If you are offering discounts to retain your customers, think again.
What are you really looking for when you browse Shein?
You’re probably chasing the lowest price. A trendy outfit for under €10, a quick fashion fix without thinking too much. Fast, cheap, and disposable.
And what about when you shop at Lululemon?
You’re not just buying leggings; you’re buying into a lifestyle. Movement, mindfulness, self-improvement. You’re there for how it feels to wear the brand, not just the price tag.
Two very different buying moments. Two very different expectations.
Which brings us to the question:
Is discounting the best marketing tool to retain customers?
The answer? Yes. And also - no.
If your brand is built around the concept of low cost, then yes, discounts can absolutely be a powerful retention tool. Think of brands like Temu, Ryanair, or Zalando: for them, price is part of the promise. Discounts reinforce their positioning.
But if your brand stands for something else, like quality, experience, sustainability, or community, then relying heavily on discounts can backfire. It might dilute your message, erode perceived value, and attract the wrong kind of loyalty.
So let’s break this down.
To really understand how discounts fit (or don’t) into your retention strategy, we’ll look at three key areas:
- The Dark Side of Discounts – Why relying too heavily on price cuts can hurt your brand
- What Your Customers Are Really Buying – The emotional drivers behind loyalty
- How to Build Retention Through Real Value – Strategies that go beyond percentages and connect on a deeper level
1. The Dark Side of Discounts
Using frequent and aggressive discounts (especially 40% or more) might seem like a fast way to win loyalty. But in many cases, it creates long-term damage, especially if you’re a new player in a crowded space. Here’s why:
- It signals low quality. If your company is is new or relatively unknown - especially in a crowded market - and that your discount is extreme, people may assume the product isn’t worth its full price. And if the discount is too steep, it can look more like desperation than generosity.
Even breaking into a new market can backfire if it isn’t backed by a solid, sustainable strategy. A case in point is Greenweez, the French e-commerce retailer of organic and eco-friendly products: after several years of courting Italian consumers with aggressive, ongoing discounts, the company ultimately withdrew from Italy, weighed down by conspicuous losses. - It triggers the hoarding effect. Instead of buying when they need something, your customers start waiting for the next sale. You’re training them to delay purchases, and that’s a risky habit to create.
- It erodes trust. Too many discounts, too often, and people start wondering: Was the original price inflated? Are they getting real value or just marketing tricks?
Instead, try asking yourself this:
What are people really buying from you, beyond the product?
2. What Your Customers Are Really Buying
Are they buying a gym membership - or a fitter, more confident self?
Are they buying a ring - or the feeling of being radiant at a Christmas party?
Are they buying a natural cosmetic - or the promise of younger, glowing skin?
Once you identify the emotional outcome or "hidden product" behind what you're selling, you can build a retention strategy that speaks directly to it.
Real loyalty comes from real value.
3. How to Build Retention Through Real Value
Don't just offer less money for the same product - offer more care, more meaning, and more value for the loyalty they already give you.
Instead of two free months with a 12-month gym subscription, offer a one-on-one coaching session. Or a personalized training plan. Or anything that shows you understand and care about their journey.
Think about it: what's your customer's real goal? The gym member isn't just buying access to equipment - they want to feel stronger, more confident, healthier. So give them tools that actually help them get there.
A software company could offer personalized onboarding instead of discounted licenses. A restaurant might provide cooking classes with their chef rather than cheaper meals. A beauty brand could offer skin consultations instead of percentage-off promotions.
The key? Figure out what your customers are trying to achieve beyond your basic product.
This doesn't just give them something "extra." It gives them a reason to believe in your brand, and to keep coming back. When they feel understood - not just sold to - they stop shopping around for better deals. They become the kind of customers who refer friends and resist competitor offers.
Real loyalty comes from real value. And real value goes way deeper than your price tag.
Don't forget to...Let's Bold and… never be regular!
Chat soon.
Member discussion