Discounts… one of my favorite business topics because it’s often misused.

They’re often seen as a necessary tool to attract customers, but not all discounts serve your business in the same way. While some discount strategies drive long-term profitability and customer loyalty, others stem from desperation and erode margins. Understanding the difference between intentional discounts and scarcity-based discounts is the difference between sustainable growth with predictable profits and wanting to pull your hair out and burn it to the ground.

The Problem with Scarcity Discounts

Scarcity-based discounts are reactionary and often driven by fear—fear of losing a sale, fear of competition, or fear of financial instability. When a business discounts its services or products out of panic rather than strategy, it creates a downward spiral of undervaluation and diminishing profitability.

The Worst Part

And what actually happens is you attract a lot of misaligned clients and customers that don’t care about life-changing transformations – they’re looking for cheap and easy.

One of the thoughts that was a major-mind shift for me around discounts is this: we worry about people not paying if our prices are ‘too high’, but there’s people out there NOT paying you because your prices look too low to get the quality they want.

And you slinging discounts (in the wrong way) is screaming low-quality.

So when you’re throwing discounts out there with no strategy, it looks desperate. And your customers aren’t consciously thinking this, but they are subconsciously, and they’re taking advantage of it.

And chances are, these people are the one and done types as well. You can have all the follow-ups systems in place but they never intended to fully commit in the first place.

Overall Business Issues

And then here are the other issues of scarcity-driven (or lack of intention) discounting:

• Discounting to fill your calendar: Overloads your schedule while reducing your profit margins.

• Pricing based on what “feels fair”: Leads to undervaluing your expertise and attracting price-sensitive customers rather than those who see the true value in your offerings.

• Competing on price rather than value: Turns your business into a commodity rather than a premium service provider, making it difficult to sustain profitability.

If you find yourself repeatedly discounting just to secure business, the real issue isn’t pricing—it’s positioning. Your clients should see the inherent value in your product or service without the need for constant markdowns.

The Value of Intentional Discounts

Unlike scarcity-based discounts, intentional discounts are planned and serve a long-term purpose. They are used strategically to enhance customer relationships, increase client retention, and drive profitable growth. Rather than devaluing your offerings, intentional discounts reinforce the value of doing business with you.

Here are ways intentional discounts can support your business:

• Loyalty-Based Discounts: Rewarding repeat customers with exclusive VIP pricing to increase retention and long-term value.

• High-Ticket Incentives: Encouraging clients to invest in larger service packages rather than smaller, piecemeal purchases, leading to more predictable and consistent revenue.

• Limited-Time Offers (With a Purpose): Creating urgency around a launch or new service without relying on unnecessary price slashing.

• Referral Incentives: Encouraging satisfied clients to bring in new business while protecting your pricing integrity.

• Moving Slow Moving Items: Getting slow moving inventory off your shelf to turn it into cash in the bank.

A Discount Should Work for You, Not Against You

Discounting should never be a means of survival—it should be a tool for growth. When executed correctly, strategic discounts strengthen brand value and customer loyalty while ensuring financial stability. If your discounting strategy is built solely on slashing prices to make a sale, you don’t have a pricing strategy—you have a problem.

Three Critical Questions Before Offering a Discount

Before you offer a discount, ask yourself:

1. Is this attracting my ideal client? If your discounts mainly draw bargain hunters who prioritize price over quality, you may need to reassess your approach.

2. How will this increase my profitability in the long run? Discounts should lead to higher customer lifetime value, not just short-term cash flow.

3. Am I discounting out of strategy or scarcity? If fear is driving your decision, it’s time to reframe your pricing strategy and focus on building value rather than cutting prices.

The Bottom Line

Scarcity-driven discounting may offer short-term relief, but it creates long-term instability. When you discount reactively, you train customers to expect lower prices, making it harder to establish real value. However, when applied intentionally, discounts can elevate your brand, cultivate client loyalty, and ensure sustainable growth.

A business built on scarcity discounts isn’t a business—it’s a struggle. Price with intention, sell with confidence, and profit predictably.