Discounting in DTC: Perceived Value vs. True ValueDTC Retention
Interesting conversation point: is it worth using a serious discount to pull in new customers?
Here, chew on this. We’ve got two (real) beauty brands with the same subscribe ‘n save model and two different opt-in incentives:
- Brand A: 33% discount on the first purchase
- Brand B: 10% discount on the first purchase
According to our data, brand B is retaining 2x as many customers as brand A.
Why? Perceived value vs. true value.
It’s like meeting a guy who shows up in a 3-piece suit and introduces himself as a “successful entrepreneur” only to find out he’s a dog walker. Pretty womp-womp, right?
But, what if he had introduced himself by explaining his passion for dogs, and how he used that to build a successful dog-walking service that gives back to local shelters?
Can you see how quickly your perception changed?
In the end, the “product” is the same, but your sense of its value is wildly different.
Whether you’re acquiring single purchase customers or subscription customers, stop thinking in terms of a flat sale and start thinking longer-term.
It’s like dating. Cheap tricks, exaggerations, and shiny distractions might get you a first date, but probably not a second.
The key is to offer *real* value up front, then reward loyalty. Not the other way around.
Be real. Be authentic. Show your human side. And get that second date.