James Nichols makes the case against giving discounts willy-nilly:
At its core, a brand's value is represented by the premium a company can charge versus its competitors. If I can get millions of people to pay $5.99 for Kellogg's Corn Flakes versus $2.99 for generic corn flakes, that's a strong brand. If I have to pass out $2.50 coupons to get folks to buy them, that's a weak brand. And if people get used to receiving $2.50 coupons all the time, they'll ultimately think less of the coupons.
It's a fair point, although this later statement doesn't ring true:
(...) he told me that they were in the business of giving consumers what they want. OK fine, but the consumers aren't actually paying his salary. Brands are.
Excuse my cynicism, but what the consumer wants is everything for free.
Even consumers don't want everything for free (in the B2B world, that's even more the case). They want good value, certainly, but they're willing to pay for quality, convenience, etc.
Some consumers do want everything for free - these are the people that get marketed expensive financial products like credit cards that give a sign-on bonus, payday loans, lotteries, and other similar dubious products. See for yourself (look at the adverts on the right hand side).
If you build a product specifically for that crowd, though, you've got bigger problems than giving away too many coupons.
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