Branding Strategies for Success (Collection)

Truth 9. Beware of the discounting minefield

On sale. Clearance sale. Holiday sale. 25% off. 50% off. It never ends. Roy Williams in Wizard of Ads describes constant promotion as the cocaine of advertising. That's a good analogy since discounts make us feel good in the short run (as marketing teams see sales gains) but risk killing the brand in the long run (by cheapening the brand's image and shrinking profit margins). As consumers become acclimated to this activity, it takes larger "doses" to keep generating interest and sales gains.

The problem with discounting is that you might never go low enough. There may always be a competitor willing to be cheaper than you. And that simple point is the crux of the discounting dilemma. Although an organization ...