384: This Abusive Practice Is Killing Your Margins And How To Fight Back With Kathleen Booth

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You’re listening to the My Wife, Quirt, or Job podcast, the place where I bring on successful bootstrap business owners and delve deeply into the strategies they use to grow their businesses. Today, I have a very special guest, Kathleen Booth. And Kathleen is the CMO of Clean.io, a company that helps e-commerce companies protect their revenue and brand. And in this episode, we discuss a problem that has annoyed me for a very long time. In fact, I and thousands of other e-commerce entrepreneurs have faced this issue for as long as I can remember. And we’re going to learn how to fight back today.

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But before I begin, I want to thank Postscript for sponsoring this episode. Postscript is my SMS or text messaging provider that I use for e-commerce and it’s crushing it for me. I never thought that people would want marketing text messages, but it works. In fact, my tiny SMS list is performing on par with my email list, which is easily 10x bigger. Anyway, Postscript specializes in text message marketing for e-commerce and you can segment your audience just like email. It’s an inexpensive solution, converts like crazy, and you can try it for free over at postscript.io slash dv.

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That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. I also want to thank Klaviyo, who’s also a sponsor of the show. Now, are you working around the clock to build the business you’ve always imagined? And do you want to communicate with your fast growing list of customers in a personalized way, but in a way that gives you time to work on the rest of your business? And do you ever wonder how the companies you admire, the ones that redefine their categories do it? Companies like Living Proof and Chubbies. Well, they do it by building relationships with their customers from the very beginning, while also evolving in real time as their needs change.

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These companies connect quickly with their customers, collect their information, and start creating personalized experiences and offers that inspire rapid purchase, often within minutes of uploading their customer data. Now, Klaviyo empowers you to own the most important thing for any business, the relationship between you and your customers and the experiences you deliver from the first email to the last promotion. To learn more about how Klaviyo can help you with your own growth, visit klaviyo.com slash mywife. That’s klaviyo.com slash mywife.

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And finally, I wanted to mention a podcast that I recently released with my partner Tony. And unlike this podcast where I interviewed successful e-commerce entrepreneurs, the Profitable Audience podcast covers all things related to content creation and building an audience. No topic is off the table and we tell it like how it is in a raw and entertaining way. So be sure to check out the Profitable Audience podcast on your favorite podcast app. Now on to the show.

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Welcome to the My Wife Quitter Job podcast. Today I have Kathleen Booth from clean.io and she is the VP of marketing over there and she is on a mission to help you grow your profits and make smarter marketing decisions by improving the effectiveness of your discount strategies. Now, I’ve actually never met Kathleen before, but her company helps to solve a problem that my online store has had for a very long time and that is a problem of coupon abuse.

02:54
Now, almost as soon as I issue a coupon on my site, it mysteriously ends up on every coupon site on the internet. And in addition, apps like Honey will try a bunch of coupon codes automatically on your site. in this interview, Kathleen is going to teach us how to combat this practice, how it works also. And with that, welcome Michelle. Kathleen, how are you doing today? you. I’m so happy to be here. Thanks for having me. Yeah, it’s a very interesting topic when you reached out and I’ve never talked about this before on

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podcast. I’m hoping to get to the bottom of this coupon abuse problem. It’s definitely a problem that I think affects a lot of retailers. And it’s frustrating for sure. Yeah. So first off, Kathleen, just give me your background and tell me how you got into this coupon abuse or what you guys call digital engagement security. Sure. So I

03:46
owned a digital marketing agency for a little over a decade and worked with companies across a range of different industries. I loved it. was fascinating and fun to learn about, you know, all different types of businesses. So, you know, I did that for a while. I sold my agency in 2017 and I had wanted to go in-house and help high growth startups kind of take it to the next level. I’ve always been an entrepreneur at heart.

04:14
And so I knew if I sold my own company that I’d want to be in that startup world. And so I’ve, I’ve been head of marketing for a series of different companies. The latest being clean.io where I am now. And joined here because it’s, was a really interesting combination of a couple of things I’ve done in my career. I’ve spent my whole career marketing to marketers and, helping marketers. So I’m really passionate about making other marketers successful. And that’s part of what we’re all about at clean.io.

04:44
But then I’ve also interestingly done a couple of stints in cybersecurity. And although I wouldn’t classify us as a cybersecurity company, there are elements of that here. And it’s really rare to have those two things kind of come together, marketing and security. Most marketers, when they hear the word cyber or cybersecurity, they kind of think that’s my IT guy. And so I loved the combination of it and that’s what brought me here. Cool.

05:09
So can you just kind of explain what I think you guys refer to it as a coupon hacking or coupon abuse. Can you explain what that is and why it’s a problem? Sure. So I guess I’ll back up just for a second and say that, that, you know, historically when, when coupons were used, I think the first coupon ever was issued by, I want to say it was like the Coca-Cola company and historically coupons have used, have been used very top of funnel. in marketing speak, you know, at the top of the funnel to get people who

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maybe aren’t thinking they have a need for your product or your service to, to all of a sudden decide they might need to check it out. So the example I love using, of course, is the famous Bed Bath and Beyond coupon, which would arrive at your house, you know, via the mail and you didn’t need new sheets or pillowcases or towels. But as soon as that coupon came, you’d be thinking, gosh, I should go to Bed Bath and Beyond. And maybe there’s something there I might need because I have this deal. And so what was something that was very top of funnel,

06:05
has really changed with the internet and with the way we have e-commerce stores and the way we market digitally, it opened up new possibilities to use couponing and discount strategies at different parts of the funnel. So we can still use it top of the funnel to get people to realize a need that maybe they weren’t feeling, but we can also use them for getting, incenting repeat purchase behavior, getting people not to abandon their carts or to perhaps spend more than they might’ve.

06:35
So there’s all that potential. because of that, think, you I strongly believe coupons and discounting play a really important part in the e-commerce marketing mix. But as you alluded to, the problem is that just as couponing has changed with the internet, so has the way that shoppers can use and redeem coupons. mean, again, not to date myself, but I used to be that person that had the little like,

07:00
coupon organizer accordion file in my purse many years ago and I would cut the coupons out of the Sunday circular and pop them in my organizer and go the grocery store and pull them out. And thank God those days are over, right? You know, it’s funny, you use the Bed Bath and Beyond example. And I remember like, I used to get those coupons so much, like I wouldn’t even go to Bed Bath and Beyond unless I had a coupon. Yeah. So it actually prevented me from shopping there in a lot of cases.

07:29
Yeah. And that’s a great example of how couponing can also, if it’s not done well, right, train your customers to, and also really dramatically affect customer lifetime value. So, you know, the, coupon redemption behavior has changed and, and it started with the kind of emergence of these deal sites. I’ll never forget when I first discovered like retail, me not as a shopper. And I was like, this is great. I can go here and search, you know, pop the, word old Navy in and

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maybe there’ll be a coupon when I buy my son’s school uniforms, you know, and, that was convenient. was convenient, but, it still took us away from the sites we were on. had to go search for coupons and then we had to individually test them all out to see if they might work. And it was a pain in the neck. And the latest evolution is making shoppers lives even easier. We don’t have to search. We don’t have to test. There are these coupon extensions that do it all for us.

08:26
where they have the codes just like these deal aggregator sites do. Only now you can be shopping at Old Navy or whatever store it is that you’re on. You can put things in your shopping cart. And when you’re literally getting ready to put down your credit card and make the payment, the extension pops up and says, you know, we’ve got coupons. We think we can save you money. Would you like to try? And of course, what shopper isn’t going to say yes. And then

08:52
the extension just automatically tests them all for you. It picks the one with the highest discount and it applies it. Or if it doesn’t have a valid coupon, it renders a default state that says, congratulations, you already have the best deal. So that’s sort of like the landscape that has emerged to your question. What is coupon abuse? The answer to that is really that, you know, all of these coupons that are being issued by retailers,

09:21
or designed in most cases for specific purposes. Yes, there are broad coupons that they will advertise on their homepage and give to everybody who comes to the site. But then there are also other coupons like the 10 % they reward to people who subscribe to their email newsletter or the discount they offer when they do podcast advertising or the affiliate codes that they give out and are using to track the performance of their affiliate marketing relationships.

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And those codes are not meant for everybody. They’re meant for, you know, in this case, it was newsletter subscribers or, you know, affiliate audiences or, you know, other particular audiences. so, so the problem arises when those limited use codes get out one way or the other, and we can talk about all the ways they get out and are used by audiences for whom they’re not intended. And that really has two key negative consequences. One is

10:21
It erodes profit margins by lowering average order value for a much larger swath of the customer set than you had intended. And two is it makes your marketing attribution data unreliable. Right. Yeah. You know, what’s funny is, uh, whenever I detect a coup, like I’ve had cases where a coupon code that I just gave to one of my best customers somehow got out and it was a pretty substantial discount. And so now what I do is I track whenever a coupon is used. And then I actually.

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It tells me like the customer journey of that person in terms of the emails. Usually we email that our coupons and whenever something is suspicious now, I immediately just change up the coupon, but that’s kind of a pain in the butt. Yeah. The hassle factor is huge on a number of fronts and good on you for actually looking at your data. I feel like there are a lot of retailers that have this problem and they don’t know it because their data hygiene is just poor. They’re not checking it regularly. And so they could have

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codes kind of running out of control and not even realize it, but it tends to be when people realize they have the problem, it’s because they’re looking at their coupon redemption data regularly. And when they see a spike in it and it doesn’t correlate with some sort of marketing activity, whether that was their activity or something an affiliate has done, you know, when there’s that mismatch, that’s when they tend to realize they have a problem. the hassle factor kind of

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is a big deal, not just for what you mentioned. there is absolutely the, spend hours per week, you know, tracking down which coupon sites have gotten my codes. You could, you know, writing to them, asking them to take them down. Sometimes you get lucky and they do it. Sometimes they don’t, but then deprecating those codes, issuing new ones. Even worse is when it’s an affiliate code. you know, we had, talked to somebody who had a customer ambassador program.

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where the customers weren’t even getting paid. They were just spreading the love because they love the product. And then to have to go to those ambassadors or affiliates and say, Hey, your code got out. I’m going to cancel it. I’m going to give you a new one. Can you please replace it on your website and your Instagram and your emails? Like that introduces a ton of unnecessary friction and relationships that you can’t really afford to have friction in. here’s what gets me. So I track now whenever someone enters a coupon code and it gets denied.

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I actually get emailed and occasionally I’ll go and I’ll stock that person directly on my site. And what I found is that like if they try like two or three coupons and they don’t work, they end up checking out anyways. So if they were to get a coupon, that’s just like lost margin because they would have checked out regardless, at least in my limited, you know, experiences on my own site. your experience is actually very indicative of what we’re seeing in a broader data set.

13:11
Oh, okay. And this is fascinating to me because I talked to a lot of e-commerce retailers and I would say about maybe 20 % of them realize that this is a problem and are looking for a solution to it. And then I think the other 80 % are under the impression that coupon extensions are really good for business. They feel like it helps with card abandonment. They feel like it brings in net new customers, but they’re basing that on not much more than kind of gut instinct. so

13:37
We actually did some A-B testing and we can get later into why we did that and how we did it, but we did some A-B testing to see what would happen if on 50 % of your website traffic, you were able to automatically block the coupon extensions from auto-injecting codes so that all of your visitors would come and those with coupon extensions, they’ll still see them pop up and it’ll still look as though they’re testing the codes out.

14:06
But for half of them, they won’t get a successful code and the other half would. And what we found was that either it had no impact on conversion rates, meaning card abandonment didn’t get worse, or it actually improved conversion rates in some cases. And I think that could be because there was less distraction at the end of the day. People weren’t caught up in the coupon thing. They already had expressed a high intent.

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to buy the product in the first place because they put things in the cart. And I think you’re right. What we also saw was average order value went up by between three and 10%. Well, that’s because the coupon’s not getting used, right? Right, exactly. Exactly. So if you can increase average order value by three to 10 % and not see any negative impact on conversion rates, all of a sudden it starts to be this incredible smoking gun that like, wait, maybe these extensions are not.

15:02
really that good for me. find it interesting that the conversion rate actually went up without the coupon extension. Are we talking about a statistically significant number? It’s not a huge sample and we’re continuing to AB test, should add. So it’s the data is evolving over time, but, so far we’ve seen pretty consistent results and it’s across retailers in a range of different verticals. So it was DPG apparel.

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beauty and like home decor, would say. Okay. Actually our store falls under that demographic. What you know, what’s funny is I never use any of those extensions when I shop because I’m paranoid. Like I know extensions like honey or any Chrome extension. So I’m an electrical engineer and I, I do some coding for my own site and whatnot. And I know that if you have a Chrome extension, they can, they have so much visibility depending on what options you choose when you install. And a lot of people kind of gloss over it.

16:02
I’ve always been curious how apps like Honey actually make their money and exactly how much data they’re actually taking from you. Do you happen to know that? Oh, I love this topic because I don’t think anybody really has looked under the surface. um, Honey was purchased by PayPal. think it was about a year and a half, two years ago for $4 billion with a B. Yeah. Crazy. Crazy. Right. And there’s a famous saying, I’m sure you’ve heard it.

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That is, if you are not paying for the product, you are the product. Yep. And so almost everybody who uses these extensions, like consumer level users who are shoppers, you’re not paying for it. So yes, you are the product. They the reason that PayPal, a payment processor purchased honey and the reason, by the way, that Capital One purchased what was Wikibuy, which is now Capital One shopping. Like there’s a pattern. It’s all these financial services and payments companies. It’s because they want

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the data. They want deeper insight into what you’re spending, where you’re spending it, how much you’re spending. And when you start to think about the fact, like let’s take Capital One, the fact that for many people, they have their credit cards there, they have their bank accounts there, they have savings accounts there. They’re developing this insanely well-rounded financial picture about their users that if you have any concerns about your own data privacy, I think it’s a little alarming.

17:27
Yes, the data is one of the products that they are building with these extensions. But the other way they make their money is through affiliate fees. Honey and Capital One Shopping themselves are affiliates. And many of the retailers we talk to who do have code issues will tell us that they’ve written to these companies and said, hey, you’ve gotten either my wholesale codes or some other codes that are not meant for general consumption. We need you to take them down.

17:57
Sometimes the company will answer and do it. Other times the answer will be, hey, if you join our partner program, which is effectively their affiliate program, you’ll have more granular control. This is honey’s affiliate program or whatever the app or exactly, exactly. So the message to the retailer is join the program will give you more control. But what happens when you do that is in exchange for control, you’re then agreeing to pay them a commission every time.

18:24
somebody with a coupon extension shops on your site. And that’s a problem for a number of reasons. I mean, obviously you’re already taking a hit on your average order value when the coupon is used, but then you’re on top of that, you’re paying a commission. There’s a deep well of issues here that I could go into if you want surrounding things like how it affects your marketing investment decisions and why your customer acquisition cost calculations need to be tight and also how the cookie that they drop

18:53
can affect. this is where I’m lost. So they get an affiliate commission off of whatever company you’re shopping at. Is that correct? Yes. So if I’m the shopper and I go to your store, and I have a coupon extension present, if you are a part of their program, if you have joined their affiliate program,

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and I shop at your store and the extension’s present, whether I have a successful coupon or not, this is where it starts to get really interesting. If I have the extension there, it’s going to claim credit for the sale and you’re gonna have to pay them a commission on that sale.

19:35
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

20:03
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

20:33
And if you tell Steve that I sent you, you’ll get a hundred dollar discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L.com. Now back to the show. I see. So I guess the terminology is what’s confusing me here. You’re joining their affiliate program, but you’re paying them for a conversion. So it’s almost like they’re a member of your affiliate program. Correct. So the merchant, well,

20:57
Although really it’s the merchant opting into, I’ll just use Honey as example, opting into Honey’s program. But then Honey becomes an affiliate for the merchant. Got it, got it. Okay. So this is a little devious here because this, I didn’t know that this could happen, but Honey as an extension on your browser can actually insert an affiliate cookie onto the user’s site, to the user’s computer. Yes. Okay. This is why I’m paranoid about extensions like Honey and

21:27
just anyone out there who’s using any Chrome extension, depending on what permissions, which most people don’t read, you can literally be passing all of your web browsing data, everything over to the app owner of the Chrome browser. I don’t know what honeys are, because I never installed it, but do you happen to know what information they track? Beyond coupons, I’m not exactly sure. I’d have to look deeper into their terms of service. when you sign their

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their terms of service, I know in their privacy policy, it explicitly states that you’re giving them permission to effectively scrape the codes that you manually enter. So that’s a big part of how they get their codes is if I’m your VIP customer, like you mentioned that as an example, you send somebody a really nice discount code, if they have honey in the browser, and then and that all the extensions work the same way. And then they go and they enter that code that you’ve given them.

22:23
it’s going to scrape it and then it’s going to share it with everybody in their database. I see. So the person that you’re giving the code to isn’t deliberately sharing their code, right? It just so happens they probably have an extension that’s that’s track. mean, they could be because there certainly are ways to to manually give codes to the extensions. And that is a concern, particularly if you’re working with affiliates. Yes, definitely. It’s actually it’s very devious. And then you’re paying affiliates for sales that they didn’t drive.

22:53
Right, so just to be clear to the people listening, so first of all, an affiliate is when someone’s like a virtual salesman for your store and oftentimes you issue them special coupon codes where if someone uses that coupon code, they get affiliate credit and you pay them a commission. So I guess if you’re devious and you’re an affiliate, you could give sites like Honey or Capital One your coupon code for a widespread distribution and then you get paid out for sales that you didn’t even refer, is that correct? That’s right and it works the other way too, which is that

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If you’re an affiliate, you could legitimately have shared your code with your audience. And if one of your audience members goes to the site and tries to use the code, but has Honey present, if Honey has a larger coupon in its database, it’s going to overwrite the affiliate code and they won’t get paid for a sale they really did drive. it cuts both ways. see. So now see, it’s funny. I had my buddy, Kevin Stecco on the show, maybe

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you know, half a year ago. And we talked about coupons, particularly, and how like margin sucking like a coupon is like you don’t even think about it until you run the numbers. But like a 10 or 15 % coupon means that you have to generate significantly more sales than you think to make up for that discount. So this is a big problem. If your coupons are just getting used willy nilly. It’s it’s a huge problem. For you know, many of reasons you mentioned, like we talked about customer lifetime value, if

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coupon extension users, that extension is present every time they come to your website. And so the expectation would be that they would use it every time they come to your website. So you’re not necessarily going to make it up on the backend, which is what most companies hope to do. But it’s also really frightening when you think about the fact that it’s coming in just at the last mile of the customer journey. And you’ve already, when you think about customer acquisition costs and micro conversions,

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you’ve already essentially paid to acquire that customer through your Facebook ad or, whatever other marketing channels or campaigns you’re running, there’s a cost associated with those. And then at the end, you’re also paying this cost of the discount from a coupon extension that really had no part in bringing that person to your website. Here’s what I want to ask you. You mentioned earlier something about attribution. let’s say someone clicked on a Facebook ad for the conversion.

25:19
These apps, they’re not going to override that, are they? It depends. And I mean, we’re still learning a lot about this. What I will say is that I do know if you are, if you are part of their affiliate programs and you’re using an intermediary affiliate platform, such as a share a sale or something of the like in, those cases, it does, it does drop.

25:47
a first party cookie that overwrites attribution. Really? Okay, well that’s a huge problem. Yes. Okay. Cause then you don’t even know like it affects your advertising spend and all that stuff as well. That’s exactly right. And it does that. It overwrites attribution, whether it successfully applies a coupon or not. So it might test coupons, not find one that works and it still claims credit for the sale. Okay.

26:14
Here’s just a random question, because you know, Apple has been combating like this practice of cookies. Do you see this problem going on even after Apple is done with all the, it seems like everyone’s moving away from cookies. I actually see the problem getting worse because with iOS 15, that is going to essentially include browser extensions in, in the iOS 15 sort of Safari browser. And so.

26:43
And there are a lot of other browsers that are adding mobile capabilities. Really until now, coupon extension problems have been limited to desktop shoppers, which for most e-commerce stores, as you I’m sure know, are the minority, right? So it’s a hassle, it’s a problem, it’s affecting things, but it certainly isn’t as dramatic as it could be. And I actually think it’s going to get much worse before it ever gets better because of the direction that a lot of these browsers are moving in to incorporate.

27:10
extensions. And in fact, I believe, if I’m not mistaken at Apple’s developer conference where they rolled out iOS 15, honey was actually one of the partners that participated in that event. And they made a big announcement about their partnership with them. Okay, so what you just brought up something that I wasn’t aware of. So these extensions, they don’t work on mobile. They haven’t until now. Okay, interesting. Do know how widespread of a problem this is? Just kind of curious how like how many app installs do they have?

27:38
collectively, like the big ones. I mean, it’s millions of people and it’s growing. It’s growing extremely quickly. I, you know, I don’t know if you’ve seen the ads. I was really struck this year. started during the Superbowl when I saw ads with like Samuel L Jackson in them for Capital One shopping. And, you know, all of them have deep pockets and they’re advertising aggressively. And it used to be that

28:00
Coupon extensions were mostly used by women and particularly younger women, which is why you see verticals like apparel and beauty having particularly severe problems. That’s really beginning to change with those, the advertising campaigns they’re doing that are, in my opinion, clearly targeted at expanding the male demographic that uses them. The problem is definitely more severe in the United States. As I mentioned, it’s certainly more severe on desktop. I think on average, what we see is that

28:30
for companies that are e-commerce retailers that have coupon extension problems, it usually affects about, and this is gonna be an average of course, but around 10 % of orders. And that number will just grow. Right. Okay, I think we’ve defined the problem well enough at this point. Do you have anything to add before we talk about solutions? No, I I think we’ve covered it pretty well. Okay. So, Aisha, do you wanna just talk really briefly about what your company does and how it works?

29:00
Sure. So we’ve been around since 2017. And when we first started, our initial product was in the advertising technology space. We have a product called Clean Ad that protects large online publishers. Our clients include companies like the Boston Globe and CBS Interactive. We protect them from malicious ads delivered through programmatic marketplaces. And because of that, why that’s relevant to this conversation is that it’s all about

29:28
essentially helping website owners control the third party code that executes on their site to protect their user experience and their brand. And because of how our script sits on page, we see a lot of third party code. And it was in the course of doing this on the, think it’s like 8 million websites where our code lives right now. We saw these unusual other types of what are called client side injections and cybersecurity terms, which is another word for what browser extensions do, you the behavior you described earlier.

29:58
where they can go on sites and execute script. in some cases it’s benign. And in other cases, like with coupon extensions, it actually has a material impact on the business. And so that’s how it came on our radar. We built this new product called Clean Cart and it came out of private beta in March. And what Clean Cart does very simply is it allows online retailers to prevent coupon extensions from auto-injecting codes at checkout. It does not prevent shoppers from entering codes manually.

30:28
And it also doesn’t change the user experience. if somebody comes to your website and they have the extension present, it will still pop up. It will still look like it’s testing codes. It will just render that default state and say, congratulations, you already have the best deal because we’re blocking it on the backend. So what’s interesting about this is I was going to write my own thing because I noticed that these extensions, like, honey, they try them. And if they fail, like right now I have an alert whenever a coupon fails.

30:57
How does your technology differ from like, let’s say they tried twice and I just block out all coupons after that, after they’ve failed a couple of times. So what I love about our product is that, like I said, it doesn’t affect the user experience, which is paramount. And because of the way the coupon extensions function, you know, they watch what codes are successful and

31:23
When over time, as they start to see these codes become less successful, it effectively trains them to drop the codes from their databases. And so not only do we immediately upon installation of the script eliminate this problem, because you no longer have the auto injection over time, we eliminate the codes even from appearing in the databases so that if somebody did choose to visit the site and see if there was a code and then manually type it in over time, they’ll find fewer and fewer of your codes there. But

31:53
You know, so that’s, that’s sort of the benefit in terms of how the coupon extensions work. But the other side to that is that I think, you know, in a perfect world, we would all use, um, single use codes, right? Sure. In our email, in our SMS, what have you, but there are use cases. And I described some of them earlier, be it affiliate marketing or podcast advertising or display ads, you know, there are use cases where a single use code simply isn’t possible. And so the best thing about it to me is that it frees you up.

32:23
to use discount codes in the way they were intended without having to think about whether they’re gonna leak. It gives you peace of mind and it you don’t have to spend those hours per week doing all that manual stuff. Yeah, yeah. No, I mean, I see the value there. You know what’s funny, Kathleen? I’m just a very paranoid person when it comes to this code. So like I’ve, I’m so careful about like the plugins and everything that I installed because when you install code on your own website, like willingly,

32:50
that company has access to everything also, right? So like I once used an extension, which I won’t really mention publicly, I found it like, cause I look at the web traffic and I noticed that they were taking all this information and sending it off to these advertising firms. So they were actually taking my customer information without my knowledge and sending them off to some other agency. And that made me very mad.

33:18
And I stopped doing so now today I’m like very paranoid about everything that I install, whether it be a Chrome browser extension, which is probably just as bad. Um, so I’ve just cautioned. don’t want to make everyone listening to this paranoid, but like if, if something is free, then that usually means like, like you mentioned earlier that they’re selling the information somehow. You know, Steve, you totally just described.

33:43
at the heart of what digital engagement security is all about. And so I love that because it’s about the fact that the way we engage with our customers, our prospects, our audiences, it’s online these days. And for most of us, it’s either entirely online or a good portion of it’s online. And we all saw the same thing. We all saw trust, right? And so we want to create an environment that’s trustworthy for them. We want to also create an environment where our businesses can thrive. And I always say this,

34:12
As a marketer, my whole career, I’ve been told you own your website and it’s really not totally true. mean, legally you own it, but from a user experience standpoint, and, and when you think about what happens on your site, you don’t really own that because you just said it like the way modern websites are built. They’re.

34:35
you know, 99 % of them are built either on some other platform or CMS, you know, or shopping cart platform, which is third party code. We add apps and plugins to our websites, which are third party code. And then our visitors come to our websites, bringing with them these browser extensions, which are third party code. Our websites are rife with third party code that we don’t own or control. so digital engagement security is all about like,

35:04
understanding that doing your due diligence on what that third party code is and being able to control it to the extent possible so that you’re able to protect your user experience and your brand. Yeah, you know, I was just thinking about that experience where I was using code where information was being passed. And again, I’m not trying to make everyone paranoid, but like if someone has a little piece of JavaScript code on your site, they can literally scrape everything that’s typed into every form field.

35:32
And without your knowledge, they could be sending like all these email addresses somewhere randomly and kind of get you in trouble for two in case someone comes back and says, Hey, that I was the only the only shop site I shopped at was yours and my email got leaked. And that was like a unique email that I only used to shop at your store. I don’t know. I’m just paranoid. It’s pretty scary when you start to think about it. And this is, know, me putting my cybersecurity hat back on because I did spend a few years in that industry and it was, it was eyeopening to me as a marketer and

35:59
The thing that I wish marketers cared more, there’s a lot of data these days that points to the fact that marketing departments have bigger IT budgets than IT departments do in many companies because of all the software we use. Like I said, at least we think we own our websites, but certainly in terms of responsibility within a company, we’re generally responsible for the website. I do think marketers should care more about this because

36:27
It really affects our ability to do our jobs well, and it puts us at risk if we’re lazy or we’re not careful about the code we put on our sites. It can have massive ramifications. So I would imagine you guys just came out of beta, so you’re probably only targeting larger customers. Like what can the little guy do on a low budget to prevent these practices from happening? Well, and I will say we’re not necessarily targeting enterprise. mean, we’re…

36:55
very mid-market at the moment where we came out specifically targeting Shopify plus users, but we’re on the cusp of broadening it pretty dramatically. And so if this is something you’re interested in, go to the site and check it out and we can put you on a wait list and let you know when we expand. beyond that, I’m not here to say our product is the only solution at all. think there are a number of ways that retailers can tackle this. The worst solution, but it certainly is one, is just stop using coupon codes.

37:24
I wouldn’t recommend that. think that that ties your hands behind your back in terms of how you go to market. But it’s an option. I think the middle ground is what I like to call practicing good coupon hygiene. And a lot of what you talked about that you’re doing for yourself falls into that category. It all starts with a couple of things. Number one, have a single source of truth for the codes that you are using. You would be shocked at how many retailers I speak to.

37:54
who, when we start to report to them on the codes that are being attempted, they come back with, wow, I didn’t even know that code was active. And it’s because they’re using, they might be using their Shopify instance plus a Clavio, plus an SMS plugin, and they’re generating codes in all these different places. And it might be different people who are generating them. So this is as easy to solve as just creating a spreadsheet where you make your whole team enter any codes they create.

38:21
And you take a note of when the date they were created. And so then you have a process in place for going back to check on what’s happening with them and understanding when they should be expired. That’s number one. Number two is what we talked about earlier, which is getting in a regular cadence of looking at your data. watching coupon redemption patterns is really important. And I would suggest people do it weekly so that if something does happen, if your code leaks, that you’re able to

38:50
identify that quickly and take steps to fix it, either by contacting the company that it leaked to and seeing if you’re successful and appealing to have it taken down, or if that doesn’t work, canceling the code yourself and taking steps to reissue a new code to whoever’s using it. And then I guess the third thing would be do use single use codes wherever you can.

39:15
in your email marketing, your SMS marketing, et cetera. There are a lot of good resources for that these days. So if you’re able to do that, do it. There might be cases like we described earlier where you’re not. And that’s when that good coupon hygiene, those regular check-ins and looking at the data is so important.

39:35
I just wanted to let you know that tickets for the 2022 Seller Summit are now on sale over at Sellersummit.com. Now, what is the Seller Summit? It is the conference that I hold every year that specifically targets e-commerce entrepreneurs selling physical products online. And unlike other events that focus on inspirational stories and high-level BS, mine is a curriculum-based conference where you will leave with practical and actionable strategies specifically for an e-commerce business. And in fact, every speaker that I invite

40:02
is deep in the trenches of their own e-commerce business. Entrepreneurs who are importing large quantities of physical goods and not some high-level guys who are overseeing their companies at 50,000 feet. The other thing I can assure you is that the seller summit will be small and intimate. Every year we cut off ticket sales at around 200 people, so tickets will sell out fast and in fact we sell out every single year many months in advance. Now if you’re an e-commerce entrepreneur making over 250k or $1 million per year in revenue,

40:29
We are also offering an exclusive Mastermind experience with other top sellers. Now the Seller Summit is going to be held in Fort Lauderdale, Florida from May 4th to May 6th. And as of right now, we’re almost already sold out of Mastermind tickets and we’ll be raising the price every month leading up to the event after Cyber Monday. For more information, go to sellerssummit.com. Once again, that’s sellerssummit.com or just Google it. Now back to the show.

40:55
You know, it’s tough because I considered going with dynamic codes, but there’s an overhead with doing it that way. So I’ve always, like in my pre-purchase campaigns, I issue a static coupon that I rotate periodically, like maybe once every quarter. recently, and by recent I mean maybe in like the last year, those coupon codes get out right away. And that causes even more overhead because I got to go and switch up the coupon and the sequence, the emails that actually give out that coupon.

41:24
So I was thinking about what I described earlier, because I noticed a pattern when these coupon sites, like people will try like two or three of them, and they fail until they find the right one. In a lot of cases. So if you can just somehow just automatically deny every coupon after they failed twice, I think that might solve the problem. Or do everything that you said.

41:50
My recommendation personally would be to issue less coupons in general If you guys go go do a search for Kevin Steck on my podcast We actually ran the numbers it it sounds like math and it sounds boring But it was actually eye-opening like how much margin you’re losing by giving out these coupons if you’re gonna give out coupons only give them on special Occasions to make them more valuable. Otherwise you have that bed bath and beyond syndrome as well where people won’t shop at your site anymore unless they have a coupon so

42:18
Yeah. And I would add there are little UX tricks you can, you can use like instead of having a box at checkout that people see and can enter a promo code, have a link that they need to click that then opens the box. Ah, yes. That’s yeah. It’s little things like that, that, you know, the people who legitimately have codes, who you’ve sent a code to, who’ve come to your website because of that code, they’re going to hunt that link down. They’re going to click it they’re going to enter it in. And that’s great.

42:47
But for others who are what I would call more opportunistic kind of coupon extension users, they’re not going to go through all that because they’re relying on the convenience factor to get them the discount. That’s a good point. I remember a long time ago, I think I wrote a blog post on this. Like if you have your coupon code, like right next to like your credit card field, like my natural inclination is just to go straight to the web and look for a coupon code. Yep. But if you put it in more like an out of the way place, like you just mentioned,

43:17
Like someone who has a code is going to look for that box, but someone who might not necessarily have a code isn’t going to necessarily look for that box specifically. That’s exactly right. And there’s actually research that shows that if people see a promo code box, it makes them feel like there is a valid code out there. And if they don’t have it, it incents that behavior. So you’re spot on. Yeah. There was another thing, but this is like a really old blog post, like renaming it coupon to like voucher or something like that. Also was another.

43:47
So when you give out a coupon, say, look for the voucher box, but someone else who wouldn’t have gotten that email might not necessarily be looking for that box. That’s great advice. Yeah. So Kathleen, this has been great. I have not talked about this for a while. It’s actually not like a topic that I often talk about, though, or people talk about, even though it’s a widespread problem. Like I hate it when I see someone use a coupon code, especially a larger one.

44:14
that shouldn’t have gotten out. And I have a pretty good idea. Maybe it’s because I’m a smaller shop, but I know like what the codes are associated with everything. Like I don’t have multiple people handling coupon codes aside from my wife, I guess. I’m sure like all the shop owners who are listening to this, just check your coupon redemptions. I think you’ll be surprised at how many coupons have leaked. Yeah, definitely worth looking at the data and do it regularly because

44:41
You might not have a problem today, but it doesn’t take long. Or do what I do. Like not everyone’s going to have time to look at it regularly. Just, just have yourself get notified whenever some weird activity happens or whenever there’s a special coupon. So this is what I do. If I have a high value coupon out in the wild, like out there, like I’ll just have it email me whenever that coupon is, is tried to be used or used. So I’m just aware of when it happens so I can just, you know, make a note of it.

45:10
Cause I know for a lot of these larger coupons that I give out, they’re not meant to be used all the time. Like if I get more than like a couple of redemptions a month for that coupon, something’s wrong. Cause these are coupons tied to specific customers that are larger customers of ours. Yeah, that makes sense. So Kathleen, where can people reach out to you if they have any questions or anything about related to your company and your technology? So the company is clean.io, which conveniently is also our website address.

45:39
And the product is called Clean Cart. We do offer a 14 day free trial. So if you go to the site, you can sign up and test it out. And I’m happy to also answer any questions. I’m really active on LinkedIn. And so if you have questions about this, if you want to talk, or if you have any feedback, I’d love to hear it. Just connect with me, Kathleen Booth on LinkedIn. Okay, great. And right now, just, just to be clear, it’s only for Shopify plus customers, or is it

46:04
for just shop. That’s right. And I would say if I had to guess within the next month to month and a half, we will be on more platforms. So definitely if you come to the site, you’ll see there’s a button in the hero of the product page that says not Shopify plus question mark join the waitlist. I just encourage you to hit that if you’re interested, fill it out and we’ll ask you what platform your site is built on and then we’ll notify you as soon as we are live on that platform. Okay. Well, thanks a lot, Kathleen for coming on.

46:33
This is very interesting. Thanks for having me. This was a ton of fun.

46:39
Hope you enjoyed that episode. And if you have a coupon sharing problem like I do, go check out clean.io. For more information about this episode, go to mywebquaterjob.com slash episode 384. And once again, I want to thank Klaviyo, which is my email marketing platform of choice for e-commerce merchants. You can easily put together automated flows like an abandoned card sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywebquaterjob.com slash KLAVIO.

47:06
Once again, that’s mywifequitterjob.com slash KLAVIO. I also want to thank Postscript, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is the next big own marketing platform and you can sign up for free over at postscript.io slash dv. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash dv. Now I talk about how I use these tools on my blog and if you are interested in starting your own e-commerce store, head on over to mywifequitterjob.com.

47:36
and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.