🍯 Discounting is Killing Your Retention

Hello DTC Savage,

There’s one practice that quietly kills retention for 8 and 9-figure brands - and it’s one of the most common traps in ecommerce.

It’s called discounting.

On the surface, discounting feels like a smart move. You’re driving short-term sales, clearing inventory, and giving customers an excuse to come back. But what you’re actually doing is training your customers to only buy when there’s a handout.

No discount? No purchase.

No urgency? No interest.

You’ve built a customer base that treats your brand like a coupon clipping hobby - not something they actually value. And once you go down that road, it’s almost impossible to climb back out.

Discounting = Long-Term Retention Killer

This isn’t a theory - it’s backed by data.

• Customers who buy during sales are 38% less likely to purchase at full price in the future

• Brands that rely on frequent discounting see their average order value (AOV) drop by 12–18% over time

• Excessive discounting reduces brand perception - 62% of customers associate constant sales with lower product quality

Short-term revenue spikes feel good, but they come at the cost of:

• Slashed margins - every discount eats directly into your profit

• Brand devaluation - customers stop seeing your product as worth full price

• Retention decay - once you condition buyers to wait for discounts, they disappear in between sales

The Discounting Death Spiral

Here’s how it plays out for brands who fall into this trap:

• You need revenue, so you run a sale

• Customers flood in for the discount, but ignore your full-priced products

• To hit next month’s revenue goal, you need to run another sale

• Over time, your brand is known for sales - and customers only show up when there’s a deal

Before you know it, your customers control your pricing strategy, not you.

What High Retention Brands Do Instead

The brands that crush retention at scale don’t condition their audience to expect discounts - they build perceived value and brand loyalty through:

• Product Education: 70% of high-LTV customers say they’re more loyal to brands that teach them how to get the most value from their purchases.

• Personalization: Brands using personalized product recommendations based on past purchases see 26% higher repeat purchase rates.

• Loyalty Programs: Customers in loyalty programs spend 22% more per order and are 50% more likely to make repeat purchases within six months.

• Exclusive Perks: Offering VIP early access or exclusive product drops increases customer retention by 28%, all without slashing prices.

Discounting Should Be a Tool, Not a Crutch

Discounting isn’t evil - but it should be used strategically, not as a survival tactic.

Here’s what healthy discounting looks like:

• Intro Offers for First Purchasers: Incentivize the first order, then shift the focus to product value and customer experience.

• Targeted Win-Backs: Use discounts to revive truly at-risk customers, not just anyone who hasn’t purchased in 30 days.

• Exclusive Sales for VIPs: Reward your top 10% of customers, rather than training your whole list to expect discounts.

The Takeaway

If you’re serious about building a brand with real retention and long-term value, you have to stop treating discounts like your default growth strategy.

• Build your retention on customer experience, not handouts.

• Focus on value, not price slashing.

• Train your customers to love your products - not your promotions.

P.S. If your brand’s stuck in the discounting death spiral and you need a way out, let’s talk. There’s a better way to drive retention.

Also, I would love to connect with you on LinkedIn.

Talk soon,
Feras