Hi, I’m Suchit Patel, Account Strategist at Multidots, helping digital publishers optimize their subscription strategies and maximize long-term revenue through strategic technology solutions.
In this article, we explore why promotional pricing strategies might be undermining your subscription revenue goals, examining the psychology behind discount addiction and sharing actionable alternatives that protect long-term profitability.
Picture this: You’re at your quarterly board meeting, proudly presenting your subscriber acquisition numbers. The graphs look great—thousands of new subscribers poured in during your latest 50% off promotion. But then someone asks the dreaded question: “What’s our churn rate looking like?”
That’s when the smile starts to fade.
If you’re relying heavily on discount promotions to drive subscription growth, you might be winning the battle but losing the war. Here’s why your discount strategy could be undermining your long-term revenue goals, and what to do about it.
The psychology behind discount addiction
We need to talk about what discount promotions actually do to subscriber behavior. When customers sign up during a promotional period, they’re not just getting a financial break—they’re forming psychological associations about your product’s value.
Research in behavioral economics shows that customers who acquire subscriptions through heavy discounts (30% or more) often develop what’s called “reference price anchoring.” They anchor their perception of your product’s worth to the discounted price, not the full price. When that promotional period ends, they don’t see it as returning to normal pricing—they see it as a price increase.
This creates three immediate problems:
Price sensitivity increases. Discount-acquired subscribers are more likely to cancel when promotional pricing ends. At Deezer, for example, they saw big deterioration in retention rates during promotional periods, with growth becoming “less so over time” as the market became saturated with discounts.
Perceived value decreases. If you’re constantly offering 50% off, customers start questioning whether your full price reflects real value. Why would they pay full price when they know another promotion is probably around the corner?
Waiting behavior develops. Smart customers will start gaming your system, canceling and re-subscribing only during promotional periods. This turns your subscription model into a transactional one.
The LTV impact that’s hiding in your metrics
Let’s get concrete about what this means for your bottom line. Customer Lifetime Value (LTV) isn’t just average revenue per user divided by churn rate—it’s where the real impact of discount addiction shows up.
When Lisa Boucher moved from streaming services to digital publishing at Lagardère News, she brought this insight with her: “At JDD, we had a special offer of €1 for the first month. This used to be free, but we wanted to avoid users having a lower perceived value of our product as well as limit churn associated with payment problems.”
This wasn’t just about avoiding payment friction—it was about value perception. Even a small initial payment creates psychological commitment that free trials don’t.
Consider this scenario: Publisher A acquires 1,000 subscribers at full price ($10/month) with a 5% monthly churn rate. Publisher B acquires 1,000 subscribers at 50% off ($5/month for first 3 months, then $10) with an 8% monthly churn rate once pricing normalizes.
Publisher A LTV: $10 ÷ 0.05 = $200 per subscriber
Publisher B LTV: Much more complex, but roughly $125 per subscriber when you factor in the discounted period and higher churn
That’s a 37% difference in lifetime value. Multiply that across thousands of subscribers, and you’re looking at significant revenue impact.
Breaking the discount cycle without killing acquisition
The good news? You don’t have to go cold turkey on promotions. You need to get strategic about how and when you use them.
Target your discounts strategically
Instead of broad promotional blasts, create targeted discount strategies based on user behavior and segments:
Win-back campaigns. Use discounts to re-engage churned subscribers who previously paid full price. They already understand your value proposition.
Specific audience segments. Students, seniors, or industry-specific groups can receive ongoing discounted rates without affecting your general pricing perception.
Bundle strategies. Rather than discounting your core subscription, create bundles that add value while maintaining your base price integrity. For enterprise publishers, this might include premium WordPress features like advanced caching, security enhancements, or priority support alongside your content subscription.
Time-limited value adds
Replace percentage discounts with time-limited bonus features or content access. This creates urgency without devaluing your core offering. The Guardian does this effectively with their supporter perks—early access to events, premium newsletters, or exclusive content that doesn’t impact their main subscription pricing.
The Le Monde approach
Le Monde’s strategy offers a masterclass in avoiding discount addiction through their “price-last” approach. Instead of competing on promotional pricing, they focus first on improving the offering, perceived value, user experience, and fraud prevention—only then do they adjust prices. Their original tiered pricing model (€1 first month, rising to €17.90 by year three) was acquisition-focused but failed at retention.
Rather than doubling down on discounts, they developed multi-account subscriptions and fraud prevention technology, allowing them to offer family plans at higher price points. When testing price increases, they A/B tested carefully and chose conservative approaches that maintained retention. The result? Steady ARPU growth since 2020 without promotional pricing dependency.
Measuring what matters
To break free from discount dependency, you need to track the right metrics:
Cohort-based LTV. Track the lifetime value of subscribers acquired during promotional periods versus full-price periods. Most subscription businesses discover a significant gap here.
Churn by acquisition channel. Don’t just track overall churn—break it down by how subscribers were acquired. Promotional cohorts often show 20-40% higher churn rates.
Price elasticity testing. Before launching that next 50% off campaign, test smaller discounts (10-20%) or alternative value propositions to find your optimal balance point.
What to do this week
Here’s your action plan for reducing discount dependency:
Audit your current promotional strategy. Calculate the true LTV impact of your discount-acquired subscribers. You might be surprised by what you find.
Test alternative value propositions. Instead of your next 50% off campaign, try offering extended trial periods, bonus content, or feature upgrades at full price. Enterprise publishers might also consider technical improvements like faster page load times, enhanced mobile experiences, or premium WordPress hosting as value-adds that don’t require discounting.
Segment your audience. Identify which customer segments actually need promotional pricing to convert and which will convert at full price with the right messaging.
Create a promotional calendar. Limit promotional periods to specific times of year (like streaming services do) rather than constant discounting.
The long game
Breaking discount addiction isn’t about never using promotions—it’s about using them strategically to support, not undermine, your subscription revenue goals. The most successful publishers understand that sustainable growth comes from acquiring customers who value your content enough to pay full price for it.
Your board meeting metrics might look slightly less impressive in the short term, but your LTV calculations and long-term revenue projections will tell a much better story. And isn’t that the story you really want to be telling?
The next time you’re tempted to launch another 50% off campaign, ask yourself: Are we acquiring customers, or are we training them to expect discounts? The answer might change everything about your acquisition strategy.
