Offering a discount to your first customers is a common tactic for new products, but it’s a decision with significant long-term consequences. While it can accelerate initial traction, it can also set a dangerous precedent that devalues your product. The right answer depends entirely on your goals, your product, and the kind of customer base you want to build.

This guide explores the trade-offs of early-customer discounts, helping you decide if it’s the right move for your business and how to approach it strategically.

An early-stage customer discount is a special pricing offer extended to the first group of users of a new product or service. This isn’t just about a simple coupon code.

These discounts can take several forms, including:

• A percentage or flat-rate reduction on the standard price for a limited time.
• “Lifetime” deals where early adopters pay a one-time fee or a permanently reduced subscription rate.
• Extended free trials that give users more time to evaluate the product before committing.
• Beta pricing for users who agree to use the product before its official launch and provide feedback.

The primary goal is always the same: to overcome the initial friction of attracting users to a new, unproven product.

Giving away potential revenue might seem counterintuitive, but a well-executed discount strategy can pay dividends. Founders typically use discounts to achieve a few key objectives.

The main benefits include:

• Acquiring the first critical users: Every product starts with zero customers. A discount can be the nudge someone needs to take a chance on a new solution.
• Generating essential feedback: Early users are your first source of real-world feedback. Their insights are invaluable for refining features, fixing bugs, and validating your product’s value proposition.
• Building social proof and case studies: Happy early customers can provide testimonials, reviews, and case studies that are crucial for marketing to future buyers.
• Creating urgency and momentum: Limited-time offers for the “first 100 users” can create a sense of scarcity, encouraging faster sign-ups and building initial buzz.

While the benefits are tempting, the downsides of discounting can have a lasting negative impact on your business if not managed carefully. Understanding these risks is key to making an informed decision.

Challenges you might face include:

• Devaluing your product: A low entry price can anchor customers’ perception of your product’s worth, making it difficult to justify higher prices later on.
• Attracting the wrong customers: Bargain-hunters are often the first to sign up for a deal but also the first to churn when the price increases. They may not represent your ideal customer profile and can provide misleading feedback.
• Setting a low price anchor: When it comes time to raise prices, new customers may compare the standard rate to the initial discount, perceiving it as “too expensive” rather than the true value.
• Creating an expectation of discounts: If you start with discounts, customers may always expect them, making it harder to sell at full price in the future.

If you decide that offering a discount is the right approach, doing it thoughtfully can help you maximize the benefits while minimizing the risks. A strategic discount is a tool for growth, not just a race to the bottom.

Here are a few best practices to follow:

While Kinde does not offer a traditional coupon or discount feature, it provides the tools to strategically manage pricing for your first customers through its flexible plan management system. Instead of applying a temporary discount, you can create a dedicated plan with a lower price point specifically for your early adopters.

This approach gives you more control and clarity. You can create an “Early Adopter” or “Beta Program” plan with a fixed lower price. Once your launch phase is over, you can simply make that plan unavailable for new subscribers, preserving its exclusivity for your first users. This method avoids the complexity of discount codes and clearly separates your introductory offer from your standard pricing.

With Kinde, you can define different pricing models—such as flat-rate or usage-based—for these special plans, ensuring that your discount strategy aligns perfectly with your business goals.

• Create plans
• Pricing models
• Add and manage plan groups