How to use promotions differently for new and returning customers
Here’s the thing—not all customers are the same. Yet, many eCommerce marketers fall into the trap of using the same promotions for everyone.
New and returning customers have different goals, behaviors, and expectations when shopping online. Creating personalized promotions for each group can increase conversions, drive loyalty, and enhance the shopping experience.
Understanding the two types of customers
To create effective promotions, it’s critical to understand what motivates your audience and how they behave.
Understanding these distinctions sets the foundation for tailored promotions that align with customers’ mindsets.
New customers
New customers are often trying out your brand for the first time. They’re price-sensitive, curious, and a little cautious. They want to test the waters before fully committing.
- Spending more time browsing than buying
- Comparing your prices with competitors
- Abandoning their cart without completing checkout
Returning customers
Returning customers are familiar with your brand and trust your products. They often seek value, exclusivity, and an elevated customer experience.
- Shopping specific categories or repeat purchases
- Adding more items to their cart
- Higher average order values
Average share of new vs returning customers on an eCommerce site
Understanding the balance between new and returning customers is essential for optimizing your marketing strategies. On average, ecommerce sites typically have a higher proportion of new customers than returning customers, but it can vary depending on your specialism.
With this knowledge, it becomes crucial to implement effective strategies to attract and retain new customers while providing value and an elevated experience for returning customers.
Promotions for new customers
Attracting new customers reduces friction and makes trying your brand as tempting as possible. Here’s how you can effectively incentivize them.
Welcome discounts
Nothing says "welcome" quite like an introductory discount. Offering a percentage off their first order creates a low-risk, high-reward opportunity for customers to try your brand.
Welcome discounts are particularly effective on eCommerce platforms, where price-sensitive customers need that initial push to click "Buy Now."
Email sign-up incentives
Capture email addresses to turn first-time visitors into potential loyal customers. Offer something valuable in return for signing up, like free shipping or a sitewide discount.
This boosts conversions and gives you a channel to stay connected with them for future promotions.
Low-risk introductions
Allow new customers to explore your products without a significant financial commitment. Trial-sized items, introductory bundles, or fixed-price deals are great ways to showcase your bestsellers.
These offers help newer customers leap while giving them a positive starting experience.
Promotions for returning customers
Retaining customers is all about giving them reasons to come back. If they’ve shopped with you before, they’re already invested in your brand. Develop promotions that reward loyalty and encourage them to spend even more.
Loyalty rewards
Show your appreciation by offering a loyalty program with benefits like points, discounts, or free items after repeat purchases. To make it more engaging, introduce VIP tiers or double-point events.
Loyalty programs build long-lasting relationships and incentivize frequent shopping.
Upselling and cross-selling offers
Returning customers love relevant product recommendations. Use their purchase history to suggest upsells or complementary items and offer a small discount to sweeten the deal.
Personalized suggestions drive additional sales and enhance the shopping experience by showing you understand their preferences.
Exclusive VIP discounts
Make loyal customers feel special with exclusive offers they won’t find anywhere else. Early access to sales, invite-only shopping events, and limited-run products can create exclusivity and deepen loyalty.
These exclusives make returning customers feel valued, ensuring their continued support.
The role of data and personalization
Want to take your promotions to the next level? Use data. Data-driven personalization is a game-changer for optimizing campaigns and tailoring discounts to individual preferences.
- Dynamic offers: Use customer behaviors (e.g., browsing history, cart activity) to deliver targeted promotions in real-time. For example, a customer who lingers on a product page might receive a quick pop-up offering 10% off.
- Purchase history: Develop offers based on what customers have previously purchased. For example, a returning buyer of protein powder gets an exclusive deal on workout supplements.
- A/B testing: Create multiple promotion versions to see what resonates more with your audience. Two test groups, one winning strategy. Simple.
Personalization enhances the customer experience and makes your brand stand out in a competitive retail landscape.
Common pitfalls to avoid
While promotions work wonders for your business, common mistakes can limit their impact. Here’s what to avoid.
1. Over-discounting for returning customers
Heavy discounts for loyal customers can erode your profit margins. Instead, focus on long-term loyalty-building tactics like points-based systems or exclusive perks.
2. One-size-fits-all promotions
Treating new and returning customers the same overlooks each group's needs and behaviors. Segmentation is essential for better targeting and higher engagement.
3. Ignoring data insights
Promotions built without analyzing data are often less effective. Customer insights are your secret weapon for crafting tailored offers that genuinely convert.
Smarter promotions for every stage of the journey
Your promotions shouldn’t just drive sales and create meaningful customer experiences. You can maximize results and meet your business goals by tailoring your discounts and promotions to align with customer type—whether they’re trying your brand for the first time or are loyal fans.
Start by understanding your audience, designing offers that meet their unique needs, and leveraging personalization to optimize the shopping experience on your eCommerce platform.
