- 15% off wins on margin - recovers ~75% of 20%-off redemptions at two-thirds the cost.
- 20% off only for high-LTV cohorts (customers above your median $80 AOV).
- Free shipping beats a percentage discount when your AOV is under $60 - perception exceeds cost.
- Bundles cannibalize less - ideal for services, subscriptions, SaaS.
- Specificity beats discount size: "Your exclusive 15% member rate" beats "Flat 20% off".
The Four Offer Archetypes
US SMB win-back campaigns nearly always use one of four offers: a percentage discount, free shipping, a bundle, or a loyalty points bonus. Each recovers a different slice of dormant customers and costs you something different on the back end.
The Math on 1,000 Dormant Customers
Cohort: 1,000 dormant US SMB contacts. Average order value: $80. Gross margin: 40%.
- 15% off: ~9% redemption (90 customers), net contribution ~$1,530
- 20% off: ~12% redemption (115 customers), net contribution ~$1,472
20% off recovered 25 more customers and delivered less gross margin. That is cannibalization in one paragraph - the deeper discount came straight out of your bottom line.
Free Shipping for Low AOV
Free shipping is the only offer where perceived value exceeds actual cost. A $6 shipping charge on a $40 order feels like a 15% discount - but costs you $4 after carrier rates. Best ratio in the deck. Works when AOV is under $60. Above $100, free shipping is an afterthought - switch to percentage off or a bundle.
Critical: make it unconditional. "Free shipping on orders $75+" converts like a regular discount. "Free shipping, any order, this week" converts like magic.
Why Bundles Cannibalize Less
Discounts tell your customer your regular price was wrong. Bundles tell your customer you are offering more value. Same dollars, completely different framing effect on lifetime price anchoring. For services, subscriptions, and SaaS, bundles almost always beat straight discounts for win-back.
The Specificity Rule
"Flat 20% off. Code COMEBACK20" vs "Reserved for you - your exclusive 15% member rate. Valid 7 days." Identical cohort, smaller discount, and the second wins by 15-25% response rate. Reciprocity + scarcity + identity + urgency stacked in one sentence.
Your Decision Framework
- Margin under 35%: bundle or free shipping. 35-55%: 15% off default. 55%+: 20% only for top-tier.
- AOV under $60: free shipping.
- Service or subscription: bundle. Product: discount or free shipping.
Related reading: measuring re-engagement ROI, reactivation journey template.