Discounting Is Easy. Creating Value Is Harder

Whenever sales slow down, there is an incredibly tempting marketing lever available: reduce the price. It is easy to understand why. Discounts are straightforward to communicate, customers immediately understand the benefit and, in many situations, they can create a short-term uplift in sales. The problem comes when discounting becomes the default response every time an organisation wants to stimulate demand.

Repeated discounting can slowly change the relationship customers have with a product. If people become accustomed to seeing regular 10%, 20% or 30% offers, the promotional price can start to feel like the real price and the standard price begins to look expensive. Instead of encouraging somebody to buy, marketing can accidentally train them to wait. That might deliver a good week of sales while making the next full-price week considerably more difficult.

I increasingly prefer asking a different question before reaching for the discount button: how can we make the proposition more valuable? Sometimes that means adding something rather than taking money away. It might involve combining products, adding convenience, improving the experience, creating exclusivity or developing a partnership that gives the customer more for the same price.

Matchday Teammates at Aberystwyth Town was a small example of that thinking. Instead of simply reducing the price of a football ticket, the idea was to connect the ticket with offers from businesses around Aberystwyth. The supporter potentially received additional value from their matchday, participating businesses gained exposure and footfall, and the football club strengthened its relationship with the wider town. The proposition became more attractive without the club simply sacrificing ticket revenue.

Bundling can achieve something similar. A customer may be willing to pay more overall when several things they need are packaged together conveniently. We used this thinking around football travel and ticket packages, where the benefit was not necessarily that every individual component was cheaper, but that the supporter could solve several problems through one purchase.

Brand strength also plays an important part in protecting price. When customers perceive brands as interchangeable, price becomes one of the easiest ways to compare them. When a brand has stronger associations, greater trust or a distinctive experience, the decision becomes more complex than simply choosing the cheapest available option.

None of this means discounts are inherently bad marketing. Promotions can be extremely useful for stimulating trial, creating urgency, clearing stock or supporting particular trading periods. What I question is using them without considering what behaviour they might create over the longer term.

If the only answer a business has to the question “Why should I choose you?” is “because we are cheaper this week”, there is always a risk that somebody else will be cheaper next week. Creating genuine value is harder than taking 20% off the price, but it can also build a much stronger business.