Discounts are one of the oldest and most powerful tools in a marketer’s toolkit.
Whether it’s a percentage off, a buy-one-get-one deal, or a limited-time flash sale, promotions can attract attention, boost sales, and bring new customers through the door.
But like any strategy, they’re not without drawbacks, and using them too often or without a plan can hurt your business more than help it.
If you’re wondering whether discounting is right for your digital marketing strategy, you’re not alone.
In the following, we’ll break down the advantages of discounts and their potential disadvantages, as well as the key considerations you should keep in mind before hitting “send” on that next promotion.
The advantages of discounts in digital marketing
Discounts are popular for a reason: They work. They tap into fundamental human psychology, which is the desire to save money and get a “good deal,” and they can accelerate customer action faster than many other marketing tactics. The following is how they can benefit your business.
Boost short-term sales quickly
One of the biggest advantages of discounts is their ability to generate sales quickly.
When you offer a limited-time promotion, you create a sense of urgency that drives immediate action.
This is particularly valuable when you’re trying to:
- Clear out old inventory.
- Hit end-of-quarter revenue goals.
- Launch a new product with momentum.
- Drive seasonal sales (such as holiday campaigns).
Discounts act as a catalyst, converting on-the-fence shoppers into paying customers.
Attract new customers
Promotions are a proven way to lower the barrier to entry for first-time buyers.
Many customers are hesitant to try a new brand at full price, but a discount makes that decision easier.
Once they’ve purchased and experienced your product or service, you have an opportunity to nurture them into loyal, repeat customers through follow-up campaigns, personalized offers, and excellent service.
Encourage larger purchases
Strategic discounting can increase your average order value (AOV). For example:
- “Spend $50 and get 20% off”
- “Buy 2, get 1 free”
- “Free shipping on orders over $75”
These incentives motivate customers to spend more than they originally intended, helping you improve revenue without needing to increase traffic.
Strengthen customer loyalty
Occasional discounts can be a great way to reward existing customers. Loyalty discounts, birthday coupons, or exclusive early access to sales show your customers that you value them, which can increase retention and lifetime value (LTV).
When discounts feel like a “thank you” rather than a constant expectation, they can strengthen relationships and keep your brand top of mind.
Stand out in a competitive market
In saturated industries, even small discounts can help you stand out from competitors.
If two brands offer similar products or services, a well-timed promotion might be the deciding factor that tips a potential buyer in your favor.
This is especially effective when combined with strong messaging and a clear value proposition.
Disadvantages of discounts (and why they can backfire)
While discounts have clear benefits, they also come with significant risks, especially if used too often or without a clear strategy. The following are the most common drawbacks to watch for.
Eroding perceived value
One of the biggest risks of discounting is that it can devalue your product or service in the eyes of your customers.
If your audience is constantly seeing markdowns, they may start to question the true worth of what you’re selling — or assume that the full price is inflated.
This is especially dangerous for premium or luxury brands, where perception is a key part of the appeal.
Training customers to wait for sales
Frequent discounts can create a cycle where customers learn not to buy unless there’s a promotion. Over time, this can erode profit margins and make it difficult to sell anything at full price. If shoppers believe a better deal is always just around the corner, they’ll hold off on purchasing — sometimes indefinitely.
Reduced profit margins
This one’s straightforward: Discounts cut into your profits.
While that might be acceptable for a short-term campaign, consistent discounting can make it difficult to sustain profitability — especially for small businesses or those with thin margins.
Worse, if competitors start matching or beating your offers, you could end up in a “race to the bottom” where no one wins.
Attracting price-sensitive shoppers
While discounts can attract new customers, they don’t always attract the right customers. Shoppers who buy only because of a promotion may not become repeat customers, especially if they’re primarily motivated by price.
This can lead to higher churn rates and lower long-term value compared to customers who buy because they genuinely believe in your product or brand.
Potential brand damage
If discounts are inconsistent, poorly communicated, or too steep, they can harm your brand reputation.
Customers might wonder why prices fluctuate so much or suspect that products are of low quality. This is particularly risky in industries where trust and credibility are crucial.
Key considerations before offering discounts
Discounting can be a powerful tool — but only when it’s part of a larger strategy. Before launching your next promotion, keep these considerations in mind:
Define your goal clearly
Are you trying to attract new customers, reward loyal ones, or clear inventory?
Each objective might require a different type of discount or promotional approach.
Being clear about your “why” will help you design more effective campaigns.
Segment your audience
Not all discounts should be offered to everyone.
Use segmentation to target the right people with the right promotions (for example, first-time buyers, VIP customers, or lapsed subscribers).
This helps you maximize impact without unnecessarily lowering prices across the board.
Set guardrails
Determine in advance how often you’ll run promotions and what your minimum profit margin will be.
Guardrails help prevent discounting from becoming a habit and keep your strategy aligned with your long-term business goals.
Track and measure results
Use your digital marketing platform (like DailyStory) to track campaign performance, including sales, new customer acquisition, average order value, and customer lifetime value.
Reviewing this data helps you understand which types of discounts are most effective — and whether they’re delivering sustainable ROI.
How DailyStory can maximize the impact of every discount campaign
Discounts work best when they’re targeted, personalized, and automated — and that’s where DailyStory can help.
Our marketing automation platform makes it easy to:
- Segment your audience so discounts reach the right people
- Automate limited-time promotions through email, SMS, and push notifications
- Track campaign performance in real time to understand what’s working
- Nurture new customers after their first purchase and turn them into loyal fans
Whether you’re launching a one-time flash sale or building a full retention strategy, DailyStory gives you the tools to do it smarter — and see stronger results.
Conclusion
The advantages of discounts are undeniable: They can drive quick sales, attract new customers, and build loyalty when used wisely. But they’re not a silver bullet. Overuse can weaken your brand, train customers to expect deals, and cut into profits.
The key is balance. Treat discounts as one part of a comprehensive digital marketing strategy — not the entire plan. Combine them with other tactics, such as email personalization, loyalty programs, content marketing, and automation, to create lasting growth without relying solely on markdowns.
With the right approach, discounts can be a powerful accelerator for your marketing campaigns without diminishing the long-term value of your brand.
