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  As a small business owner in Nigeria, you’ve probably found yourself offering discounts just to attract customers. It seems like a quick way to boost sales, but is it helping your business grow?
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The hard truth is that constant discounts can devalue your brand, reduce your profit margins, and attract the wrong kind of customers (those who only buy when there’s a price cut). Instead of giving discounts, you should focus on building customer loyalty. Loyal customers don’t just buy once, they keep coming back and refer others. In this article, we’ll explore why discounting is hurting your business and how to create lasting relationships with customers instead.

The Hidden Dangers of Discounting Too Often

  1. It Reduces Your Profit Margins

Offering discounts means you’re cutting into your profits. According to a study by McKinsey & Company, businesses that rely on discounting see an average profit loss of 30% over time due to reduced revenue per sale. If your business is already struggling with tight margins, frequent discounts could push you into losses.

  1. Discounts Attract Bargain Hunters, Not Loyal Customers

When you offer too many discounts, you train customers to wait for sales before making a purchase. A study by Harvard Business Review found that businesses that use excessive price promotions attract one-time buyers rather than repeat customers. Instead of building a strong customer base, you end up chasing short-term sales.

  1. It Devalues Your Brand

Think about luxury brands like Apple or Rolex. They never offer discounts, yet people still line up to buy their products. That’s because they have built a reputation for quality, value, and exclusivity. When you constantly discount your prices, customers start to see your products as low-value or desperate for sales.

  1. It Makes Future Price Increases Difficult

Once customers get used to paying a lower price, increasing it later can be challenging. Studies from Forbes reveal that price-sensitive customers are less likely to accept a price increase after being accustomed to frequent discounts.
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What to Do Instead of Discounting

  1. Focus on Customer Loyalty Programs

Loyal customers spend 67% more than new customers, according to research from BIA Advisory. Instead of reducing prices, reward repeat customers with exclusive perks like Cashback on future purchases, VIP access to new products, Referral rewards (e.g., get a discount when you bring a new customer)

  1. Offer Value-Added Services

Instead of slashing prices, offer something extra that enhances the customer experience. This could be:
  • Free consultation or product training
  • Extended warranties or guarantees
  • Exclusive community access (e.g., private WhatsApp group for premium customers)
These strategies help you stand out without hurting your profits.

  1. Focus on Quality and Personalization

In Nigeria, businesses that provide personalized service win customers’ hearts. A study by PwC found that 86% of consumers are willing to pay more for a better customer experience. Personalization strategies include:
  • Sending personalized thank-you messages after a purchase
  • Remembering customer preferences and recommending relevant products
  • Offering tailored promotions based on buying history

  1. Build a Strong Brand Reputation

Customers will pay more for a brand they trust. Invest in branding by maintaining a professional social media presence, sharing customer testimonials and success, and engaging customers with educational content (blog posts, videos, webinars)

  1. Use Scarcity and Urgency Instead of Discounts

Another strategy you can use instead of discounts is scarcity. Scarcity makes people buy faster without requiring price cuts. Popular examples of scarcity messaging businesses use include:
  • “Limited edition” products with only a few available
  • Exclusive deals for the first 100 customers
  • Pre-order bonuses instead of discounts
This strategy builds excitement and demand without hurting your profits.
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Concluding Thoughts

As a small business owner, you don’t need to rely on discounts to attract customers. Frequent discounting can hurt your business in the long run by lowering your profits, attracting disloyal buyers, and weakening your brand’s value. Instead, focus on building customer loyalty through personalized service, value-added offers, and a strong brand reputation. Customers who truly appreciate your business will pay for quality, without waiting for discounts.
Featured Image Source: Building Customer Loyalty
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This article was first published on 28th March 2025
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victor-ifegwu-mbonu

Ifegwu-Mbonu Victor is a Personal Growth and Leadership Trainer who provides training and coaching to individuals and organizations.

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