In the coupon and discount documentation is says;
"If you would like your category discount to be applied only in certain cases (like when a customer is a member of a group that receives the discount), then you can create two categories, one with and one without the discount, and use the discounted category (or not) when adding products to your cart."
I don't understand what differentiates one customer from another? I have created a category with a discount and the products with that category assigned get the correct discount, but that would apply the discount to anyone purchasing the product? I don't see how you assign two categories to one product and differentiate between who is adding a product with which category.
What we are trying to do is apply discounts to products in the store to those customers who are subscribers of our publication. All subscribers would receive $10 off a purchase of $50 or more and 20% off all back issue products.