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A Guide to Subscription Discounts: How Much Should You Offer?
A Guide to Subscription Discounts: How Much Should You Offer?
Updated over a week ago


Subscription businesses have become increasingly popular, and many entrepreneurs wonder: should discounts be a regular feature? While they can attract customers, inappropriate usage can also be a growth deterrent. Here's how to get the most out of your subscription discounts.

Understanding the “Subscribe and Save” Model

The essence of "subscribe and save" lies in a value exchange:

  • Merchants gain consistent revenue and can better plan inventory.

  • Customers benefit from lower prices and the convenience of auto-refills.

It's essential to realize that the aim of discounts isn't just to attract one-time buyers. Instead of tempting potential customers with a large initial discount, like 20% off their first purchase, consider offering smaller, continuous discounts throughout their subscription period. This encourages prolonged engagement with your brand.

When Discounts Can Amplify Subscriptions

The key to an impactful discount strategy is targeting. Discounts should be tailored to entice those already showing interest in your product or those who've made one-off purchases without a subscription. The idea is to promote sustained loyalty rather than sporadic purchases.

The Potential Downside of Discounts: Churn

High discounts may result in high churn. Data suggests that businesses offering consistent discounts might see a spike in subscriber turnover. There are primarily two types of discount-driven customers:

  1. Price-focused Customers: These shoppers are primarily looking for bargains. They might be lured by hefty discounts, but they're also likely to jump ship as soon as a better deal comes along.

  2. Experience-focused Customers: This group values the overall experience, from product quality to customer service. They're less attracted by heavy discounts and more by the overall value proposition.

Recognizing which type of customers you want to attract and retain will guide your discounting strategy.

Optimizing the “Subscribe & Save” Discounts

For businesses just stepping into the subscription arena, it's wise to begin with modest discounts. From there, segment your customer base and experiment with different offers, tracking their impact on conversion and retention rates.

While high churn might seem concerning, it's not always a negative. Some businesses have strategically offered substantial discounts, which initially resulted in increased churn. However, the remaining subscribers significantly increased their spending, offsetting the initial loss.

Consider Legion Athletics: experienced a 50% churn in the first three months after introducing a major promotion. But the spending of the remaining customers increased by 42%, and their long-term value soared by 172%. Clearly, the discount strategy can be beneficial, but it needs a tailored approach.

Laying the Foundations Right

At the core, consumers are attracted by the product, the brand's reputation, and the experience they receive. This trio often trumps discounts. Ensure you focus on these areas, coupled with strategic discounting.

Moreover, understanding the reasons behind subscription cancellations is crucial. If you're not addressing the root cause, even the most tempting discounts won't retain customers.

The Product Type Dictates the Discount Strategy

Typically, everyday products like razors or pet food could benefit from regular subscription discounts since customers often compare prices for these items. However, unique products delivering unparalleled experiences should be careful with discounting. For example, Dry Farm Wines, a wine brand, decided against any discounts, emphasizing the product's value and quality instead. This approach attracted subscribers with a higher potential long-term value.

Relying on a Data-Centric Strategy

Harnessing data analytics to understand customer behavior is pivotal. What attracts them to your product? Why do they opt-out? Such insights can inform better content strategies and enhance subscription experiences, ensuring your business stays a step ahead of the competition.


In the realm of subscriptions, discounts are a powerful tool but should be used judiciously. By understanding your product, your target audience, and their behaviors, you can sculpt a strategy that amplifies growth, boosts retention, and maximizes profits.

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