Dose #186: How to Use Discounts, Gifts, and Promotions Without Killing Your LTV

Matt here with your weekly Subscription Prescription 💊

Discounts. Sales. We talk all the time about ways to get and keep subscribers, but in this week’s dose, we dive into the right places (and right times) for discounts, gifts, and promotions. From acquisition to cancel surveys, and even special promotions, we cover it all.

This week’s dose is a nice long rant where I talk about discounts, promotions, and special offers. Take a listen (or watch) on your favorite platform:

The ROI of Discounts, Gifts, and Promotions

This time of year, a lot of subscription brands are ramping up their marketing calendars and scrambling to find the right combination of incentives to drive growth. I’ve had more conversations than I can count lately about what “works” when it comes to offers: Should we use a discount? Add a gift? Run a flash sale for January?

Here’s what I tell people: it’s not about what works, but what works for the type of subscriber you're trying to attract - and how you want them to behave later.

Here are three key principles I keep coming back to when planning offers for subscription brands:

1. Big discounts convert, but value-based bundles retain

Discounts are one of the easiest tools in the toolkit for getting someone to start a subscription. But the real problem isn’t conversion, it’s what happens after. When you use deep discounts to acquire subscribers, you tend to attract price-sensitive buyers who cancel quickly and don’t have much brand loyalty.

I’ve seen brands have more success reframing their offers around value instead of just price. That means things like:

• Buy two, get one free

• 3-month supply at a 20% savings

• “Family packs” or multi-user bundles

These value-seeking customers behave differently. They’re more likely to commit upfront, and their LTV tends to be higher because they weren’t just chasing a one-time deal.

2. Gifts are great - but not when you give them to everyone

Offering a free gift at signup or during a key renewal period can work really well. The key is making sure the gift complements the product and actually means something to the customer. A sample, accessory, or bonus item from your own catalog usually works best.

Where brands go wrong is trying to use gifts as a blanket solution to improve churn. If you’re spending $2 on a gift and sending it to 10,000 subscribers just to boost your month-two renewal rate, that’s a $20,000 bet. It only pays off if you can measure the impact and prove it moves the needle on margin.

A smarter way to use gifts:

• Make them opt-in through a billing reminder or portal widget

• Use them in cancellation flows for high-risk segments

• Feature them prominently in acquisition offers to help drive take rate

If you’re going to give something away, make sure it counts and is part of the experience. Not an afterthought.

3. Promotions can hurt more than they help (unless they’re segmented)

One of the biggest challenges I see is when brands run big sitewide sales and unintentionally train their customers to wait for discounts. This creates a spike-and-dip cycle that makes it hard to scale subscriptions consistently. Worse, it causes active subscribers to cancel and re-buy during promotions.

There’s a better way: use your subscription tools and communication channels to create subscriber-only promotions that feel special and exclusive. Instead of offering 30% off to everyone, give your subscribers:

• A one-time 50% off add-on

• Early access to a new SKU

• A limited-edition item only available through the portal

This flips the psychology. Instead of punishing loyalty with worse pricing, you reward it. Over time, that changes the relationship between your subscribers and your brand.

There’s no one-size-fits-all answer to a great offer strategy. But if you're willing to test, segment, and align incentives with the right customers, you’ll build a stronger base of subscribers who stay for the right reasons.

Until next Tuesday, that’s your Subscription Prescription. 💊

 - Matt Holman 🩺

The Subscription Doc