---
id: "concept-goodwill-discounting"
type: "concept"
source_timestamps: ["§ Engender goodwill with repeat customers"]
tags: ["customer-relations", "b2b-sales", "retention"]
related: ["claim-goodwill-does-not-equal-loyalty", "action-substitute-b2b-discounts-with-perks"]
definition: "The practice of offering price reductions to build relationships and prompt repeat business, which carries the risk of margin erosion without guaranteeing true loyalty."
sources: ["commercial"]
sourceVaultSlug: "hbr-seg-commercial"
originDay: 5
articleStem: "hbr-ext-22-art-of-discounting"
sourceUrl: "https://hbr.org/2026/05/the-art-of-discounting"
sourceTitle: "The Art of Discounting"
---
# Goodwill Discounting vs. Locked-in Loyalty

Goodwill discounting offers price breaks to repeat customers or local communities to strengthen relationships and prompt more frequent visits — for example, a Thai restaurant offering 10% off to residents of a nearby condo. In **B2B sales** it often appears as keeping prices flat year-over-year as a *"moment of gratitude."*

Mohammed's warning: **do not confuse goodwill with locked-in loyalty.** Customers readily defect when a competitor offers a better value proposition, regardless of past goodwill — the point argued in [[claim-goodwill-does-not-equal-loyalty]].

In B2B specifically, buyers are usually **spending company money**, so a direct price cut helps their employer's bottom line but may not build personal goodwill with the buyer — and it needlessly erodes the seller's margin. The recommended substitute is cheaper, buyer-pleasing **perks** (a fancy meal, white-glove service, a round of golf) — see [[action-substitute-b2b-discounts-with-perks]]. Counter-perspective from the enrichment: B2B discounting can still be rational when it meaningfully improves deal probability, reduces procurement friction, or secures a long-term contract.


## Related across articles
- [[claim-token-charge-responsibility]]
- [[concept-value-anchoring]]