How Startups Offer Discounts to Attract Customers and Grow Business

Startups often use discounts as a key strategy to attract customers, build brand awareness, and compete with larger companies. Whether it’s through promo codes, referral programs, or seasonal sales, offering discounts can boost customer acquisition and retention. In this article, we’ll explore how startups provide discounts, the most common discount strategies, and how customers can take advantage of them.

Why Startups Offer Discounts?

Startups, especially in their early stages, use discounts to:-

• • Attract New Customers

Discounts make it easier for customers to try a new product or service.

• • Increase Customer Retention

Loyalty programs and exclusive deals keep customers coming back.

• • Compete with Established Brands

Lower pricing helps startups stand out in competitive markets.

• • Encourage Word-of-Mouth Marketing

Referral discounts motivate customers to spread the word.

• • Boost Sales and Revenue

Temporary price drops often lead to higher volume sales.

Popular Discount Strategies Used by Startups

• • First-Time User Discounts

Many startups offer exclusive discounts for new customers to encourage first-time purchases.

Example:- A new food delivery app might offer ₹100 off on the first order.

Best for:- E-commerce, subscription services, food delivery, and SaaS companies.

• • Referral Discounts

Startups often create referral programs where existing customers get discounts for inviting new users.

Example:- “Give ₹200, Get ₹200” model used by fintech apps like Paytm and PhonePe.

Best for:- Mobile apps, fintech startups, and subscription-based services.

• • Limited-Time Offers

Flash sales and time-sensitive deals create urgency and drive quick purchases.

Example:- “50% off for the next 24 hours” campaigns.

Best for:- E-commerce, fashion, and travel startups.

• • Subscription & Membership Discounts

Some startups offer discounted rates for long-term subscriptions to retain customers.

Example: Spotify and Netflix offering lower prices for annual plans.

Best for:- SaaS, media streaming, and educational platforms.

• • Social Media & Influencer Discounts

Startups collaborate with influencers to provide exclusive discount codes.

Example:- 10% off when using an influencer’s promo code on a fashion brand.

Best for:- Fashion, beauty, fitness, and tech startups.

• • Student & Special Group Discounts

Offering discounts to students, military personnel, or first responders builds brand loyalty.

Example:- Apple and Microsoft providing student discounts on laptops and software.

Best for:- Tech, education, and lifestyle startups.

• • Buy One, Get One (BOGO) Deals

A common retail strategy that encourages bulk purchases.

Example:- A startup selling organic snacks might offer “Buy 1, Get 1 Free”.

Best for:- Retail, fashion, and food startups.

• • Cashback & Rewards Programs

Many startups offer cashback instead of direct discounts to encourage repeat purchases.

Example:- Credit card startups offering 5% cashback on transactions.

Best for:- Fintech, digital wallets, and e-commerce startups.

Startups Known for Their Discount Strategies

• Uber & Ola – First-ride discounts, referral bonuses.
• Swiggy & Zomato – Daily deals, bank offers, free delivery discounts.
• Meesho – Reseller bonuses, new user discounts.
• Amazon Startups (Launchpad) – Exclusive product discounts.
• CRED – Cashback rewards for paying bills.

How Customers Can Find the Best Startup Discounts

• Sign Up for Newsletters –

  Most startups send exclusive discounts to subscribers.

• Follow on Social Media –

  Brands often share promo codes on Instagram, Twitter, and Facebook.

• Use Coupon Websites –

  Sites like RetailMeNot and GrabOn list active discount codes.

• Join Referral Programs –

  Get extra discounts by inviting friends.

• Wait for Seasonal Sales –

  Many startups offer discounts during festive seasons like Black Friday and Diwali.