---
id: "framework-five-discounting-strategies"
type: "framework"
source_timestamps: ["§ Five Effective Discounting Strategies"]
tags: ["strategy-taxonomy", "revenue-growth"]
related: ["concept-discounting-hurdles", "concept-dynamic-pricing", "action-implement-price-hurdles", "action-nudge-cart-abandonment", "action-time-limit-b2b-deals", "action-substitute-b2b-discounts-with-perks", "concept-goodwill-discounting", "entity-mcdonalds"]
speakers: ["Rafi Mohammed"]
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"
---
# Five Effective Discounting Strategies

A taxonomy of five distinct opportunities where discounting can be strategically applied to meet customer needs and drive **incremental profit** without unnecessary [[concept-profit-cannibalization|cannibalization]].

1. **Serve customers who value products at less than their selling prices** — capture the low end of the demand curve using [[concept-discounting-hurdles|hurdles]] and demographic segmentation. Tactic: [[action-implement-price-hurdles]]. (This is where the dentist inspired by *[[entity-the-art-of-pricing|The Art of Pricing]]* offered 50% senior discounts to fill idle appointment slots.)
2. **Prompt current customers to purchase more** — use bundling, quantity discounts, and doorbusters to upsell existing buyers.
3. **Market to new customers** — partnership discounts, cart-abandonment nudges ([[action-nudge-cart-abandonment]]), and elevating a B2B proposal to the top of the stack with a time-limited price break ([[action-time-limit-b2b-deals]]).
4. **Adjust for changes in market value** — [[concept-dynamic-pricing|dynamic pricing]] driven by time, seasonality, weather, and competition. [[entity-mcdonalds-d5|McDonald's]] value push during inflation is the exemplar of aggressive, market-responsive discounting.
5. **Engender goodwill with repeat customers** — targeted discounts to deepen relationships, while staying mindful of margin erosion ([[concept-goodwill-discounting]]); in B2B, prefer cheaper perks over price cuts ([[action-substitute-b2b-discounts-with-perks]]).

*Note: dynamic pricing (strategy 4) is discussed in the source but not developed into its own concept note; [[concept-dynamic-pricing]] is a placeholder for that adjacent idea.*