Almost every industry does it in some way, bundles, sales, discounts, coupons, free trials, and other marketing ploys that reduce prices for the buyer. Obviously, this means that the company is not making as much money as it could be by selling products or services at full price. So why do they do it? As part of a marketing strategy.
We’re here to speak about the marketing strategy behind sales, what to be aware of, what to watch out for, and how you can use discounts strategically to benefit your business.
So why does Selling Products or Services for less earn companies a Strong ROI?
This is a Marketing Strategy
The most important thing to know is that any kind of sale is, 95% of the time, a marketing strategy. Businesses usually don’t give discounts away to customers out of the goodness of their hearts (though they will claim otherwise). They incur the cost and apply these bundles + sales because they expect to gain something from it. Client and company interests just happen to align in this case.
Awareness
Just by mentioning the big word “SALE,” a company will increase traffic to its stores or locations. As buyers, we are drawn to a product or service that’s being offered at a discounted rate. We look for ways we can save money, and a business promising to sell our favorite product 20% off is an attractive offer to get us in the store or click that add to cart button.
Usually (but not always), a business still makes a small profit margin on a discounted product, but being engaged with the business is what’s really of value. Once we are engaged with a business, we are much more likely to buy more products from them (now or in the future) or return to their service moving forward. OR we add many things on sale to our carts, and the company makes a profit on those margins. 
Think of it like this, the company spends the money they would have otherwise earned by selling their product at full price, to get people engaged. That right there sounds like a marketing budget to me.
Loyalty and Demonstration
You might ask how bargain rates affect businesses that don’t have products. Ones that have discounted services instead, well, that all comes down to loyalty. Loyalty affects both service-based and non-service-based industries, but is especially important to the services. If you go to a mechanic and they offer you a free oil change, that is a form of a bundle or discount. They could easily charge you for that, but they don’t.
- It’s not much of a cost for them
- It gets you in the door
- It convinces you to come back
By offering this service at a premium, it gives them a chance to demonstrate they can do the service for you well, but it shows you that if you keep coming back, there are more potential offers, more opportunities to save money, and overall, once you find a good mechanic, plumber, landscaper, or most other services, you don’t have a reason to switch. Getting someone in the door for a service like this is huge for a company (As long as they provide good service).
Rewards Programs
It’s 2026. It would be wrong of me not to at least mention rewards programs. Because they are everywhere. A rewards program is relatively simple in concept; discounts, coupons, or sales are rewarded to you for frequent visits or use of the service. This, in practice, convinces people to be loyal to their rewards program. They could try a competitor’s pizza, but they could also try the pizza joint that gives them a free pizza for every 5 they buy.
Free Trials
Like with rewards programs, free trials are everywhere now, and to be honest, they work wonders. They are most useful to get people through the door of a service. A free trial gives the business a chance to demonstrate its usefulness before the customer makes a financial commitment. In an ideal world, a consumer uses a free trial to see if they like a service before investing in that service.
As we know, that’s not how free trials work in practice… but we will get into that in a bit.
CRO – Converts a Non-sale into a Sale
Another reason bargains are huge is that they can be the final push that someone needs to buy a product. On the web, this is called Conversion Rate Optimization. You might not buy the Jumbo Ultra Pillow Sleeper + on Amazon for $50, but if its 20% off, you would.
The reduced price convinces you to buy the product. You wouldn’t pay $50, but you would pay $40. So now that’s 40 bucks the online seller can pocket that it otherwise would miss out on.
The ideal scenario for the company would be to offer adaptive pricing depending on the customer. They only want to give the sale to people who wouldn’t buy it unless it was cheaper. If the people who would be happy to buy it at $50 get the 20% off, then that’s $10 per sale that the business could theoretically keep.
That’s why coupons exist
People who take the time to clip and save coupons and codes (physically or digitally) are the same price-minded people who are looking for ways to save money. They are the people who would buy my example of the Jumbo Ultra Pillow Sleeper + for $40 but not for $50. People who would buy it for $50 are less likely to take the time to find the coupon online or in the paper, so they would still pay the full price.
Additionally, coupon books are also an advertisement that people keep in their cars and houses (or a digital one that’s an app on their phone), constantly reminding them that a business exists; it’s really a win-win-win-win for marketing.
Sales and Scarcity
I think you get the point now, but this blog would be incomplete without mentioning the feeling of scarcity that sales famously provide. If you can get your Netflix subscription for 20% off this month, buy now while it’s on sale. The limited-time deal makes people convert very effectively into buyers.
Overall, the point is that any type of deal that customers are offered is an effective way to get them coming back or to get new customers in the door.
Sales = more customers/clients = more money $$$
Inventory and Management Reasons
The last and simplest way that selling discounted products benefits a business is for managing its inventory. If a product has been in stock too long in a warehouse or store, and the company would like to rotate it out, or it is expiring, they may sell it at a discounted price, even sometimes at a loss, just to keep things moving in the business.
It’s like a test you didn’t study for, you could just not take the test and take the 0%, or you could muddle through it the best you can and maybe get 10-60%, still a failing score, but when you factor it into your overall grade (You’re revenue), it was much better to get the 10-60%.
Keep the Ball Rolling and the Money Flowing
Profit and revenue are different things, and even if there are no profits, a company still wants to keep revenue moving in the right direction. Keeping the money flowing even at a loss allows businesses to pay their employees, costs, keep their website up, and have the business survive another day.
Fake Sales
Typically, sales benefit consumers and businesses, but there are several “Fake Sales” that you should be aware of that only really benefit businesses. Things that, on the surface, are designed to save you money, that actually end up costing you more. This fills businesses’ coffers with debatably unethical funds.
The Full Price Discount
If something has been on sale for a ridiculous amount of time, you can assume that’s the full price. These types of sales intentionally frame the product or service as being discounted but are actually full price. If a sale says 2 for $6, but it’s actually 1 product that individually costs $3 its trying to disguise itself as a bundle deal. Alternatively, a price could be artificially raised and then reduced with a sale to still end up costing the buyer the same amount, all for the appearance of being cheaper.
The Forgotten Subscription Service
As we discussed before, free trials ideally are used by customers to understand the service before backing it financially. If that’s true, let me pose a question. Why do they require a credit card to sign up for?
The answer is simple: basically, all subscription services that offer a free trial are hoping you forget about the trial, or are too lazy to cancel it. All too often, subscribers end up paying for services they don’t want. On top of that, cancellation is usually as hidden and complicated as companies can legally get away with, making it even harder not to have your money drained for a service you don’t need.
This is an extremely volatile marketing technique, which does admittedly provide great rewards. It can severely annoy the customer, but over the last 5 years, this tactic has become extremely common, so outrage is lessened. Either way, if your service is using a subscription model, you should be very cautious with how you approach it.
“The average consumer has 19 memberships, but only 9 are active.” Source: Rivo
Hostile Reward Programs
Most reward programs offer a simple promise: the more money you spend with us, the more deals you get. Some can be set up incredibly aggressively, though.
Subscribe for rewards
The most aggressive rewards programs make you subscribe to get the rewards. Meaning you have to spend money for access to the rewards. These are rare, but they have been popping up more and more throughout recent years.
Listen, if you are paying to subscribe to a rewards program, then to benefit from it, you have to earn rewards equal to or greater than the value of the subscription. Meaning that you have to spend even more money at a business, you already have invested in the program, you may as well get your money’s worth… by spending more money… Yeah, it’s incredibly aggressive marketing.
Expiring Reward Points
Reward points expiring is a genius way to create a sense of risk and scarcity. To be honest, the hostile nature of this is so threatening that it could be its own blog. Here are all the ways a business benefits from having expiring reward points
- The business still has a reward program, incentivising customers to buy more loyally
- The discounts are only offered after the customer has bought enough products
- The reward points expiring means that many (if not the majority) of the discounts don’t get used
- The reward points expiring creates a sense of urgency to use them (and buy more from the business
- Reward points usually can’t be used with other sales, meaning they are harder to use
- Reward points are usually only for a select number of products, meaning they are hard to use
- The business still gets the marketing and awareness benefits from all of this.
What you get when you combine all of these factors is a strong incentive for consumers to spend more and more with a business, but a business making the rewards harder and harder to actually achieve, meaning that very few people actually receive the benefit, while the business rakes in cash
Look, these “Fake Sales” have questionable ethics for sure, but unless legislation changes, they are legal. When they are used properly in a business’s marketing strategy, don’t underestimate how much ROI these can generate.
Sales, Bargains, Rebates, Rewards, Free Trials, Discounts, Premiums, and more
There are so many terms and techniques to describe the same thing, saving the customer or client money, so they interact with you more, bringing you a high ROI over time. I hope this blog helped you understand the many ways that discounts actually benefit businesses and has revealed the subtle strategies behind all of this.
If you own a business and are considering factoring sales into your marketing strategy, I hope this opened your eyes to how complicated and strategic it can be. Not to mention, discounts are just one aspect of a business’s much larger and much more complex marketing campaign. If you would like to build that marketing campaign, you’re going to need experts.
At Bean Media Productions, we have 20 years of experience navigating the ever-changing landscapes of marketing. We’ve seen the rise and fall of trends, and we’ve adapted our clients’ strategies to fit a modern world. So don’t be hesitant to get in touch with us so we can build a marketing plan for you.