The Psychology Of Discounts: Are You Inadvertently Training Your Customers?

Discounting—it feels like a surefire way to attract customers, right? Everyone loves a good bargain. But what happens when discounts stop being a tool and start becoming an expectation?

In this episode, Colin Shaw and Professor Ryan Hamilton dive into the dangerous addiction of price discounting—how it lures in customers, why businesses struggle to stop, and the long-term damage it can do to your brand and bottom line.

You'll hear painful stories of businesses that have trained their customers never to pay full price, the psychology behind why discounts are so irresistible, and why, if you’re not careful, your company could end up hooked on discounting like a bad habit.

This episode is packed with insights, humor, and practical advice you won’t want to miss!

Best Quote from the Episode:

"We knew we had a problem when one of the executives said, ‘This is like heroin—we can’t stop!’"

Key Takeaways:

✅ Discounting Works—But Be Careful!
Customers love a good deal, and discounts create instant excitement. But if you do it too often, you’re not just offering savings—you’re training customers to expect them.

✅ Reference Points Matter
A “Was $7, Now $5” deal feels like a win, even if $5 was always a fair price. Discounts give customers an anchor price, making them feel like they’re getting a bargain—even if they’re not.

✅ Big Numbers Win
People respond more to “SAVE 30%” than “SAVE $2.” The bigger the number, the better the deal seems.

✅ The Thrill of the Hunt
Shoppers love feeling like they “won” at shopping. 

✅ The Danger of Training Customers
If customers know you’ll discount every two weeks, they’ll never pay full price again. Some companies become trapped in perpetual discounting cycles, losing profit just to keep customers coming back.

✅ Compete on Value, Not Just Price
Apple doesn’t run 50% off iPhone sales every Black Friday. Their customers pay full price because they believe in the value. If your business relies on discounts, ask yourself: Would customers still buy from us if we didn’t offer them?

✅ Are You a Discount Addict?
If discounts are your main strategy, it’s time to rethink. Are you making real money, or just moving stock? If the answer makes you nervous, it’s time for a change.

Why You Should Listen:

This episode is a must-listen for business leaders, marketers, and CX professionals who want to break free from the discount trap and build a pricing strategy that doesn’t just attract customers—but actually makes money.

About the Hosts:

Colin Shaw is a LinkedIn 'Top Voice' with a massive 284,000 followers and 86,000 subscribers to his 'Why Customers Buy' newsletter. Shaw is named one of the world's 'Top 150 Business Influencers' by LinkedIn. His company, Beyond Philosophy LLC, has been selected four times by the Financial Times as a top management consultancy. Shaw is co-host of the top 1.5% podcast 'The Intuitive Customer'—with over 600,000 downloads—and author of eight best-sellers on customer experience, Shaw is a sought-after keynote speaker. Follow Colin on LinkedIn.

Ryan Hamilton is a Professor of Marketing at Emory University's Goizueta Business School and co-author of 'The Intuitive Customer' book. An award-winning teacher and researcher in consumer psychology, he has been named one of Poets & Quants' "World’s Best 40 B-School Profs Under 40." His research focuses on how brands, prices, and choice architecture influence shopper decision-making, and his findings have been published in top academic journals and covered by major media outlets like The New York Times and CNN. His work highlights how psychology can help firms better understand and serve their customers. Ryan has a new book launch in June 2025 called “The Growth Dilemma: Managing Your Brand When Different Customers Want Different Things” Harvard Business Press Follow Ryan on LinkedIn.

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