How Fondue helps merchants replace discounts with CashBack for increased AOV & Customer Lifetime Value

How Fondue helps merchants replace discounts with CashBack for increased AOV & Customer Lifetime Value
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Increasing conversions on first purchase, average order value (AOV), signup rate, and overall customer lifetime value (CLV) - is Fondue too good to be true?

Today’s article kicks off the first of a monthly series where I invite SaaS founders to demonstrate how their tools can integrate into your retention marketing strategy to improve your business.

We’re starting with Fondue, a tool that we’ve been running experiments on for a selection of our clients and seeing really promising results.

Their CEO and co-founder Oren Charnoff agreed to contribute to this piece to share how it works.

DISCLAIMER: this article claims affiliate links. I would never promote a software we do not use with our clients and all future guests will be carefully vetted beforehand.

Now let’s dive into the strategy!

Adam: Oren, please explain briefly what Fondue does and how it improves eCommerce performance?

Oren: Ecommerce has a coupon addiction problem. We solve that.

Fondue is a Shopify app that enables CashBack offers as an alternative to archaic coupon codes. Instead of losing revenue to coupons, CashBack shoppers pay full price and then redeem post-purchase for either cash or store credit. Since not every shopper claims their CashBack, brands get more profit and can reinvest that money into larger offers to increase conversion and revenue.

Brands that replace coupons with CashBack in their popups and welcome series tend to grow that revenue by 30%.

Adam: What data are you seeing when comparing CashBack incentives to traditional discounts for stores across conversions, AOV, and although it’s early days, anything on Lifetime Value you could share would be great?

Oren: Compared against coupons, CashBack on the welcome popup of their email/SMS marketing tends to have the following impact on core metrics for our brands:

  • +19% List Growth - by showing a larger upfront CashBack offer on popups, brands get more email and phone numbers.
  • +30% Revenue - with those larger lists and higher CashBack incentives brands get more sales, and each marginal sale is more profitable. These combine to a pretty powerful revenue impact.
  • +25% LTV - for the brands with the most history using Fondue, we can already see a sustained LTV impact. This is a combination of higher AOV as well as greater reconversion due to shoppers self-selecting to redeem CashBack for site credit to the brand.

But it can get even better than that. Here’s a screenshot of how a $30m home decor brand evaluated their A/B test of coupons vs CashBack on their pop-up and welcome series with pretty insane results.

How Fondue helps merchants replace discounts with CashBack for increased AOV & Customer Lifetime Value | Magnet Monster

Adam: What is the fastest way a store can get started with Fondue and see immediately results linking it to Klaviyo?

Oren: Run a no cost A/B test through your current popup and welcome series to compare the control (coupon code) to CashBack. You can track list growth and revenue stats natively in Klaviyo. Literally all this requires is:

  1. Install the Fondue Shopify app
  2. Change minor copy in your welcome popup


How Fondue helps merchants replace discounts with CashBack for increased AOV & Customer Lifetime Value | Magnet Monster
  1. Replace coupon codes with CashBack links in your welcome email/SMS

“It’s pretty damn easy to test”
- Me

Adam: The use-cases on signup incentives and first-time conversions seem obvious and compelling. For manual campaigns, have you seen CashBack incentives perform as well as discounts, and is this a fundamental part of the brand’s who adopt Fondue’s strategy across the board? Or is Fondue solely reserved for converting first-time buyers and protecting margin at that stage of the customer journey?

Oren: Our mission is to replace every coupon code - we find the best place to start is the popup and welcome series. 

What’s great about the popup and welcome series is that it’s simple to get live and does not require a performance marketing budget. Additionally, Klaviyo, Attentive, Postscript, and others have great A/B testing tools so it’s a neutral place to build trust.

Once brands see those results they almost always graduate to other coupon displacements. Many of our brands use CashBack for holiday sitewide sales, ads, influencers, affiliates, direct mail, and of course other email/sms flows.

Question: Any final words of advice/strategy you’d like to share before we sign-off?

Oren: Discounts work but coupon codes don’t. Coupons are stale, old tech that hurts profit margins. It’s 2023 and recklessly giving away 10%, 20%, 25% to all shoppers is no longer feasible.

Come drink from the Fondue fountain!

Follow Oren on Twitter/LinkedIn

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