Cookie Settings Our site uses cookies in order for the site to function properly and for your user experience to be even better. You can read more about them use and control their settings.
Services Marketing & strategy Creative & content Tech & experience Segments B2B E-commerce & DTC B2C Lead Generation B2C Branding Cases About Podcast Insights & events Events Webinars E-books Blog Growth academy Careers Contact
sv fi en
sv fi en

Many companies use discounts to increase sales. But this practice has significant downsides.

First, discounting often attracts less loyal customers. Here’s an analysis we did on an e-commerce store.

Customers who didn’t buy at a discount had a 14% higher LTV. We only looked at revenue, and the gap becomes even bigger when you consider the differences in gross margin.

Second, discounting can become addictive, because it provides measurable short-term results. In this analysis, the percentage of products sold at a discount increased by almost 40% over two years.

Discounting often means you pay more (because of the reduced price) for customers who spend less. And it’s hard to stop.

There’s a place for promotions and sales. But it shouldn’t be your only lever for growth. To break free from a vicious cycle of never-ending promotions, you must invest in your product, brand, and marketing.

As many brands start prioritizing profitability in 2023, we recommend keeping a close eye on discounts.

Read More