Beware the discount trap
How premium brands accidentally become discount brands
Hi there,
I’ll be honest, as a Dutchie, I love a good deal. I’ve definitely fallen for more than a few well‑placed discount pop‑ups or those irresistible “just one more day” emails.
But working with premium brands has taught me that not all discounts are created equal.
The wrong ones might score a quick sale, but they can also train customers to wait, erode margins, and dilute your brand positioning faster than you’d expect.
Discounts aren’t inherently bad, but when used incorrectly, they can land you in a discount trap.
The Discount Trap: What it looks like
In the endless chase for monthly revenue goals, you launch a campaign “just this once”… only to find yourself needing another, and then another.
Customers start Googling promo codes before checkout, and every sale feels driven by discounts rather than demand.
Your product starts to feel less premium, even if the price hasn’t changed.
The trap isn’t discounting itself; it’s not having a strategy for how, when, and why you use them.
How to Avoid It: The Discount Template I Use
Here’s the structure I recommend brands (especially premium ones) follow to avoid getting into a discount trap.
I don’t ban discounts, but I encourage brands to get strategic about them.
1. Know your why
Discounts should serve a purpose, not just boost short-term sales.
Ask:
Are we acquiring new customers?
Increasing subscription signups?
Clearing old stock?
Rewarding loyalty?
What not to do:
Ongoing blanket sales
Deep discounts on bestsellers
% off just because revenue is slowing
I usually only use discounts for subscriptions or to move stock nearing expiry. That way, you avoid devaluing your main offering.
2. Set a discount hierarchy
Golden rule: Subscriptions should always offer the best value.
For example, you could define it as follows:
One-off purchase: Max 10% off
Subscription: Always better (15% off)
Subscription intro: Free welcome gift
Also, consider the hierarchy between sources, e.g., influencers, affiliates, referrals, newsletters, etc. Which you prioritise should align with your growth strategy.
3. Use Scarcity & Exclusivity
Discounts should feel like a privilege, not an expectation. If customers expect them, urgency disappears.
Use terms like:
“Early access”
“Limited-time thank you”
“Exclusive for subscribers”
Avoid:
“Sale”
“Everything must go”
Perpetual popups
Define in your template:
Define the language you will and won’t use
Set expiry windows (e.g., 48 hours or 7 days)
Use unique codes wherever possible
Tip: Monitor deal forums, as a “secret” code spreads faster than you think.
4. Create a backlog of value beyond discounts
The best offers don’t always involve a price cut. Consider alternatives that add value instead:
Free gift with subscription
Early access to limited products
Exclusive or larger bundles (driving up AOV)
Free shipping (framed as a perk, not a right)
Loyalty Scheme benefits
Informational products
Create a backlog of alternatives to test against blanket one-off discounts. I often use newsletter opt-ins to trial these offers, but always track more than conversion rates and focus on what brings quality customers.
Recommendation
In every edition of Growth Waves, I also share a related resource to check out related to the week's topic.
Here are some additional articles to help you make the case within your startup for why it’s time to change your approach to discounts:
Great additional questions to evaluate your discount approach (and audit yourself on whether you are in the discount trap)
An interesting case study of why Starbucks scaled back discounts
Discounts aren’t the enemy, but they’re not the answer to everything either.
If you’re building something premium, the real value comes from consistency: how you show up, not just what you mark down.
And yes, this is coming from someone who once bought three hair serums when she needed one… just to get 20% off.
Until next time,
Daphne