Shopify Promotions That Actually Work (And Don't Kill Your Margins) w/ Daniel Patricio (ex Shopify)

Jay Myers: Daniel, thank you so much for coming on the show. Brother.

Daniel Patricio: Thanks for having me, man.

Jay Myers: You know why I was thinking right before this two out of the last three guests have been ex Shopify employees. Like maybe I'll make this a trend. Just, I had a loc on who's the founder of Trexity. Oh. And then Ross from Reactiv.

And now you, so like that should be my, like the, I could probably make a podcast of just. Ex Shopify employees that are now building in the ecosystem solving problems for merchants. So welcome to the show, man.

Daniel Patricio: Thank you. Thanks for having me.

Jay Myers: I always like to break the ice with a fun question right off the start. What were you doing 15 minutes before this?

Daniel Patricio: minutes before this I was making a coffee espresso.

Jay Myers: Which I just saw actually. Yeah,

Daniel Patricio: Yeah. Yeah. Before this and I made my wife a tea. Rooibos

Jay Myers: Oh, look at you.

Daniel Patricio: South African rooibos Tea.

Jay Myers: Oh, man.

Daniel Patricio: good. Still a good go

Jay Myers: You, you just, you learn a lot about a person, you know, when you jump on a, on a call, like right before they're getting the kids out the door or want some, making the bed or cleaning the kitchen or, it's just, it's interesting getting off a sales call. So you were making tea for your wife.

You are. That's, that's right. Let the record show he was making tea for his wife. We'll make sure she gives a five star review for that when the comes out. Okay. So let's get on to things that really matter to our listeners. You've built an amazing solution for Shopify, which I want to, I I wanna let you introduce it.

I'm really excited to dive into it. 'cause I know this is. A, a challenge and a pain point. The whole area of promotions and doing it well. And should I discount, should I not discount? So tell me what you've built and, and why

Daniel Patricio: Yeah. So with Abra, we've built a system that we aim to. Help merchants increase the conversion rate of their promotions. And we do that by helping improve their customer experience for it. And you know, the kind of genesis for this was I mean I, I've worked at Shopify for a long time and I was a merchant while I was at Shopify and, you know, while I was at Shopify, I was like, oh man, whenever I'm sending out my marketing emails, it's so frustrating.

I give a discount to a customer, I give them the code. They either less people than I thought bought it or people message my customer support and be like, oh, the discount and code didn't work. I forgot to add it. And I was always just like, why can't we just show them it? Just show them the discount.

Just like they click on it, they get it, and that kind of thing. And, and that's kind of where we started with Abra. And, you know, I'd quit Shopify and I was going into the depths of my store as a full-time thing, and I came back to this problem, built a prototype, and where the business kind of evolved has been.

Okay, if you got that magic wand and now you can apply discounts on the storefront, what do you want next? And the truth comes down to that don't, people don't wanna just discount, 'cause they don't wanna just give away their margin. They want to get smarter, they wanna offer more interesting things.

And so where the business really evolved is like we help merchants with, right? Complex promotion, sophisticated merchandising needs. Make it like a butter smooth storefront experience and, and that makes them a ton of money. So,

Jay Myers: Okay, so you, and you were kind of in the, at Shopify. The marketing, I, you, you helped build the buy button, is that correct?

Daniel Patricio: yeah, so I, I joined Shopify in 2013 and I was one of the first kind of product managers and I worked on the first version of channels. And then we were building out channels. And we needed a channel. And so I, I started building the buyer button and that was kind of opening up to building a lot of storefront APIs and the first kind of headless stuff.

And around that time I was also starting to build my own store. So I sold Ong, which is like South African Beef Jerky online. And I was kind of realizing oh, Shopify's not really helping with marketing. There's a big gap in my store. How do I know how my email's performed? How do I know how this did my ads are performing in kind of real time.

And so that was kind of the genesis for the marketing section.

Jay Myers: Hmm.

Daniel Patricio: It took many, many years to make all of that kind of real. And yeah, I ended up spending eight years at Shopify and the marketing section was kind of my baby for a lot of it.

Jay Myers: What was the first thing in there? Was it like now there's a lot from email campaigns that, was it like Facebook ads or what was the first thing in the marketing section?

Daniel Patricio: yeah, yeah. So it was Facebook ads and Google shopping.

Jay Myers: Okay.

Daniel Patricio: we we're the first kind of two and then, then it expanded to be TikTok, snap. Pinterest worked with a lot of partners on that side and, and, and also the large larger ecosystem. And then email and those sort of things. So.

Jay Myers: So you've kind of always been of this marketing mind, like you've, you've seen the pain that merchants have. I think every year when Shopify does their annual survey, they say what are your biggest challenges marketing and acquiring customers? That's usually at the very, very top.

Daniel Patricio: Yeah, yeah, yeah. It was, it was always, it was always the biggest problem. It was always the biggest pain point and, I think in the early days you know, a lot of shop, it was making all of that easy. Everything else easy. You know, Shopify payments launched when I just joined Shopify. You know, the online stores got easier and easier and more self-serve you.

I think there were like no themes, settings, or any kind of blocks in the back in 2013. So all of that got, got, got easier. But you know, marketing never did. And I think, you know, I think a big reason. It's kind of been interesting to build marketing tech outside of Shopify is marketing is one of those things where everyone's got a different playbook a

Jay Myers: Yeah.

Daniel Patricio: You know, everyone's got their own rules. Everyone's got their own margins, their own ways of thinking about things. Their own need to be creative. And so it's hard for, you know, when you're inside to build like a one the thing that can serve

Jay Myers: Mm-hmm.

Daniel Patricio: of people. And so yeah, I've really enjoyed the. I mean, I loved working at shop.

I loved building things inside and I learned so many things, but it's, it's fun to be on the, on the other side of the puzzle. And now I can, I can, I can, I can cheat a little bit. If I want a feature, I can build it quick and

Jay Myers: Yeah.

Daniel Patricio: hack it together. And even you know. You know, when we are outside, when you're inside Shale, we'd always be like amazed on how creative, you know, agencies and app developers.

You're like, you can't do this. You're like, oh, what do you mean you can't do this? You just hack this together and this and this here. Then it works together, and you're like, ah. You know? So,

Jay Myers: Well, that's the world. That's the world we lived in and still live in at Bold, right? Like it was like. Basically pushing the boundaries of what is possible. And then Shopify saying, I don't know if you can do that. Oh, actually, yeah, that's pretty cool. Okay, let's build some APIs so we can properly support

Daniel Patricio: Yeah.

Jay Myers: that, that's the sign of a good platform, to be honest. Like it's you, you look at platforms like Apple and it's, it's the app developers. That call it hacking if you want. They, you know, like the first, I remember the first time I jail broke my phone and I could get a, I could get notifications on my lock screen.

So I downloaded a jailbroken version of an OS so that I could see text messages on my lock screen and notifications. And then, you know, apple came out with a way that, oh, now apps can push notifications to the lock screen. And it's, it's a symbiotic relationship, right? App developers pushing the platform and the platform adapting for the app developers.

So I, I've always really appreciated that about Shopify. So

Daniel Patricio: Yeah.

Jay Myers: now you're on our side, brother. Keep pushing them. So what I, I, I wanna. Tell me a little bit more about Abra, and I have a lot of questions I want to get into on promotions, but and you kind of touched it on a high level, so you, but tell me if I install Abra, what, what can I, what can I do as a merchant?

What kind of tools are available to me?

Daniel Patricio: Yeah. So, you know, the, the, the first, the most basic version of Abra was like for. That merchant that wants to give a 10% off discount on certain product to, to their customers they're sending an email to. And what you can do with ABRA is you can put, if you put abra link equals the discount code in the URL, anyone that clicks through that URL, they'll see the discount applied on the collection page, on the product page in carts and going to checkout.

Jay Myers: awesome. So rather than sharing a coupon code in an email that someone has to copy and paste, click, they land on the site. They don't necessarily know what products it applies to or what the discount is. So if something is $199 and you're sharing a 20% discount code, if you use an Abbra link, I land on the site and now that product is showing $160 or whatever the co, whatever the code is, and if, and if it.

So it is it, it's smart. It knows if it applies to a product or not. If I have, if that discount is applicable to shoes, but not t-shirts, the shoes will show the discount, but not the t-shirts. Brilliant, brilliant. That has to have a huge impact on conversion, just like the visually seeing that discount right.

Daniel Patricio: You know, the interesting thing is you know, when we first started talking to merchants, everyone was like, oh yeah, that's silly. It should have always worked that way. That's great. And oh, that was a pain in the ass.

Jay Myers: The best solutions always are simple when you think about it after.

Daniel Patricio: And I think the, you know, the thing that really kind of surprised us is like how good the numbers actually were.

You know, because I think I think, something I used to hear merchants talk about is I don't know if I wanna do this. You know, maybe the people that aren't using the discount codes they didn't want to, they were fine. They wanted to pay full price.

Jay Myers: pay full price

Daniel Patricio: Yeah. And I mean, I've seen enough data that's absolute ridiculous.

It, it's completely wrong. You know, we see a lot of merchants, first of all they see like a 20 to 30% lift in conversion. And for me it, it's, it's

Jay Myers: When? When they turn on the smart links that show the discounts.

Daniel Patricio: Yeah. Yeah,

Jay Myers: Wow. That's incredible.

Daniel Patricio: because you know, for me it's, it's, it's all the people that are like, you know, I think it comes from two things. It's, it's one you know, I don't even know what the, the percentage is, but like most traffic's on mobile, right? And if I'm, you know, sitting in line to get a coffee and I get an email saying, or an SMS saying Hey, you got this deal right now.

And then I open it up and I'm like, wait. That's actually quite expensive. It's $200. Am I getting the discount? Am I not getting the discount? Maybe I'll look at this later. And then you never look again. Right? So I think like we capture those people and, and that's like the first thing. And I think I.

You know, the next thing is that a OV, right? So, you know, nobody's shopping with a calculator next to them, you know what I mean? And ideally you can get people to spend more when you have those kind of incentives. And so, you know, we've seen I mean depends on like in beauty we see it working a lot better.

'cause you know, if you've got products under $30. You've got these thresholds or, or jewelry. We find people add a ton and sometimes we see two, 300 x increases in a OV versus their baseline because people are like, oh wait, I'm actually gonna save 30%. 30% is actually $60. You know what I mean? On this product.

Oh damn. Okay, let's keep going. Let me add more to cart. So I think it's that was always kind of the, the really interesting stuff there. And then, you know. That was always fun and it was great starting, but like the, the most fun part of kind of building this has been, you know, merchants that like saw the value and they're like, this is cool Dan.

I've been looking for this forever. But you know, the merchants that were like, wait, but if I have this magic power, what can I do next? Can I have more control over the discounts? Do I have to make everything discount at the same amount? Can I do tiered discounts? Can I do this? Can I do that?

And, you know, it's been the most exciting part I think, of the last year of like in working with these larger merchants. Once they started working with our our toolbox tool belt, they started to do things that could make them a lot more profitable.

Jay Myers: Hmm.

Daniel Patricio: and that's when it really kind of comes together.

And you know, this November, December was like absolutely insane for us and, you know, versus like my first two years, my first two B fcms as the, as the with Abra, you know, the thing we were doing now is like we were doing in October early access sales. So because on a discount, people were doing, their homepage was all prim and papa.

You know what I mean? No discounts. Here's the new products we got for the holidays. And then if you got the specific link, you could get access to up to 40% off on a sale. So we did like certain merchants, we did like almost $10 million sales through these private links that they're giving access to their site.

Jay Myers: That's okay. I wanted a couple things. One is what about stores that c can always have a discount on products? I guess it would, like lots of stores you go to, they just always have the high retail price and there's just a, a, a persistent discount.

Daniel Patricio: Mm-hmm.

Jay Myers: will it show the discount on top of that, or do they need to have only one price?

Daniel Patricio: I mean we, so we can dynamically manipulate prices anywhere and everywhere. So if they've gotta compare at price, we can actually mark it down to the lowest possible, right? In any app on their storefront. Whether it's the upsells or their. Cart recommendations or search results, we can change the prices literally everywhere there.

Jay Myers: Okay. So it doesn't matter if they're running. Discounts, whatever the coupon code will discount it will reflect that

Daniel Patricio: Yeah. And you know, a big thing we found, actually, my first AB test on ABRA was on my own store, and we, we just built the price matching feature like the, the updating. And then I, I was doing a bunch of user testing and the conversion rate was good, but it wasn't as. Highs as expected. And I spoke to a bunch of people and they're like, oh, I thought that was just a compare out price and like just a normal compare out price.

You said I was getting a discount,

Jay Myers: Well, that was a question I had, right? Yeah.

Daniel Patricio: And so, I mean, because I think there's actually a bit of mistrust in compare out prices from customers and Google released that thing last year, which will like index all your process and graph it for people. So it's you know, they kind of, can call you out on it. And so I think something we tried to do as a part of it is like creating these banners that would follow you through the experience. And so it says you are saving this amount because of this code. And then people are like, oh, I get it. And then, you know, if they open it incognito window, they go to your website, they're like, ah, everyone else is paying full price.

I'm getting a specials deal. I better grab it now. You know what I

Jay Myers: So there's another indicator other than just the march down price. 'cause that's what I would've questioned as well too. So how does, how do they know that's just not one of these stores that always has a compare at price on everything. This is a promotional price that is currently, it's active just for this session.

That's indicated on the, on the, when they line on the site.

Daniel Patricio: I think we literally saw it doubled the conversion rate when we did that you know, baseline not applying a discount, you know, then like we got a 50% gain in conversion when we kind of, auto applied it and that was good. Then we got another 50% on top of that when we actually had like the supporting context.

I think you know, one of the first things I worked on at Shopify was onboarding for Shopify. So like how you actually sign up and what you do when you get on the product. And again, one of the things I just learned I. Like we think about user experience. My co-founder and I worked at a design agency that was acquired by Shopify.

So we were always very user experience first. And you know, the key thing is like consistency. You know, if your email says you're getting a deal, then the website should say you should get a deal and checkouts should say you get the deal. And if you do that, more people will feel comfortable and more people will buy.

So. Always something we think about of like, how can we maintain consistency as high up the funnel and as consistently as possible through it, but of a maybe a technical way of kind of thinking about it. But for me, you know, everything is kind of user and customer experience first. That's a secret to like increasing conversions.

Make people happy, right? Make them not scared, make them satisfied, you know? It's like simple.

Jay Myers: And it makes sense. 'cause you said earlier that, you know, actually seeing the discount has an IM, has an impact on buying behavior. And I just am remembering this last Black Friday, there was a particular store I was shopping at. I got an, I got a discount code. It was a 30% by email. It's like our Black Friday sale is on, I got a discount code.

It was like Black Friday 30 or something. But I, but I had to copy and paste it. We should get them using ABRA, I guess. But so I went to the site. I added, it was kind of like an athleisure company, and I went to the site and I bought a few a, a shirt, some pants, a few other things added to the cart.

Got to check out. I entered my code once I was in checkout. Then I entered it. I saw saving $78 or whatever it was. I was like, oh, yeah, that's real money. I went back and I added more to the cart.

Daniel Patricio: exactly.

Jay Myers: I bought more. Once I saw that, like there's something tangible about seeing, like my shopping basket was $348 and now it's 260 or whatever it was like.

That's real money. And then I kind of thought in my head, that's $78. I can just go get another free shirt or two, right? Like it's, that's how my brain went. And so I went and I bought more. And so it's not only the, probably the impact on conversion, which you said you're seeing 30 or 40%, it's probably higher a OV as well too, right?

Daniel Patricio: Yeah, I think on the, on the customer side, again, if you don't give discounts often, which you don't want to do and you wanna make them special, which you want to do, like people want to spend as much as possible, like, how can you make that easy for them? Like again, do the math with them, let them know.

Right. So, you know, I think that's the one interesting thing we've seen, like behavior wise. And then I think, again, like one of the most interesting things over the last couple years was when we spoke to merchants and understanding their problems, you know, realistically. Almost, I always heard this like argument between the finance guy and the marketing person in, in every brand where the finance guy's like, why are we giving 30% off on everything?

Jay Myers: Mm-hmm.

Daniel Patricio: You know, the poor e-commerce manager's well listen, I know, you know, socks don't cost as much as jackets, but I can't tell our customers that jackets are 40% off and socks are 10% off. I don't, I don't have a way to do that on the website, so we have to give everyone 30% off, you know, and

Jay Myers: Hmm.

Daniel Patricio: where it's been, where it's very fun for us is you know, we can go to the, we can make both people happy and be like, Hey, listen, if you actually give people way bigger than a, 'cause, you know, the customer wants more than 30%.

If it makes sense. You know what I mean? And so we've kind of started building functions instead of just taking a 10%. Now we are building complex functions now where you know, the e-commerce magic can be like, oh, cool, yeah, I'll do 50% off on this thing that's been sitting on the shelf for two months.

But you know, our top seller, we can only do 10% off. And then from a customer experience, it's all butter smooth. It's all the same. It doesn't matter. To us what the rules are. And so you know, the thing I'm probably most proud of is again, we, we are not a, we are not a discounting app for discounters.

Like we're, if anything, where we work really well is for the merchants that don't like discounting, they don't want to discount, but you know, they got inventory, got VIP customers, they got. They need to move sales. Right? And they want to do it in a smart way. They wanna do it in a profitable way. And I think those are the most fun problems.

We love when like merchant comes to us and be like, Daniel, love this promotion you have, but I'd really like if we could do it like a dollar off or could we do it tier or could we like limit it to only being on this collection and not this collection? And combine it. I'm like, let me think about it.

Okay, cool. Awesome. Let's dig into it. You know? 'cause those are the, the fun problems,

Jay Myers: Yeah, this is really powerful. I want to dive into this. So you're, you can create d different discounts by can you hand select products? Is it by collection or like product type or how, what's the, what's the criteria in setting that up?

Daniel Patricio: Yeah, so you know, when we started we were just taking Shopify discounts that you created in Shopify. We said. Throw that on your website, we'll make that work. But we've kind of got this layer for changing things in your website now. And what we started doing is we have I think it's about six different promotions.

Or six discount types that you can create that are managed by us. And so we have the forum that can have all the variables and we can do many things in it. So, you know, the one that we do is it's called a multi value discount. So with this one, you can pick up to a hundred collections with a hundred different discount rates.

So you can say. You know, last season socks are 20%. This season socks are 15%. You know, jackets are whatever percentage, so, and that's all a single discount code for the customer. It's a single discount coded checkout, and like it works super smooth on the

Jay Myers: So you give one link, a customer clicks one link and the site, everything is discounted differently without, with one code. Like they don't actually have to enter this code either.

Daniel Patricio: Exactly. Yeah, yeah,

Jay Myers: not. Yeah.

Daniel Patricio: yeah. It doesn't matter. They don't need to know that it's a code. It's helpful for conversion perspective is my hypothesis that it is a code,

Jay Myers: I think customers probably feel more safe knowing that there is a code there. What if I click on this on my phone and, and I want to open up the site on my laptop. Like I don't have to forward myself like there is a code, but, but ultimately if they don't ever even think about it and click the link, it, it still works.

Daniel Patricio: yeah, yeah, exactly. And, and we, we've done a bunch of stuff for merchants where if you go to their cart and you put in a code, we can actually, like using our API or our SDK, we can actually trigger a promotion on. So lights up like a Christmas tree with cool. That offer or, or that kind of

Jay Myers: Oh, that's cool.

Daniel Patricio: So yeah, so we do, we do that. We've done a lot of stuff with gift, with purchase. So again, we can qualify it on number of items, total spend, number of items or total spend from a certain collection. And you can get it in a certain one. So we, we, we did a lot of work. That was actually the first function we started building.

And then kind of, at the tail end of last year, we started doing a lot with tiers. So it's based on the amount you spend, we'll as you, it'll literally change prices in front of your eyes. You know what I mean? So we say, oh, if you spend a hundred dollars, you get 15% off and then you hit 15% off and then it's boom, everything changes immediately.

We've done that with gifts as well. So those are a lot of the kind of building blocks that we kind of working around. And then, you know, I think the big things we thinking about going into this year is like. Kind of combinations of different discounts, like a gift with purchase and, you know, product discounts and how do you pull off that, which is a, a big multiplier and complexity for us, but like a big one.

And like bundles is a big thing we hear about. It might not be, we are not trying to build a bundling app, but like we hear a lot about merchants wanting to like. You bar three shoes at a hundred dollars or those kind of things. And multi, essentially you know, the thing we do is we work very closely with every, all the merchants that we work with.

And so, you know, at this time, this is a very fun time of year for us. After Black Friday, we say,

Jay Myers: Yeah. You hear everything they did. What went wrong? What went well? How can we make it better for next? Yeah.

Daniel Patricio: What's next? What's, what's the next crazy idea you have around it? And how can we kind of make that happen?

Jay Myers: So the, the, the tier discounts are, you said you're using functions for that, so you're not requiring customers to enter coupon codes. They, it's, it's done. And for those listening, can you explain Shopify functions?

Daniel Patricio: Yeah, so you know, a problem with Shopify discounts is, you know, merchants have a million ideas on how they'd run and create discounts in Shopify. Can only build so many things, right. In terms of the discounts they had. So, you know, for plus merchants, I don't even know how many years ago, it was quite a few years ago.

Five, five plus years, you know, Shopify Plus had scripts and Shopify scripts allowed you to do anything kind of. You could have a developer help you write code in the script, edit and Shopify, and it can do things with discounts. There are a bunch of reasons. Scripts were not great. You know, obvious ones to merchants might be, oh, I need a developer to do this.

Who knows what they look like if they break something. You have to be on plus as like another downside. Right? And then I think on the technical side, there are some things that were concerning about how it worked so. What Shopify ended up doing with functions was, you know, coming to the ecosystem, coming to partners such as ourselves and say, Hey if you wanna create discounts, go for it.

Let's, there's some complex things that you want to do. Tiers you know, gift with purchase even. And we are gonna give you APIs so you can do it. But then for a merchant, they just use an app create. What used to be a script rather than having to write code themselves. And so the powerful thing for us is we can do anything.

You know what I mean? Like a lot of the stuff we've built has been like market specific, so you can like limit discounts to certain markets or we worked with tap Cart and we made discounts only work in a mobile app. So like we can literally code any kind of complexity to work at checkout.

And for a merchant, it's just. Go use our app, have form, it'll work predictably. You know, and, and so it's quite exciting for us 'cause anything's kind of possible on the discounts round.

Jay Myers: Yep. And then it's just clean too, right? There's no, any messy, extra duplicates, anything or, you know, in the backend, that's a great use case with with tap cards. So they're obviously driving more people to download their mobile app to get exclusive di discounts in the mobile app, which you're giving them.

You. So you're powering the discounts in the mobile app as well?

Daniel Patricio: Yeah. Yeah, because, you know, it was, it was, it was a big, a big thing we learned on the web was like the, the stuff we loved to do was around exclusivity. You know what I mean? It was about, oh, I have this VIP segment. I want to kind of get them to do something there. And you know, in looking at mobile, you know the story of mobile apps are like, Hey, listen, it might not be all your customers, right?

But it's it's those 20% of your best customers. They're gonna download an app, they're gonna, they win a one, push notifications when the new I love, they're Tapco merchant too. They're called Malon. Really cool. Hit golf stuff and like whenever they launch a new collection or a collaboration, it sells out so quickly.

And like I almost have the app on my phone just so I can get notifications when cool stuff is coming out first and you can buy it quickly and that kind of thing. And so, yeah, so I think that's it's a

Jay Myers: the, what's the brand?

Daniel Patricio: Malon, M-A-L-B-O-N. Really cool. But yeah, so we started there and then like we learned like some of the most interesting things we are doing, you know, and on mobile apps.

I mean, Shopify hasn't built these features right yet on the online store. So, you know, many mobile app platforms don't have those features. And it's kind of really interesting timing where Tap Cartt is launch their new app studio and basically allows you to kind of build things with React components.

So for us, it's awesome. We can just open up the app and we can build all our complex logic right in there and make it butter smooth. So yeah, we're, we're, we're, the, the fun part now is like basically anything we can offer on the web we offering on Tapco now, which is very fun.

Jay Myers: Super cool. And we were talking, was it last week or a couple weeks ago? With email collection popups. Is that something you're doing already or plan to do

Daniel Patricio: Yeah. So I mean, it's kind of something we've done from the beginning. So, you know, we ran into a lot of, like even merchants that don't discount, do a 10 or 15%

Jay Myers: They have the, so I, I should give some context to my question. Was the email pop up that would come, pops up on a site, enter your email, get 10% off, and maybe an, maybe a, a, a text number as well. And then it either displays it or texts it to you or emails it to you, but you can, after someone enters their email.

They say great. The site has been discounted essentially.

Daniel Patricio: yeah, yeah. So, you know, we spoke to a lot of merchants that were looking at that and they were like. You look at your funnel and you're like, oh, how many emails did we get? How many of them converted and whatever? And we're like, why don't you just get them to buy?

Jay Myers: yeah,

Daniel Patricio: Like the best way to get an email is for them to enter at a checkout, not just in the email.

Jay Myers: yeah.

Daniel Patricio: something we did as you said, is like as soon as they enter in the email, they press enter and then boom, literally in the background we can mark down the prices. So yeah, you know, we started there and then we had some merchants that even wait, I. What if I do a gift with purchase? What if like as soon as I do that and if I spend a hundred dollars, I get a gift with purchase.

Amazing.

Jay Myers: I like that so much better personally. Like just it feels, I, it feels for me when some, when I get an email from a brand saying spend a hundred dollars today, get a free T-shirt or get a shaker bottle with your health supplements or whatever, I am more inclined to buy on those 'cause it feels like something free versus a discount, which is a little bit one step away from a free thing.

It's a little bit less tangible, but there's an actual free thing that will be in my hand, you know?

Daniel Patricio: Yeah. Yeah. I, I totally agree. I find especially that welcome discount, right? Like it's kind of in a bit of a no man's land. It like, it feels like nothing. Yeah. As a customer, you're like 10%. Mm. But then you also surely there's a bigger discount somewhere else, you know? So it actually, I think has a bit of a negative effect, like a, a double, double ended kind of negative.

Jay Myers: right. If they're giving 10% to everyone who just signs up, where's the, where's the real discount here?

Daniel Patricio: Yeah. Yeah. And whereas I think the gift with purchase, it can be many things, right? It can be something exclusive, it can be something unique. It can be something special. It can be something complimentary. And again, you just get away from the math. Just be like, oh, do I want that thing? Not, not kind of there.

So yeah. So we've been doing it for a couple a couple years now. Like from the beginning people have used it and had great results. But I think something we are gonna try this year is kind of setting it up for free for merchants. Like we've always had a free trial where, you know, the first promotion is literally free.

Like our engineers do all the setup, we do everything. It's don't believe me saying the numbers are good. Go measure it yourself please. I'm very happy to. And so it's a big thing I think we're gonna push on, especially at the start of this year, is I think with a lot of merchants thinking about retention, thinking about their own channels, we want to kind of set up as many people as we can on their popup.

Whether that's a gift with purchase offer or percentage off, like whatever that is. Like it's I think it's a gonna be a big focus for us this year.

Jay Myers: Do you, do you, is that something you know for sure you wanna do? Is that something we can detail in like show notes or that's something you're planning to for the fall.

Daniel Patricio: I've got a landing page. We can,

Jay Myers: Oh, okay. Well I'm putting you on the spot here, Daniel. So what is, what is the offer? 'cause I'll, we'll, we'll message this out. So you're, when someone onboards with Abra.

Daniel Patricio: Yeah.

Jay Myers: You're gonna set up the first promotion for free

Daniel Patricio: Yeah. So if, if someone if someone has the email popup on their store that has a discount or a free gift, it doesn't matter to us we'll set it up to be dynamic or to apply strikeout completely free for them.

Jay Myers: Amazing. Amazing. So they can see if it works. Like it's like you're putting your money where your mouth is. I love it. Is there, is this, is there, you said there's a landing page. Is there somewhere someone needs to go? Or is it anyone that installs it? Right now you're reaching out saying, Hey, do you wanna take advantage of this?

Daniel Patricio: Yeah, yeah. Anyone that that installs can, can message us and we'll set it up for them. And we do have a landing page with a bit more info on it and, and that sort of thing. But yeah, they install Abra. If you message us, you'll get me or Ilia like co-founder. We do all the front end kind of supports and, and onboarding and strategy with folks, and yeah, we can get you

Jay Myers: Amazing. Amazing. What is the perfect promotion? If I open up 10 emails on, on, you know, in Black Friday or Independence Day coming up, or Valentine's. There's, there's gonna be 20% off site-wide. There's gonna be spend a hundred get this. There's the free gift. There's is there a certain threshold?

Does 10% not move the needle? Does, do you know, like what, what can you tell me about if you ran a brand

Daniel Patricio: Yeah.

Jay Myers: you have one Black Friday?

Daniel Patricio: Mm-hmm.

Jay Myers: It doesn't have to be Black Friday. This can be like any, any sale coming up. You have one promotion run. What are you running, what are you like, what's your, what's the best one that you would put together?

Daniel Patricio: Yeah. So I mean, you know, I always start from, you know, what are the constraints, right? So for a customer, what are their expectations, right? They want something special. They want something unique. 'cause you know, the first battle you gotta win. Is in the inbox, right? You

Jay Myers: Hmm.

Daniel Patricio: if Valentine's Day is coming up, or like 4th of July or, or Black Friday, you know, they are getting more emails than just from you. And if you're going for 10%, like it's just not gonna get a click, nevermind a purchase, nevermind a big cart, right? There's all the things we want. If you can't get people to click, you got a problem. So, you know, as a merchant, you gotta make it interesting. It's gotta be if it's a gift, it's something that, you know, they want, you know, they want early access to, if it's a discount, it's gotta have the character being bigger.

Right. The other constraint is on the merchant side, is you need to make money. You wanna make money, you know, obviously marking things 50%

Jay Myers: and I don't think you can just joke about that, like we laugh about that, but there is a lot of people that think, oh, it's okay if I lose money on my Black Friday sales. I'll keep these customers around. But what we know that less than, what was it? I think it was less than 15% of people that buy from a store on Black Friday ever even return to that store.

Not let alone buy again. So, no, you, you have to make money. That shouldn't go without saying

Daniel Patricio: Yeah. Yeah. I mean, I feel, I feel like I, I was burned by because I, I used to have a food product, right? And we used to sell grass fed beef jerky. We had some stuff that was bigger, some that was small. We have different size bags. The margins were all over the map, right? Like I, I, there's so many Black Fridays I did analysis from, and I'm like, oh man, we got hosed.

Like we got, we got hosed on this product. Everyone bought the one product. We didn't want 'em to, to do it, and we actually lost five or 10% on like, all those skews. So I think, you know, that's the, the, the challenge. And so I think the number one thing is I would say is don't discount everything

Jay Myers: Mm-hmm.

Daniel Patricio: Be smart. Know your numbers, know your customers and try and change the kind of strategy there. So if that's a per skew strategy of Hey, I'm going off to this category, we are gonna do 20%. This one we might actually do 50% off. Like the upside to that varied strategy is you, in your email, you can say, oh, we are doing 50% off.

Even if your best sellers happen to

Jay Myers: Up, up, up to 70% off. Right? Like you can say that then.

Daniel Patricio: Exactly, and then you, then you get the clicks. 'cause the first battle is you gotta get people a click. You gotta get people to open the email to do their SMS. Then you gotta get them on the site to buy. And so, you know, the next thing I always think about is like average order value. So you know, the reason I love tiers, the reason I love free gifts is like you can kind of triangulate, you know, what is your current average order value and what is your average order value?

You need to make this difference kind of matter and you know. In addition to just the conversion boost that you give by people shopping there, that incentive that gets people to stretch you know, I almost almost think about your tiers of okay, the baseline might be your current average order value.

You know, the tier two might be like 15 plus 15% of your average order value, and then the third tier is like plus 30% of your average order value do that math and. You know, the thing that excites me is like you should have it all in your promotion, right? It should be profitable, it should increase the average order value, and it should have like high engagement.

So those are the things I would say I look for in the perfect promotion. Yeah,

Jay Myers: You're, you're, you're reading my mind here. I love the, the gift with purchase at around 15 or 20% more than a OV. So if you have an average order value of like 75 or $80, you make the, you make the free gift at $90 or a hundred dollars, roughly 15, 20% more. And then that gift. Can be like a $50 item that only costs you like maybe 15 or $20.

'cause it's some type of a promotional item. Like maybe it's your, your, it's a a a t-shirt or a hoodie or a sweater or something. It can, something that, but it's $50 to the customer, so it almost feels like 50% off. Like you're, you're spending 90 or a hundred dollars and you're getting something for 50. So it feels incredibly valuable, but it's not, it's better than giving.

$50 off on the items that you don't want to discount, right. So yeah, I'm a huge fan of that. And I, I don't see enough stores do that. I think it, it takes time and it takes, it's, I, to be honest, it's complicated to set those offers up and I think that's why a lot of stores just default to 20% off Sitewide or 30% off sitewide.

And that sucks that they have to do that,

Daniel Patricio: yeah, yeah. I mean, I, I, I do think it comes down to I think everyone wants to do that, but it can be like hard and you know, our, our, our November was quite hectic 'cause we

Jay Myers: could imagine.

Daniel Patricio: we had, we had merchants you know, e-commerce managers that show up and be like, Hey. So we agreed on, me and my team agreed on this offer, and it's launching tomorrow.

And how do we do it? And then you know, it's always very cool when you can, everyone's oh look, it's easy. It'll take us two hours. Here you go. You ready to go? Here's the link. You know, but I, I, I think, you know, the mystery for me is because it's technically hard, right? Like it's technically hard to do.

It's complicated. And so, you know, I think for this strategy, these strategies to work, it's gotta be technically simple. It's gotta be a good customer experience. Like that's, that's the way it's gonna change, right?

Jay Myers: Yeah, well it, it's amazing. Like we have a number of apps that are quite popular over Black Friday, like our upselling app, and. I think our peak, like it's kind of steady, but we see this real spike and it's, it's only three weeks before Black Friday. It's so, people are you, you'd think planning ahead, but they're not.

They're like, oh shoot, it's, it's, it's November. I'm already getting emails from all my competitors because Black Friday really starts the beginning of November now.

Daniel Patricio: Yeah.

Jay Myers: And then they're mass I gotta, I gotta spin up some promotion. So they haven't put really any thought into what are their margins on the different products?

What's the psychology of the buyer? Which ones, how can they really increase a OV? So, you know, I don't know the exact date that this episode will come out, but it, it's not too early and it's not even Black Friday. It's there's. I think you should be looking for opportunities all year long. You know, like when Amazon runs their prime day sales run something to match it, right?

Like we're like, do yours too, or Independence Day or Valentine's or 'cause there's a lot of noise in the holidays and yes, you should for sure do it, but I think there's a lot of other opportunities

Daniel Patricio: yeah, yeah, definitely. I mean, I think, you know, in Q1 we see people being a lot more strategic of are you launching new products? You know, do you have excess inventory? And you know, I think it's a missed opportunity to not merchandise around that. In Q2 we get a lot more holidays, right? A lot of the gifting, mother's Day, father's Day, you name it.

Right? And then you don't need to explain Q4, but like again, like you said, it's getting a lot more, like the interesting things we see are, like in October, people clearing inventory. Before November. 'cause they have different inventory they wanna sell. You know, black Friday I could talk about for hours on the different playbooks we see.

And then December you see people either trying to, you know, juice their end of year numbers. There's gifting around there. So there's, I think it's like there's always a smart way to do things if you plan ahead, ask yourself the strategic questions, ask which customer you're trying to help here. But there's always kind of an opportunity and you know, even for us this time of the year, a big thing we see is influencers and affiliates, right? Like people are kind of coming back to those channels being like, oh, how can I improve the user experience for my affiliates? Or,

Jay Myers: Mm-hmm.

Daniel Patricio: how can I improve the experience for my upsells, my retention funnels, or whatever a thing is.

So, yeah, I think there's always, always an opportunity. Yeah.

Jay Myers: Super relevant question. I hadn't thought about that. But for affiliate links, can you just tack on the ABRA discount URL details at the end of most affiliate links?

Daniel Patricio: Yeah. Yeah. So the short answer is you can, and the fun answer is like you know. A question we asked ourselves was like, okay, cool, we've got links. They're going out to customers and like we can change things on the storefront. So what can we do with this? And you know, something I noticed when I was looking at a lot of affiliate links from different merchants is like sometimes when you go to the website, there was no experience there was no experience of coming from that influencer.

And the other thing is sometimes there would be competing offers. You know, you'd have an influencer saying, oh, I'm coming in for 20%. And then it's

Jay Myers: Some other popup

Daniel Patricio: Yeah, you're getting 10% off from us and it's whoa. So some, we, we actually worked with social snowball, so they're like an affiliate platform and we we ended up actually designing a bunch of components that actually pull in the data from the influencer, from the affiliate.

So when you click on a link, you can actually have a banner that says, Hey. You know, coming to Daniel Patricia recommended you you're actually saving 15% off and the dynamic pricing is, is applied.

Jay Myers: I mean,

Daniel Patricio: something, yeah.

Jay Myers: that's amazing. That's, that's gotta be good for affiliates too, because they're putting so much effort into creating their content and they want to convert better too. So I would want to work with. Abra could, could you stick it on? Like social snowball is a great platform, but if someone's using share sale commission junction or like even like with Shopify, they have their own internal collabs or kick boosters a great one.

Can you, would it work on the end of most, as long as it eventually ends up in however they redirect on the final URL? Right.

Daniel Patricio: yeah, yeah. The key thing is to, to get on the, on the right URL.

Jay Myers: Because a lot of them pass through UTM parameters.

Daniel Patricio: Yes,

Jay Myers: So as long as long as they pass through UTM to UTM parameters, anything after that should be included.

Daniel Patricio: Yeah, yeah, yeah, yeah,

Jay Myers: Okay. That's amazing.

Daniel Patricio: yeah. And so some of the stuff some of the experiments I've been running. I mean, we tested with Bull and Cleveland. I think we got, which was my store. I think we got like a 30% lift in conversion from how we were doing it before. But something that we've been tinkering with a couple merchants of ours is storing actually the like images.

Jay Myers: Hmm.

Daniel Patricio: the creators. And so we are actually like personalizing the site when you're coming in and saying, Hey, you're coming from Julie's whatever store. And because it's again, for me it's always that consistency of the funnel is the experience, right? So, you know, you are on Instagram, you click a link in bio, it says you're gonna get a discount.

You go to the website, you're like, wait, am I getting the discount? You're screaming about another offer and. Is this Julie's offer, whereas I think like where we've seen the lift is like, Hey, you are seeing Julie's offer. It is 20% off. Look, you can see the process. You get it. Like again, it's all just like kind of basic user experience.

You know what I mean?

Jay Myers: Well, I know the guys at Super Affiliate, do you, are you familiar with them?

Daniel Patricio: Yes, yes. I met up with them when I was in New York. Yeah.

Jay Myers: yeah, I, I, there's probably definitely an integration you can do here, but I mean, that's, that's the whole thesis. Why they built that was they give. Dedicated kind of landing pages that affiliates can curate and they can actually even pick their own products.

So it's like Daniel's picks or you know, but there is a lot to be said that when you, 'cause people have the relationship with the, the influencer and they might not have a relationship with your brand at all. So if I'm coming from. You know, Tim Ferriss's link. I wanna see Tim Ferriss's picks of whatever supplements or whatever it is or something.

So, super smart. I feel like we could, there's, we could talk for hours on this. I, I wanna before we wrap up here, like promotions are a very sensitive thing for, you touched on this a little bit at the beginning. It's like there's brands that say well, we don't do promotions. We're not a promotion brand.

And then there's other ones that. They discount everything and they ruin their ability to charge normal prices. What do you wanna say to the Shopify world merchants about your worldview on promotions and, and your thoughts on how they should be run and what's like a, what's a good strategy for merchants to think about?

Daniel Patricio: Yeah, I think the first thing I would say is yes, be picky. Don't like if, if you like, don't like bad discounts, right? Don't like discounts just because you feel obligated to them. Don't feel obligated to make them unprofitable. You know? I think those are very, very good points. And they should be the found, the first question you kind of answer when you're figure out promotion strategy.

But the, the, the thing I would focus on everyone else is think of the user experience, right? You know, your CFO is not or your accountants is not, selling your product. You know, he's not a UX expert. He's not the guy at the cashier at a flea market. You know what I mean? You're right.

Like you've gotta talk to your customers. You talk to 'em through support, you talk to them through your marketing and through those sort of things. And so, you know, always think about the user experience. If you're, if you're, if you're you know, beating your head against the wall thing, like, how can I get more impact?

How can we increase conversion like we create revenue? I guarantee you there are almost no scenarios where a better user experience doesn't lead to better conversion over time. Right. That's a, I think a fundamental thing I learned at Chaa, a fundamental thing I've always believed that I've stuck with is if you make the user experience, if you make the customer experience better, you will make more money.

And so I think that's very important in promotions where you know, if your goal is revenue you know, try and think about the customer experience. And again, the perfect marriage for me there is be picky about how you discount things and which things you discount. Make intentional choices very informed by your margins.

And then make the user experience butter smooth. And if you do both of those things, you win and your customer wins. You know what I mean? Discounting everything all the time. Makes both people unhappy, your customers and you. So I don't like that strategy. But yeah,

Jay Myers: and I,

Daniel Patricio: to do it well.

Jay Myers: I think it can be such a powerful tool to build relationships. It's not like we, as we typically think, it's a way to like boost sales, but it can be a way to build relationships with. Your best customers you know, run, run, run something where you know everyone that has ordered from you in the past, say, or like hand handpicked people who have engaged with your content on social media or you know, we, in a couple episodes prior to this, we were talking about the, the thousand, thousand true fans, the concept of finding your thousand true fans.

And a lot of stores, they might have 10 thou, tens of thousands of customers. But they really have 300 true, true fans. Right. And so, actually a question for you, maybe you could do this with Abra, but one of the things I, I put out on that show was I said, you know, I. Find your true fans instead of going out and trying to find like millions of customers.

Find who your true fans already are that you have, and your true fans are people that have bought from you 3, 4, 5 times. They're the ones answering questions about your, your brand on social media. If someone I. Says something bad about you on Instagram, they're the one to go in there. Actually, no, this product is awesome.

Or they, they, they answer people's questions. They're retweeting your stuff. They're engaging, they're referring people. Find, find who your true fans are, and maybe it's only 200, maybe it's 300, but create some. Extremely valuable offer for them and email them and say Hey, Daniel we, I noticed you're one of our, you're one of our top customers and I'm emailing only a handful of people, and I'd like to actually give you, as a thank you for, for, for we have hundreds of thousands of customers, but we only have like literally a hundred that I'm emailing this to.

I'd like to offer you this really ex exclusive offer, like something really special. Plus I'd like to give you one link. You can share with someone in your life that you think might also want this. And then generally, like the best way to find more true fans is through your true fans because they know other people like them.

Right? So that could be a wicked promotion. You could probably do with Abra.

Daniel Patricio: Yeah, well, I mean, there's two, two things that come to mind when we talk about that. Like one is we work with a jewelry brand and for people's birthday every year they because I think they actually created a. They limit the function to only people that have the birthday in that month or something like that.

Jay Myers: Oh, no way.

Daniel Patricio: worth purchase and they email it and it only turns on when you get this email

Jay Myers: Oh, that's so cool.

Daniel Patricio: segment. So it's oh, it's your birthday. Congratulations. And the website says that too, right?

Jay Myers: No way. That's that's amazing.

Daniel Patricio: yeah. So that was cool. And then I mean, we do a lot of work with merchants in like sportswear and sports. An interesting thing I learned was like, you know, these sportswear merchants have these big pro programs, which is you know, in skiing it's like everyone that works at the ski hill and is a instructor and is, and is you know, involved in the ecosystem in some way. They get enrolled in these pro programs and like we have a merchant that does like fitness and golf and like a bunch of different things and they, they must have I think last time I checked was like almost like 20.

Unique pro programs for different kind of brands that they work with. And their experience is Hey, you're in this special program and when you come to our website, please log in. And when you do, it's gonna say, welcome back. Here you go, here's your special pricing and here's your unique kind of thing there.

So I think like people like that, it converts better, you know, it converts better than like a, a generic thing when it's like it's unique and it's. People can tell that it's for them and it's not for everyone else. So I love that strategy anywhere and everywhere. Yeah.

Jay Myers: Could you do, you inspired me here. A so you, you set up say, here's the, here's the promotion I, I wanna run through, you mentioned sports. Brands. So say it's a A NFL team or we sell whatever, and I wanna run a promotion that it's a percent off for every point they score. Up to, up to something stupid, up to 50.

Right. But it might, there's, there's other ways that this could do. Like you could do, if you're creating content, let's say your brand has like a YouTube channel or this, you could be like, tune in live every time that I. Our founder takes a sip of his coffee during the show, we're gonna add a percent discount.

So here's my question. Could you send a link to everyone and say, tune in this Friday and here's a special link. And as they score, could I go in Abra or did I have to do it in the Shopify discount thing? Or, but, but could I just oh, there's a score. Change it to six, change it to seven, change it to 10%, change it to 13.

You get the point. And then. They could be shopping and all you have to do is refresh and, and then their prices change. They don't have a, they don't need a new coupon code or anything. They, they would change live.

Daniel Patricio: Yeah. Yeah, I

Jay Myers: That's awesome. There you go. There's the million dollar idea. But if you have any other place you want your customers to tune into, like that would be a wicked way to, to create engagement, right?

Yeah. It's there's probably a lot there. Like the sports teams is just tip of the iceberg, but there's other ways that you could drive, you know, tune into this podcast. How many times did Jay say? And we'll,

Daniel Patricio: You and I both. You can

Jay Myers: yeah, there goes our whole margins for the year.

Daniel Patricio: It reminds me of Toronto Raptors. What was it? Toronto Raptors or the Blue Jays they used to have when the teams are very bad, which is in the early two thousands, I remember it was like, oh, if they score over a hundred points, you get a free pizza slice.

Jay Myers: Yeah. Well, and Subway used to do something, I think with the Raptors where it was like a, oh, I can't remember what it was, but it was some type of discount as well too, as however many they scored.

Daniel Patricio: Yeah.

Jay Myers: man, it's so cool. Like the sky's the limit with really what you can do. It's this has been in inspiring, so I wanna leave people with okay.

You have an offer that if people. Wanna try Abra, I'm gonna put a link in the show notes and I'll put it in the email. And everyone else, they can just go and install it and just say, Hey, I heard about this promotion. They don't need any, any code or anything. They can just, it just, it's running for everyone.

So they, they will get onboarded and their first promo set up. To me that's like a no-brainer. Like I think everyone listening should try it because if it doesn't work, they can just uninstall it and. And say, see you later, Daniel. But if it works like this could be a huge game changer. So, I'll put the details of that in the show notes.

Where else would you like to direct people to, to find you?

Daniel Patricio: Yeah, they can, they can find me on Twitter. Find me on LinkedIn.

Jay Myers: is that the, is it, is that, which one are you most active on?

Daniel Patricio: I think LinkedIn,

Jay Myers: yeah, I see you on LinkedIn quite a bit. You, you do a lot of good videos on there, so I'll put that in there. And is it abra promotions.com?

Daniel Patricio: Yes ever. promotion.com. Yeah. We try to rock quite often and do gods and all those kind of fun things, but yeah.

Jay Myers: Yeah. I love it. Daniel, thank you so much. This has been a ton of fun.

Daniel Patricio: Yeah. Thank you. It was great