I found myself in a familiar conversation with a founder recently who’s been running a steady stream of promotions for the past year. On the surface, things looked great: consistent revenue spikes, sales targets being hit, and a strong sense of momentum.

The founder was confident. “The promotions are working,” they told me. “We’re growing.” But, I couldn’t shake the feeling that something was off. It looked like growth - but was it the right kind of growth?

I didn’t have hard proof at the time. Just instinct.

Because beneath the buzz of short-term wins, bigger questions were starting to surface:

These are the kinds of questions that often get lost in the glow of a big sales day - but they matter.

So I went away and back to the research (hello again, Byron Sharp and How Brands Grow) and dug into what promotions really do to a business over time…

The truth is, it’s more nuanced and surprising than you might think.

Time to explain the promotion paradox

Let’s be honest…promotions feel good.

They deliver that satisfying sales spike. Your existing customers stock up. Occasional buyers are nudged into action. Everyone’s buzzing. It’s tempting to see those numbers and assume: this is growth.

And in the short term, it is.

But here’s what Sharp’s research - and what I’ve seen play out over and over reveals about the longer-term impact:

1. Sales often drop sharply after a promotion ends

2. New customer acquisition from discounts tends to be low quality

3. Full-price sales shrink as people learn to wait

4. Margins quietly erode, even as revenue looks strong

I’m definitely guilty of riding the promo hamster wheel

At Leaf Envy, we used to run “25% off everything” promos at the end of each quarter. It helped us hit targets, kept the board happy, and felt like momentum.

But by the fourth cycle, the results were tapering off. Customers had clocked the pattern and were holding out. Full-price sales dipped. Margins got tighter.

We’d created a system that looked like success - but was quietly weakening the brand underneath.

It’s what Sharp calls the “promotional drug”: an early high, followed by diminishing returns, and ultimately, dependency.

Finding the sweet spot

Just to confirm…I’m not anti-promotion. There’s a time and place. The key is to use them strategically, not habitually.

The most successful brands I work with strike what I call a Promotion–Brand Balance. That means they:

Here are three approaches I’ve seen work brilliantly:

1. The Gateway Product Approach
   Instead of discounting the main product, offer a smaller entry point. One coffee subscription brand I know launched a “starter kit” at a lower price rather than slashing subscription fees.

2. The Value-Add Alternative
   Rather than dropping prices, add something extra. Replace your quarterly 25% off sale with a “free gift with purchase” campaign, so the brand feels elevated - not discounted.

3. The Targeted Reward System

   Different groups respond to different incentives. A beauty brand segmented their promotions into three streams:

   • A sampling programme for new customers (low cost, high impact).

   • Exclusive perks for loyal customers (maintains premium feel).

   • Gentle reactivation offers for lapsed users (without training them to expect discounts)

   Each one delivered growth - without diluting the brand.

The long game (and what happens when you pause promos)

Across the brands I’ve worked with, and in the research from How Brands Grow - there’s a clear pattern that emerges when businesses shift from relying heavily on promotions to investing in long-term brand building.

It’s not always an easy switch, but the payoff can be significant.

Here’s how that shift typically plays out:

• Months 1–2: Sales often dip as the business adjusts. Without the immediate boost from discounts, things can feel uncertain.

• Months 3–4: Stabilisation begins. Organic traffic improves, and customer quality starts to shift—fewer bargain hunters, more aligned buyers.

• Months 6+: Higher-margin sales increase, customer acquisition costs (CAC) drop, and lifetime value (LTV) improves. You’re not just selling more—you’re selling better.

Why this works:

It all comes down to mental availability and distinctiveness - two of the most important concepts in modern brand building.

Promotions don’t build either of these.

In fact, they often reduce distinctiveness by training customers to see your brand as interchangeable with others offering similar discounts.

But when you invest in your brand - through storytelling, community, creative campaigns, and consistent visual identity - you start to show up more often and more memorably in the minds of potential customers. That’s when the magic happens.

So yes, stepping off the promo treadmill takes courage. But when brands commit to the long game, they often find themselves spending less, earning more, and building something that lasts.

Your promotion plan reset

If you’re wondering whether your own promotions are fuelling growth or masking cracks, here’s where I’d start:

1. Do a promotion audit. Track not just the revenue during the promo, but what happens after. Did new customers stick? Did margins hold?

Use this formula to get a clearer picture:

2. Test the minimal viable offer:
   Try a smaller discount, or no discount with added value. In many cases, 15% targeted offers perform nearly as well as 30% storewide sales.

3. Reinvest 10% in brand:
   Start small. Carve out a portion of your promo budget to invest in brand storytelling, better creative, or audience-building campaigns. Measure the results over 90 days—you might be surprised by what you see.

Closing thoughts:

If you’re in a business that’s been leaning on promotions for a while, I get it. It can feel risky to slow down the thing that’s “working.”

But short-term tactics can become long-term traps, and sometimes, the bravest move is pressing pause, just long enough to rebuild from a stronger place.

I’ll be working with a few clients this month to shift their promotion strategies. I’ll keep sharing what we learn.

In the meantime, I’d love to hear from you: Have promotions helped you grow, or started to feel like a crutch? Hit reply! I read every response, and they often spark the next newsletter.

With you on the journey,
Beth

• Connect with me on LinkedIn.

• Check out my Fractional CMO service here.

• Got questions or a topic you’d love me to cover?
  Email me at [email protected]

Disclaimer: I share advice from my own experience. Every business is unique, so tailor these ideas to fit your needs.