In today’s competitive e-commerce landscape, brands are constantly searching for ways to stand out and capture the attention of new customers. Offering incentives can be one of the most effective strategies for lowering the barrier to first purchase and turning browsers into buyers. But not all incentives are created equal. If they’re poorly structured, they may only attract deal-hunters who buy once and never return. To build long-term customer relationships, incentives must be carefully designed to spark initial interest while also encouraging loyalty and repeat purchases.
The Best Incentives to Offer New Customers
Different types of offers work well for different types of brands, but some of the most common and effective include:
- First-Time Customer Discounts – A one-time discount (e.g., 10%–20%) can reduce hesitation and make trying your brand feel like a low-risk decision.
- Percentage-Off Sales (20%, 25%, 33%) – These are simple, easy to understand, and effective in nudging new customers to buy.
- BOGO (Buy One, Get One Free) Deals – Encourages higher initial order value and gives customers more exposure to your product range.
- Free Shipping – For online businesses, free shipping is one of the most powerful incentives. Many customers abandon their carts when shipping costs feel too high.
- Limited-Time Offers – Adding urgency motivates customers to act quickly instead of “thinking about it later.”
- Product Bundles – Grouping related items at a slight discount increases average order value and introduces customers to more of your products.
- Referral Discounts – Rewarding existing customers for bringing in new ones builds trust and leverages word of mouth.
Key Considerations When Offering Incentives
Before launching any offer, brands need to be clear on the “why” behind it. Are you trying to increase overall sales volume, move stale inventory, or attract a specific demographic such as students? The type of incentive should align with your primary objective.
1. Consider Your Margins – Discounts must still be profitable. A 33% discount may sound appealing to customers, but if it eats into your margins, it won’t serve your business long-term. Always run the numbers before deciding.
2. Segment Your Offers – Not every customer responds to the same incentive. For instance, students may be more drawn to percentage discounts, while parents may respond better to bundles or BOGO deals. Use segmentation to tailor offers to different groups.
3. Focus on Customer Lifetime Value (CLV) – The goal isn’t just to drive one purchase, but to attract customers who will return. Consider pairing an initial discount with a follow-up offer in your post-purchase flow to nurture repeat buying.
4. Test and Optimize – Don’t assume one offer will work best across the board. Run A/B tests on discount types, amounts, and messaging to determine what drives not only conversions but also long-term engagement and retention.
5. Build Loyalty Beyond Discounts – Incentives should be a starting point, not the foundation of your relationship. Support them with excellent customer service, quality products, and strong brand storytelling to convert first-time buyers into loyal customers.
Why Incentives Work for New Customers
When done thoughtfully, incentives reduce risk for new customers, build trust, and provide the nudge needed to make a purchase in crowded markets. More importantly, when combined with strategies like segmentation, strong follow-up email flows, and loyalty programs, they help brands not just attract attention—but also create long-term, profitable relationships with their customers.
Incentives at a Glance: Benefits, Risks & Best Uses
| Incentive Type | Main Benefits | Key Risks / Considerations | Best Used For |
|---|---|---|---|
| First-Time Customer Discount | Lowers barrier to entry, encourages trial, easy to communicate | May attract one-time deal hunters who don’t return | New brands building awareness and trust with fresh audiences |
| Percentage-Off Sales (20%, 25%, 33%) | Simple and widely appealing, boosts conversions quickly | Can erode margins if not carefully managed | Seasonal promotions, clearing stock, or appealing to price-sensitive shoppers |
| BOGO (Buy One, Get One) | Increases order value, introduces customers to more products | May encourage stockpiling rather than long-term loyalty | Brands with consumables or products that pair well together |
| Free Shipping | Reduces cart abandonment, highly persuasive for online shoppers | Shipping costs may hurt margins if not factored into product pricing | E-commerce brands competing in crowded markets |
| Limited-Time Offers | Creates urgency, prevents procrastination | Overuse can cause “discount fatigue” and reduce brand value | Flash sales, product launches, or holiday campaigns |
| Product Bundles | Increases average order value, cross-sells complementary products | May reduce individual product sales if bundles are priced too aggressively | Brands with multiple SKUs that work well together (e.g., skincare, tech, food) |
| Referral Discounts | Leverages trust and word-of-mouth, attracts customers who are pre-qualified | May be less effective without a strong, loyal customer base to begin with | Community-driven brands, lifestyle products, or subscription services |
