The “Discount Habit”

Who has already paid for their perfumes or drinks on an Easyjet flight in full? Nobody really, right? 🤷‍♂️ Well, that’s part of what is called the “discount habit”.

Yes, discounts are powerful because they give the impression of a big “gain” to the consumer. But, what happens when discounts become the norm?

Poltrone&Sofà and EasyJet (for inflight drinks) are all well-known brands that (ab)use the discounting psychology, to the point that paying in full, you feel like an alien! And SaaS services are not exempt: P-Cloud, Duolingo, and the like seem to be on permanent sale!

While this may work for Easyjet (after all, if you need a Coke at 10’000 ft, you probably don’t have many options anyway, so the “gain perception” wins on the “habit”), does this work for your business?

Some of the effects of a continuous discount policy:

❌ Expectation of Continuous Deals: Consumers have become accustomed to expecting discounts. This constant flow of promotions can create a consumer mindset where paying full price feels like overpaying.

❌ Risk of Hard Feelings: Those who paid full price may have the impression of being “ripped off”. How would you justify your discounts to them?

❌ Postponing Purchases: Shoppers often wait for these deals before making a purchase, knowing that a discount is likely just around the corner. This means postponed revenue (at best).

❌ Perceived Value Erosion: The full price loses its significance when discounts are always available. This can lead to a perception that the regular price is inflated, and the product’s value is only at the discounted price.

❌ Brand Image: While frequent discounts can drive sales and attract budget-conscious shoppers, they can harm the brand’s image.

❌ Regulation: Without talking of the regulatory implications, when these discounts are fictive and only play the role of marketing tactics.

Are discounts always bad? No, but… whatever your choice about discounts is, it has to be a deliberate one, part of your strategy, agreed upon and understood by the different people involved (Sales, Product, Marketing…) and not just an “Incident”.

Some alternatives to permanent and blanket discounts:

✅Justifiable: explain why you are doing it (eg. stock clearance,…)

✅ Time-boxed: Discounts should be the exception, not the norm.

✅ Segmented: Thought about the segment they need to reach, not “global.”

✅ Discrete: Not affecting the willingness to pay of those who’d pay full, YET…

✅ Fair: Discounts should be fair to those eligible and to those who pay in full.

✅ Strategic: They should be part of a consistent strategy, not just accidental.

And you❓ Do you want to be the “permanent discounter”❓ Have you a defined Discount Strategy agreed upon between your Sales, Service, and Product teams❓ 

#pricingstrategy #discounts #permanentdiscounts