“I call these… fun coupons.”
— Every brand, right before their margins vanish
Coupon codes work.
They drive clicks. They boost urgency. They move inventory.
But they also come with a hidden cost.
Without a strategy, that discount you think is helping your funnel might be doing more damage than good.
Let’s break down what’s really happening when you launch that next promo code—and how to make it work for you, not against you.
Situation: The Sales Slump and the Dopamine Hit
Sales are soft.
Conversions are down.
Leadership’s asking for a quick win.
And someone says it.
“Let’s run a coupon.”
It sounds smart—because discounts create action. Fast.
You feel like you’re fixing the funnel. The team sees a spike in volume. Everyone celebrates.
Until you look under the hood.
Problem: You’re Winning the Wrong Way
That 10% code? It’s now on:
- Dozens of deal sites
- Reddit threads you can’t control
- Coupon browser extensions
- And worst of all—your own checkout page, cannibalizing full-price buyers
You’re not creating new customers.
You’re converting the ones you already had—at a lower margin—and still paying commission for the privilege.
Affiliate partners start poaching your organic traffic.
Buyers start holding out for the next code.
Your brand becomes “the discount brand.”
You’re selling more.
But keeping less.
Implication: Discounts That Feel Good… Until They Don’t
This is where most brands lose the plot.
They think the coupon worked—because sales increased.
But revenue dropped. CAC spiked. LTV shrank.
Refunds went up. Trust went down.
And now every customer is conditioned to ask:
“What’s the code this week?”
You’re stuck in a cycle of chasing volume at the expense of value.
Need-Payoff: When Coupons Actually Work
Coupons can be smart—if you treat them like a controlled growth tool, not a shortcut.
They can help you:
- Push slow-moving inventory
- Convert indecisive shoppers
- Reward repeat buyers
- Support affiliates in high-intent channels
But only if you apply guardrails.
A Real Case: From Burnout to Balance
One skincare brand we worked with took the shotgun approach:
- Blanket discounts
- No partner rules
- No timing control
Result?
- A spike in sales
- Followed by massive churn, refund abuse, and serious margin erosion
Here’s how we rebuilt it:
- 10% off only for new customers
- Limited to 3 trusted affiliates
- Commissions paid only after a second purchase
- Time-based expiration to build urgency, not reliance
What changed?
- Sales still grew
- But now margins held
- Refund rates dropped
- And LTV bounced back
It wasn’t about the coupon.
It was about how it was used.
Bottom Line: Coupons Aren’t a Strategy. They’re a Trigger.
They can ignite growth—or burn your margins.
Used well, they:
- Create urgency
- Help close strategic gaps in the funnel
- Support real affiliate performance
Used poorly, they:
- Erode brand equity
- Wreck margin
- Undermine customer trust
So before you launch your next code, ask:
Is this fueling long-term growth —
Or just setting fire to your bottom line?
