Close this search box.

Discount Marketing: The Must-Read Guide to Get It Right in 2024 (Pros & Cons)

By Liza Shuttleworth Last updated: 10 minute read E-commerce & RetailMarketing Guides

Discount marketing is severely underrated but, done right, it can skyrocket your business!

As a strategy, it has pros and cons that you need to consider before you start marking things down willy-nilly.

And there are some best practices for discounting your products to maximize sales and overall revenue. 

With this guide, you’ll learn and understand the golden basics of discount marketing, the pros, the cons, and the guidelines you should keep in mind to make it work best for you!

Shall we?

Let’s dive right in!

Skip to What You Need

    read more

    What is Discount Marketing?

    Discount marketing is a conventional strategy that companies use to stimulate sales, to compete with other brands, and to create a bit of buzz around their products and services to develop momentum.

    To put it in simple terms, lowering the price of different products and deals can immediately help you capture the attention of your prospects.

    If you’re doing it right, you’ll improve the volume of sales, and I’m sure that’s one of the reasons why you’re here right now.

    The best performance marketing agencies in the world perceive discount marketing as the “secret weapon” that smart businesses can leverage to generate better results. Noticed the word “smart”?

    Why is it considered so?

    A RetailMeNot survey showed that more than 80% of customers feel encouraged to make a first-time purchase after being offered discounts and coupons.

    On the other hand, as you’ll see later in this post, discount marketing is not a surefire way to improve your business performance. It can backfire, and it can hurt you badly.

    When Should You Use Discounting Strategies?

    To discount or not to discount? That is the real question.

    While price strategies work wonders when used properly, there’s a really fine and thin line between performing a profitable discount strategy and hurting your brand’s reputation with general and unnecessary discounts.

    Every business is unique; therefore, it requires a unique discount marketing approach.

    Before everything else – you need to ensure that you have a very precise objective that is linked to a discount strategy that you want to use.

    Generally, businesses create discounts when they’re launching a new line of products, when the competitors are getting ahead, but also during “dead” times when people are spending their money in other places. A few more reasons could be:

    • To attract your customers with discounted seasonal sales
    • To promote and showcase your product at a specific event
    • To advertise your products and services via influencer marketing strategies
    • To encourage emotional purchases
    • To encourage large orders
    • To create a buzz around different products
    • To generate email leads
    • To reward loyal customers

    Of course, big retailers are always using offering discounts and coupons. It’s part of their overall strategy.

    However, as a smaller business, you need to plan everything thoroughly and test every single result that you can to minimize the risk of damaging your brand’s image.

    To be quite honest…

    You’re the only one who can decide if coupons and discounts can help your business right now.

    As you follow the next guidelines, you’ll be able to decide if starting a discounting strategy is the right move now or in the nearest future.

    Image text says: "purchase motivators" followed by :78% gave me the opportunity to try it first" and "50% showed that the company believed enough in its product or service to let me check it out" and "49% I was given a discount coupon or special offer that made me more likely to buy"
    Credit: SlideShare

    How NOT to Use Coupons

    Before you create the first coupon and the first discount marketing strategy, let’s explore the biggest mistakes that businesses make when executing discount marketing campaigns.

    1. Poor Design (for brick-and-mortar stores)

    The aesthetic appeal of your coupons is the first impression that your brand leaves.

    Therefore, whenever you’re thinking about choosing the cheapest graphic design service, consider it twice and make a wiser decision. Every penny that you invest in those small pieces of paper is going to matter, so make sure you perceive it as an investment rather than a cost.

    2. Complicated and Confusing Proposals

    Simple, short, and concise. Remember it: simple, short, concise. If you break this rule, your coupons will generate way fewer results than you’ll expect.

    Whenever you have to include additional details to make the offer understandable, use the bottom space to do it.

    Nevertheless, avoid confusing your prospects and customers. That’s what they hate the most.

    One good idea would be to study the most successful coupons in your market and find a good twist to align them with your target audience’s needs.

    3. Deals that Nobody Needs

    A blog that publishes blog posts because “those are the SEO rules” is doomed to fail.

    Why? Because the strategy and the writers who perform the strategy aren’t concerned about the value they bring to their customers.

    It works the same in discount marketing. To make it worthwhile, you need to ensure that your coupons are truly worth your customer’s attention.

    This way you’re not wasting your time, money, attention, and energy on developing and managing a discount marketing campaign that simply brings no results.


    Image of a Fax Machine with the words "50% Off on all fax machines!" above it

    4. General Targeting (lack of personalization)

    Personalization is the key.

    First of all, you need to align your coupons and discounts with your brand’s reputation and image.

    Use the same colours that you use in your logo, use words that resonate with your audience, and make sure you add as many layers of personalization as you can to show them that the coupons were created especially for them.

    5. Using the Same Coupons for Different Marketing Channels

    If you want to use both digital coupons and physical coupons, you’ll have to mark a few differences.

    To be effective, you should personalize your coupons according to the marketing channel that you’re using.

    For example, coupons that are distributed on the street should be very different from the coupons that you send to your seasoned buyers through email marketing.

    Credit: Paul Mascetta

    Discount Marketing Checklist

    There are a few rules of thumb that you should always keep in mind while performing discount marketing strategies:

    Always Go Targeted

    Geo-targeting, interests targeting, behaviour targeting – you should cover everything. Target one objective, one audience, one deal, and one unique value proposition.

    Keep it simple and you’ll see that “less is more” is not just a theory.

    Pay Close Attention to Margins

    If you’re offering discounts, you need to ensure that you know exactly how much profit you’ll be getting after each sale and whether the entire discounting strategy will bring you closer to your goals.

    To keep your profits high, cut the marketing expenses as much as you can, segment the offers, and offer upsells.

    Always Know Your Customer Acquisition Cost

    The average customer acquisition costs change over time. Nevertheless, whenever you decide to run a discount campaign, make sure that the coupons that you use aren’t exceeding the customer acquisition expenses by a lot. 

    Ideally, you should focus on converting your one-time customers to repeating customers (higher lifetime value and lesser cost).

    Use Different Types of Coupons for Different Purposes

    Always be flexible and never be lazy. Don’t use a coupon that you’ve used last year only because you don’t have to design it again.

    Whenever you have a new objective in your mind, ensure that the coupon truly reflects the objective of the campaign and the target audience that you’re going for.

    Graph text: "How likely are you to buy products you left in your cart, if they are offered again at a discounted price?". Graph shows that ages 18 to 24 are 61% 'very likely' and 25 to 34 year olds are 72% very likely. Ages 35 and up to 65+ are all around 40 to 50% on the same scale.
    Credit: Content Ninja

    Make Sure Your Offer is Limited

    Coupons and discounts work very well when they’re making people feel that they’re missing out on something.

    This is one of the biggest perks of discount marketing, and you should fully leverage it.

    When your coupon is exclusive and your offer is limited, the prospect will be very tempted to take advantage of the opportunity before other people do, thus he will often purchase based on an emotional trigger.

    Create Content Around Your Deals

    If you create a new deal, make sure that you develop a content marketing campaign around it.

    For example, if you’re selling red dresses at a discount, create a few articles or videos that will expose these red dresses to your audience. Tempt them first, show them the bait, and then simply wait.

    Obviously, you need to promote your content using the same key principles – targeted and personalized.

    Test, Measure and Optimize, All the Time

    Test, test, test, then test again. You should always control the performance of your discount marketing campaigns.

    Each coupon that’s being used produces significant effects in your overall business strategy.

    That is why you should use various analytics tools to figure out how to dramatically improve your conversions over time.

    Use What Has Worked Before Until It Stops Working

    Don’t reinvent the wheel. If you’ve figured out a coupon strategy that works, use it again and again until it stops working.

    Diversify if you want, but never waste a working strategy by replacing it with a fresh idea that haven’t been proven.

    Five Disadvantages of Coupons

    As I’ve mentioned, coupons can bring significant disadvantages to your business in case of misuse. To prevent the CONs of discount marketing, take the previous checklist into close consideration and follow every principle there.

    Here are the five most common disadvantages of coupons:

    1. Coupons are costly. Think about it – every coupon that you use is money that doesn’t go in your pocket. Even more, you have to invest in the entire campaign, which presumes designing, printing, and marketing costs.
    2. Coupons can cannibalize your profits. Interesting metaphor, right? Your products may be bought even without the coupons, by the same customers. Therefore, you may be losing money. To avoid this trouble, limit the promotions to one-time customers or exclusive buyers.
    3. Price discounts may damage your brand’s perceived value. Most customers associate low-cost products with a lack of quality. That is why there’s a thin line between profits and losses. Make sure that you’re preserving your brand’s reputation and be careful with any significant price drop.
    4. You may get your audience too used to deals. Some customers will stop buying products until you post a new discount, coupon, or opportunity that they can leverage. You never want that to happen!
    5. You may attract the wrong target audience. People that are looking for “good deals” are all over the place and right around the corner. It can set a bad precedent for the future because these customers aren’t really appreciating your business and they’re just looking to profit on their own.

    Final Thoughts on the Pros & Cons of Discount Marketing.

    Discount marketing is a fine art that we can all learn from. Every successful business is already doing it and that’s a good enough justification to state that it works.

    How will it work in your case? That’s totally up to you. Learn, study, research, and make sure you’ve got the necessary key information before you start.

    It may bring you revenues, or it may cut revenues. As long as you’re willing to test, measure, and optimize every campaign that you perform, you’ll eventually get the hang of it and start profiting consistently!

    About the author: Leon Collier is a passionate blogger, digital marketer, and manager at He’s currently focused on improving the performance of small local businesses who are eager to invest in non-conventional marketing strategies.  Aside from work he likes reading and playing tabletop games. Follow him on twitter @LeonCollier12

    Frequently Asked Questions

    What is Discount Marketing?

    Discount marketing is a conventional strategy that involves lowering the price of different products and deals to capture the attention of your prospects. Read the full guide for more details.

    Do discounts attract customers?

    Good discounts attract customers if you're providing them with deals they need. They can be a great way of getting to price-sensitive customers. More details on this in the full guide.

    Is Discount Marketing profitable?

    Yes, it is! To keep your profits high, cut the marketing expenses as much as you can, segment the offers, and offer upsells. Check out the complete guide for more details.


    Voucherify: How to Make Discount Marketing Work for You

    Digital Doughnut: Tips to Promote Your Business with Discounts

    Gaebler: Business Coupon Mistakes to Avoid