I’ve gotten into the habit of interviewing Dennis Hegstad about the Shopify app. He first appeared on this podcast in late 2020 to talk about his LiveRecover, an SMS-based cart recovery program. In early 2022, he returned home after selling his LiveRecover and acquiring his Shopify app, his OrderBump, for facilitating upselling.
he’s back He is currently building his Vigilance, an app for monitoring and blocking coupon code insertion.
In a recent conversation, he and I discussed the financial damage of leaked coupon codes and Vigilant’s solution to prevent their use. The audio of the entire conversation is embedded below. Transcripts have been condensed and edited for clarity.
Eric Bandholz: What are you building now?
Dennis Hegstad: This is the third Shopify app called Vigilance. Track and prevent coupon code leaks. You can find out the cost of the leak and where that money went, including Honey, Capital One Shopping, and Piggy. You can block these companies from inserting codes during checkout. We are he one of the first providers of checkout injection data and protection.
You can’t stop leaks, but you can stop code being injected at checkout. However, some brands don’t care if the code is inserted because they want the sale and only pay, say, 10% commission.
Either way, give us the data to monitor and keep 10% of it if you want.
Bandholz: You mentioned honey. How do you interact with the app?
Hegstad: Let’s say you have Honey installed in your browser and you access the Louis Vuitton e-commerce site. Louis Vuitton does not offer discount codes. Honey will say that the merchant’s trade cannot be found.
However, if you visit Fashion Nova’s site, Honey may give you 12 codes. This is because the brand is offering significant discounts. Get 10 or 12 codes and Honey says it has found the perfect deal for you. It’s 40% off. In fact, Honey has tried 12 codes that are all 40% off.
Rotating Honey codes at checkout can be time consuming and frustrating for shoppers. When honey is blocked, checkout abandonment rates go down. Some brands, such as Louis Vuitton, do not have codes. At these checkouts Honey says the code is not available.
Merchants using our app can generate the same message (no code) at checkout.
Bandholz: So with Vigilance, consumers don’t have to leave the checkout line to find a coupon code.
Hegstad: That is correct. Track checkout events for discounts. You can tell brands whether an order was inserted with a coupon from a specific extension. It also tells you if the coupon code was copied and pasted. Usually from social media posts or coupon directories. Shoppers who find and copy-paste coupon codes on Google Search are generally more likely to buy than shoppers who passively allow Honey to apply the code.
You can provide specific events to determine what code has been inserted, copied and pasted, or typed. When you type a code, it guesses that you read it, especially if it’s a simple code like Beard15.
Bandholz: What is the price for merchants to use Vigilance?
Hegstad: The basic plan is $199/month and allows up to 5,000 orders. A merchant with 5,000 monthly orders and an average ticket of $40, in monthly revenue he makes $200,000, or $2.5 million annually. That’s the bottom of Shopify Plus.
Most of our eligible merchants are large, with at least 10,000 orders per month. We bill these customers $350 per month. This saves over $3,000 each month on infusion blocks alone.
Brands that ramp up marketing with influencers and affiliates and allow injections are losing thousands of dollars a month. For 1,000 orders, one code leak can lead to 900% overpayment.
Bandholz: Let’s discuss finances. Externally funded for vigilance.
Hegstad: Raised $250,000 from Shopify and operators in the direct-to-consumer ecosystem. These investors do not actively advise or work for us.
We fully invested in our two previous apps, OrderBump and LiveRecover. On alert, I had a friend in the industry who wanted to invest. For me, it wasn’t so much about money as dating professional colleagues. Achieving our goals should result in significant capital returns for all investors.
Bandholz: Where can listeners connect with you to learn more about vigilance?
Hegstad: i’m on twitter @dennishegstadListeners can get Vigilance on the Shopify App Store or on Vigilance.io.