The Coupon Issue
When Promotions Start Rewriting Brand Economics
Coupons are rarely positioned as a strategic risk. They’re framed as tactical levers; short-term boosts to conversion, volume accelerators, necessary tools in competitive retail ecosystems. In many organizations, they are simply part of doing business. A promotion moves units, protects share, stimulates traffic, and the dashboard reflects positive activity.
But beneath that operational normalcy lies a more consequential question: are coupons driving growth, or are they quietly retraining both your customer base and your economics?
That distinction, I think, matters more than most organizations acknowledge.
Promotions are typically justified through volume metrics. Units move. Redemption rates look healthy. Short-term sales lift appears concrete. But volume is not the same as value. When a brand leans heavily on coupons, it does more than lower price, it begins signaling expectation. Over time, that expectation becomes conditioning. Customers anchor on discounted access rather than full-price value, and the organization may celebrate lift while margin absorbs the habit. The risk is not a single promotion. The risk is normalization.
Once discounting becomes embedded in the purchase cycle, reversing that behavior becomes structurally difficult. What began as an incentive gradually evolves into dependency. The economics do not shift overnight; they drift over time. My observation is that drift is harder to detect than decline.
There is also a quieter dimension to the coupon issue that surfaces from the consumer side.
Today’s buyers are far more pricing-aware than many organizations assume. They compare instantly. They track patterns. They recognize cadence. When a vehicle can be marked down dramatically during a seasonal event but rarely negotiated that deeply under normal conditions, when a national pizza chain conditions customers to expect a standing “deal” price far below menu pricing, or when apparel brands rotate 40–50% promotions so frequently that full price feels temporary, a subtle question begins to form:
What was the real price to begin with?
Heavy discounting does not simply condition purchase behavior. It conditions consumer perception. If a brand can routinely reduce price by 40 or 50 percent and remain profitable, the implied message is not just generosity, it’s pricing elasticity. And elasticity invites skepticism.
Consumers may not articulate it that way, but they feel it. If the item is constantly on sale, the sale no longer feels exceptional. It feels structural. The brand is no longer reinforcing value; it is reinforcing negotiation.
That shift has economic consequences. Transactional loyalty replaces brand preference. Customers learn to optimize around deals rather than choose based on conviction. The organization, meanwhile, may believe it is maintaining competitiveness while gradually eroding price integrity, and this is where the coupon issue becomes less about marketing tactics and more about economic discipline.
Promotions absolutely have a role. They can accelerate trial, support launches, correct inventory imbalances, or respond to competitive pressure. Used deliberately, they are precision tools. Used habitually, they begin reshaping systems.
The mature conversation is not whether coupons “work.” They often do … in the short term. The mature conversation is what they reinforce.
Are promotions expanding your base, or narrowing it toward price-sensitive segments? Are they driving incremental demand, or subsidizing existing buyers? Are they strengthening perceived value, or teaching customers to wait for the next code?
These are not marketing questions alone. They are questions of long-term positioning and margin architecture. Because once customers are trained to equate your brand with the discount rather than the product, price becomes the story. And price is rarely the story that sustains a durable advantage.
Growth driven by discounting often reflects reactive architecture rather than intentional brand design - a pattern that shows up well beyond pricing strategy.