The world’s most successful brands aren’t racing to the bottom with endless markdowns. Instead, they’re driving demand, loyalty, and premium pricing through innovation, exclusivity, and exceptional customer experiences.

At our agency, we’ve long championed the mantra: “Always give them more rather than charge them less.” For decades, we’ve advised clients that excessive discounting can erode brand perception and create erratic sales patterns, as consumers become conditioned to wait for the next sale.

While everyone appreciates a bargain, constant markdowns can become a crutch for brands. However, many forward-thinking companies are recognizing that a loyalty-based, value-driven approach is more sustainable than perpetual discounts. The key is to build robust brand equity so that customers feel compelled to return without the lure of price cuts.

Today, leading marketers are demonstrating that this strategy is not only feasible but essential for the future of brands.

What’s Driving the Death of Discounts?

Brands that rely heavily on discounts often find themselves in a vicious cycle—once consumers anticipate sales, they hesitate to purchase at full price. For example, Bed Bath & Beyond’s ubiquitous 20%-off coupons trained customers to expect markdowns, leading to a decline in full-price sales. When the company attempted to reduce these promotions, shoppers simply took their business elsewhere.

In contrast, Apple has cultivated a reputation for rarely offering discounts. Instead, the company maintains demand through trade-in programs, exclusive financing, and upgrade incentives. Consumers don’t wait for iPhone sales because they know they’re unlikely to happen. Apple employs a structured repricing strategy, typically lowering the price of older iPhone models by around $100 with each new release. This approach preserves their premium brand image while establishing a clear pricing hierarchy that drives demand for both new and previous-generation devices.

This shift in consumer behavior is evident in brands like Hermès, which has built an empire by refusing to discount. Instead of sales, they employ the “Scarcity Principle,” offering ultra-limited product availability—even customers with money in hand often have to wait for a Birkin bag. This strategy fuels desirability and protects their margins.
With rising costs squeezing margins, brands are finding that discounting is simply no longer viable.

Instead of discounting, Sephora has strengthened its Beauty Insider program, offering customers personalized rewards, early access to products, and exclusive events. This approach keeps shoppers engaged while maintaining price integrity. Today, 80% of Sephora’s revenue comes from Beauty Insider members.

Similarly, Tesla has never positioned itself as a discount brand. While it has adjusted pricing strategically (such as for EV tax credits), it avoids traditional “sales.” Instead, Tesla builds perceived value through cutting-edge technology and a strong brand identity.

Discounts can send an unspoken message: “Our product isn’t worth the listed price.” That’s why Patagonia focuses on sustainability and repairability instead of markdowns. They encourage customers to buy quality items, keep them longer, and even repair them—an approach that has fostered strong brand loyalty.

Similarly, American Express doesn’t compete on interest rates or promotions. Instead, it offers concierge services, airport lounges, and exclusive events. This strategy has made the Platinum Card a status symbol, rather than just another credit card.

What’s the Answer for Brands That Have Customers Who Expect Discounts?

STOP!

If customers have been trained to expect discounts, the brand needs to re-train them.
That means:

1. Phase out discounting gradually – Start by reducing the frequency and depth of discounts.
2. Shift to value-based incentives – Offer exclusive experiences, loyalty perks, and limited-time product drops instead of price cuts.
3. Introduce scarcity – Make certain products harder to get rather than cheaper.
4. Rebrand the price shift – Frame the end of discounts as an elevation of quality and exclusivity, not just a cost-saving measure.
5. Accept short-term pain for long-term gain – Some customers will leave. That’s fine. The goal is to attract and retain those who value the brand for what it offers, not just its price.

How Brands Are Winning Without Discounts

In today’s competitive marketplace, the allure of discounting as a quick sales booster is undeniable. However, many leading brands have recognized that incessant price cuts can erode brand perception and condition consumers to expect perpetual deals, ultimately undermining profitability. Instead, these companies are adopting value-driven strategies that emphasize quality, exclusivity, and customer loyalty. Below, we explore ten key strategies supported by real-world examples and pertinent statistics.

1. Emphasizing Product Quality
   Brands that focus on superior product quality can justify premium pricing without resorting to discounts. For instance, Patagonia emphasizes sustainability and durability in its products, attracting consumers willing to pay full price for long-lasting gear. This

commitment has led to a loyal customer base that values the brand’s environmental ethos.

2. Limited Edition Releases
   Creating scarcity through limited edition products can drive demand without the need for discounts. Nike employs this strategy with its SNKRS app, where exclusive sneaker releases generate significant buzz and sell out rapidly. This approach not only maintains pricing integrity but also enhances brand prestige.
3. Transparent Pricing Models
   Some brands adopt transparent pricing to build trust and justify their price points. Everlane, for example, provides consumers with a breakdown of production costs, allowing customers to understand the value behind the price. This openness has resonated with consumers seeking ethical consumption.
4. Enhancing Customer Experience
   Investing in exceptional customer service and in-store experiences can reduce the reliance on discounts. Apple’s retail stores offer personalized services like the Genius Bar, creating a premium shopping environment that justifies its consistent pricing strategy. A 2024 report indicates that 68% of consumers are willing to pay more for products and services from a brand known to offer good customer service experiences.
5. Building Strong Brand Communities
   Fostering a sense of community can encourage full-price purchases. Lululemon hosts yoga classes and events, building a loyal customer base that values the brand beyond its products. This community-centric approach has contributed to its strong market position, with a reported 19% increase in net revenue in 2023.
6. Implementing Loyalty Programs
   Rewarding repeat customers can drive sales without broad discounting. Sephora’s Beauty Insider program offers members exclusive access to products and events, fostering a sense of belonging and appreciation. This strategy has been instrumental in retaining customers and encouraging repeat purchases.
7. Strategic Use of Discounts
   When discounts are employed, applying them strategically can prevent brand devaluation. For instance, Coach has shifted from frequent markdowns to focusing on reinventing existing products, resulting in increased average handbag prices. This approach has helped maintain brand prestige while still offering value to consumers.
8. Exclusive Membership Models
   Offering exclusive access through memberships can justify premium pricing. Costco operates on a membership-based model, providing members with access to a curated selection of products at competitive prices, fostering a sense of exclusivity and value. Members pay an annual fee, with options including the Executive Membership, which offers additional benefits such as a 2% reward on qualified purchases.
9. Personalized Marketing
   Tailoring marketing efforts to individual consumers can enhance perceived value. Netflix utilizes personalized content recommendations to increase user engagement, justifying its subscription pricing without the need for discounts. By analyzing viewing habits, Netflix suggests content that aligns with individual preferences, thereby enhancing the user experience and reducing churn.
10. Commitment to Social Responsibility
    Brands that align with social causes can command premium pricing. TOMS’s one-for-one model, where a pair of shoes is donated for each pair purchased, appeals to consumers’ altruism, allowing the brand to maintain pricing without frequent discounts. This socially responsible approach has resonated with consumers, fostering brand loyalty and justifying premium pricing. Consumers are increasingly shifting from being price-conscious to value-conscious. A 2024 PwC survey found that consumers are willing to spend an average of 9.7% more on sustainably produced or sourced goods, even as cost-of-living and inflationary concerns weigh.

While discounting can provide short-term sales boosts, it often undermines long-term brand health. By prioritizing quality, exclusivity, and genuine customer engagement, brands can transcend the discount paradigm, ensuring sustained success in an increasingly value-conscious marketplace.

Moving Beyond Discounts

Discounting is a race to the bottom. While it may drive short-term sales, it conditions customers to expect lower prices, ultimately eroding profitability and brand equity. The most successful brands in the world don’t train their customers to wait for discounts—they train them to desire their products enough to pay full price.

Instead of focusing on price reductions, brands should be asking:
• How can we make our product or service so desirable that price isn’t a factor?
• What value can we offer that competitors can’t replicate?
• How can we build a long-term relationship with our customers that isn’t centered on price?

The brands that answer these questions successfully will thrive in the years ahead.

If discounting is the easy way out, building a brand that commands full price is the real challenge—and the real victory.

So the next time you consider slashing prices to move inventory, ask yourself:
Are we building a brand or just moving product? Because the brands that last are the ones that sell more than a product—they sell desirability, experience, and loyalty.