bills from honey via share a sale. That is because that first party cookie is being dropped, claiming credit for the sale, whether there’s a coupon or not.
Oh, by the way, it’s claiming credit for that immediate sale. But then I think it’s something like a 30 year cookie, which most browsers won’t allow it to last that long. But what that means is that if I come back in 30 days, it’s claiming credit for that sale too, whether or not I came through the coupon extension. There’s this degree of attribution. I don’t wanna call it fraud cause that’s a strong word, but I don’t know what less strong word I can use to describe it. It’s super questionable attribution practices.
Jay: Yeah, absolutely. I did not know that that is super interesting. Would that override from ads like Facebook ads or Google ads or is it primarily direct links that overrides the cookies? 25:17 ,
Kathleen: It’s a first party cookie. It overrides just about everything. If you’re partnered with honey, it could mean that you are paying a vast amount of money or sales that it either had some small percentage in driving. Like I would say there are definitely times when it plays a part, right? Like when you look at the customer journey, there are a lot of micro conversions in that journey. One of which could very well be the usage of a coupon extension with a successful code. But I think unfortunately what happens is when we do our math as marketers, very often, we look at our cost to acquire a customer. When we say, should I partner with honey for example, and let’s say, honey’s taking a 10% commission off of your sale when it’s successful. I might say, gosh, I usually spend $400 to acquire a customer.
Let’s even make it lower in e-commerce maybe I spend $50 to acquire a customer. If honey’s commission is $50 or less, then in a very simple way, I might say that’s worth it all day long. But what happens then when you’re doing Facebook advertising, you mentioned that, and you’re spending that $50 on the Facebook ad to get somebody to your site. Then they use the coupon extension and then you’re spending another $50 and commissions to honey who came in at the very end of the journey. Oh, by the way. now you’re paying for the ad, you’re paying the honey affiliate fee and you’re taking on average a 10% hit on your margins through the discount that honey got your buyer. The calculations we use to determine whether it’s worth it to enter into these affiliate programs are so broken, and unfortunately have a massive impact on the ROI of our marketing.
Jay: Could a honey or coupon plugin act in a proper way where they worked with the brand and said like got specific coupon codes only for like if a brand had honey agreement or share sale or whatever it is and I created designated codes for honey so that I knew that it was honey actually influencing the sale. They didn’t overwrite cookies. Like they have every opportunity to act in best behavior if you will, but they’re clearly not.
Kathleen: That’s the only reason we exist. Is that they’ve created this situation where I think in some respects, merchants are held hostage because we have a lot of merchants who come to us and say, our codes have been leaked to these extensions. We’ve reached out to them and asked them to take them down. You know, we see the codes on the back end and everything from employee discount codes tom military hero 30 was one that I saw, which broke my heart. I’m like, I wouldn’t walk into a restaurant in the real world and say, hey, I served, can I get 30% off my lunch? That’s super unethical. But yet yeah, we use these codes through the extensions. Unfortunately when merchants approach them and ask for them to be taken down the answer, typically not all the time, but most of the time is sure join our affiliate program and you’ll have much more control over which codes get presented. That’s like pay us and you’ll have the ability to control the code. That seems unfair.
Jay: Have any of them considered workarounds instead of trying to inject the code, display the code so customers can copy and paste or does honey only inject it?
Kathleen: Honey, typically just injects it unless you go to their website and you can go to the website and find codes there as well. But most people don’t. Cause let’s be honest we’re all lazy. The auto injection is the easiest thing.
Jay: You mentioned earlier a little bit about coupon hygiene. I noted that. I wanted to talk a little bit about that. I think first of all, what is that and what is good coupon hygiene?
Kathleen: Yeah. It’s so interesting. This is something that I started learning more about the more we began working with brands. Like I said, the first thing that usually tips brands off that they have a problem with their coupons is if they’re watching their data closely and they see unusual spikes. Again, this is one of those things that as a marketer, I’ve been doing this for so long and I would love to say we’re all watching our data closely all the time. But if we’re all totally honest, we’re not necessarily. We watch some things, not all, but I would say definitely with coupons, first of all, know what coupons are out there. You’d be shocked at how many brands come to us and we give them - we have a report and a dashboard on the back end that shows all the coupons that are being attempted. They’ll be like, I had no idea that coupon even existed.
Jay: Oh, so you can see what people are trying?
Jay: Even if they don’t work?
Kathleen: Correct, we provide a dashboard and it will show all of the coupons being attempted and which extensions are attempting them. That gives you kinda the info you need to go out and then try to tackle the problem. But the number one thing is I think a lot of brands use multiple platforms to create coupon codes. Some are using, for example, their Shopify instance, to create codes. Others are using Clavio. You know, there are lots of other apps for Shopify that are just for creating codes. That creates this very siloed system for codes. Unfortunately it also sometimes means multiple people are involved in creating them. It could be if you have an affiliate at manager, they’re creating some, then you might have your marketing director creating some etc. My number one recommendation to start with is have some system of record that houses every code you create and put a process in place with your team for tracking that.
Maybe it’s as simple as a Google spreadsheet where every time a new code is created, you have to, to drop it in and then there’s some process for whether it’s weekly or monthly or what have you. You’re going back and you’re reviewing those to determine if some of them need to be sunsetted or, expired, etc. That’s number one. Number two is then actually watch redemption data so that you can identify these unusual spikes that aren’t correlated with a marketing activity. Also I think number three is, and this is the tougher one is really try to dig a little deeper into the effect that the codes are really having on driving sales. That has to do with looking beyond a very simple, what I would call CAC LTB equation. Looking at the cost to acquire custom or the lifetime value of that customer. One of the issues with coupon codes is customers who come in using them are more likely to continue using them in every subsequent purchase because that’s sort of their behavior and the extensions make it easy.
If you’re thinking that you’re gonna give that 20% off for the first visit and you’re gonna then make it up down the road, like I mentioned, sort of that inkjet printer model, that might not be the case, if somebody has a coupon extension and they’re using it every single time they come to your site. You have to decide, is it worth it to you as a brand, to not only acquire, but keep that customer if every single time they come, they’re doing so at a lower margin for you. There’s that whole topic around attribution, around understanding margin and making smart decisions.
Jay: Yeah. I would think too, if you’re using third parties to create coupon, which everyone does, whether it’s an email popup or your email like Calvio or omnisend or whatever it is, most of them have the ability to create a unique coupon per customer, whether that’s in a mass email or whether that’s in your welcome 10% discount. But a lot of people again are lazy. If you tried welcome 10 on most websites, you’ll probably get a 10% discount. But most of them, the good ones all have the ability to create one time, one use unique coupons per customer. That’s probably a big way to stop these as well too. Cause they can be used one time.
Kathleen: Yeah. That’s definitely, I think if you have the ability to do that and if you can afford, for example, to invest in something like a Clavio or some equivalent do it absolutely. But here’s where I think that’s limiting, or at least what we’ve seen is that now that brands are really focused on taking omnichannel approaches, unique codes work very well if you’re doing email campaigns. They don’t work so well when you’re working with affiliates and or influencers or doing something like podcast advertising. We have, for example, one brand we work with that have had a big customer ambassador program. All of their best customers who just love the brand, they’re not even affiliates, they’re not getting paid, but they would get a, a code from the brand and put it out there and share it with their friends, their family, their followers online.
Well, when those codes leak, the issue is that it’s tremendously friction filled for in this case your ambassadors. You see them leak, you have to deprecate that code and then you have to go to your most loyal customers, your largest evangelists and say, hey, your code leaked. Can you take it off your Instagram? Can you take it off your website? Can you remove it from your email? I’m gonna give you a new one and oh, by the way, this might happen again in two weeks when you start using the code. This customer, we had, they shut down their ambassador program for, I think it was six months because they were like, it’s causing more problems than it’s solving. The ability to use those more broad codes I think is important when you’re truly doing kind of an omnichannel approach.
When you can use a single use code, you should definitely do it. But I don’t think it solves the whole problem.
Jay: Your best partners must be influencer marketing agencies.
Kathleen: We definitely have a few. Yeah. Cause imagine if you’re the influencer and you share your code and then somebody goes to the site with your code and then honey pops a code in that’s worth more than your code and overwrites it.
Jay: If I was an influencer, I would only work with brands using clean.io cuz I don’t wanna have to redo all my posts. Can you speak to some of the results that some brands have seen? Like do you have data on what percentage of sales have been cleaned or protected or money saved or any data around that? Yeah, absolutely. As you can imagine, it varies widely based on how retailers use coupon codes, based on average price of what they’re selling. But I think I mentioned earlier, what we’ve seen is that average order value when coupons are being blocked, tends to increase by around 10% on average. We’ve seen that retailers that are in verticals, apparel or beauty tend to get hit pretty hard by coupon extensions. They tend to have much larger savings when they start to block. But we have some customers that are in for example, fitness equipment. We have one. We were able, I think the largest coupon we ever blocked was something like $500 on a single purchase.
It all depends on what you’re selling and how big the coupons are that you have out there. You all just tell one story, just to add to that, my CEO, test this out a lot on sites he visits, and this is just an example of how devastating it can be. Goes back to this issue of coupon hygiene. He went to one men’s apparel website and was able to get 100% off an unlimited number of orders and how he did this was the coupon extensions, got a hold of a code that was $75 off your order. The retailer had neglected to set a minimum purchase value for that coupon. As long as he kept each order under $75, he could just go to town. I think he’d made put in one order and then just to make sure it worked and then he returned it, which breaks my heart because you’re losing more money on the return, but ethically he wanted to return it.
Then he reached out to the retailer to tell them, but like that’s an example of just how unbelievably devastating it can be. If you A, don’t have good coupon, hygiene B, you’re not watching what’s happening and C, you have no way to stop it.
Jay: Well, a lot of these, the orders created, it goes straight to the fulfillment house. The fulfillment center, they don’t care about what something costs they’re picking and packing and shipping. If there’s no questions or support required on that order, it would just go through and no one would even notice. That’s really interesting. Clean.io. How does it work? It’s an app available for Shopify plus is the pricing model based off of percentage saved or what does that look like?
Kathleen: You can find it all the information on our website, which is the same as our company name, clean.io, the product is called clean cart. When you get to the, you’ll see clean cart kind of logical, and we’re really transparent with pricing. We have it up on our site. It starts right now at $249 a month. It’s very dependent on the number of orders you process per month, basically. We have three pricing bands and then there’s enterprise pricing, which is negotiable. But what we do find average is that for the retailers, with whom we work, they usually make back about seven to 10 X, what they spend on the product. We do guarantee that in the first 30 days, if you’re not recouping more revenue, then you’re spending on the app, you can have your money back.
Jay: That’s awesome. Any exciting things coming down the pipe for clean.io that you can talk about?
Kathleen: Yeah. We’re absolutely full throttle focused on making this app available to more than just Shopify plus. Right now the reason it’s not available to regular Shopify customers is just that Shopify itself has locked down the ability to really build apps that affect checkout. We’re hoping that will change and we’ll be able to make it more broadly available. But we’re also looking at expanding to other platforms like Magento big-commerce Salesforce, commerce cloud. I expect to see that coming very soon. If you do, if you are on one of those platforms and you’re interested, you can always come to our site and fill out the form and we’ll put you on a wait list. We’ll reach out to you and let exactly when it’s ready. But then I think we’re also really looking at given our presence on page and the data we’re collecting around how these coupon extensions work, we are looking at how we can help e-commerce brands ensure that the commissions they’re paying their affiliates and specifically the coupon extensions, if they are partnered with them, are only for sales that they really had a role in driving.
That’s something that we’re pursuing. We don’t have a product around that yet, but I would expect at some point that we would be heading in that direction.
Jay: Awesome. Kathleen, this has been really informative. I know our listeners will get a lot of this. Obviously clean.io is a great place to go. Is there any social media platforms you’re active on?
Kathleen: Yeah. If you wanna reach out to me personally, I’m really active on LinkedIn, but I also have Twitter. You can message me on either of those and I’ll definitely respond happy to answer any questions. As a company we’re on pretty much all the major platform and our site, as you said, is clean.io.
Jay: Awesome. Thank you so much, Kathleen. This has been a lot of fun.
Kathleen: Thanks. I had a great time.