Lots of businesses rely on discounts to keep sales moving, but when it’s time to shift toward better margins or a more premium brand, pulling back too fast can cause real damage. If you drop the discounts without a clear plan or a solid value-based pricing strategy, customers can walk, sales can slip, and the value you’re trying to build might not come through.

 

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When Brand and Pricing Strategy Transition Go Wrong

 

Honey Birdette cut sale days by 50%. The goal? Protect margins and strengthen brand positioning. But it came at a steep cost—a 21% drop in revenue in one quarter, translating to A$5.7 million in lost sales.

 

The shift wasn’t necessarily wrong. In fact, moving toward premium pricing can be the right value-based pricing strategy when executed well. But Honey Birdette’s case shows what happens when it’s done too quickly, without the proper groundwork.

 

Customers used to regular promotions suddenly saw fewer opportunities to buy at lower prices, without any clear message of why the brand was now worth more. The value proposition hadn’t been reinforced. The result? Customers disengaged.

 

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What Happens When You Cut Discounts Unprepared

 

1. You lose customer trust. Customers who regularly buy at discounted prices expect those offers to continue. When you take discounts away abruptly, without explanation or added value, it feels like a bait-and-switch. Trust erodes quickly, and customers look elsewhere.

 

2. Margins don’t automatically improve. Cutting discounts can improve margins—but only if sales hold steady. If demand drops sharply (as in Honey Birdette’s case), you’re left with lower revenue and only slightly better margins. You may even hurt overall profitability.

 

3. Brand perception suffers. If you position yourself as premium, every part of your experience must match: product quality, packaging, service, and messaging. Without alignment, customers notice the price hike but not the value.

 

4. You create buying hesitation. When customers feel uncertain about value or pricing fairness, they delay or avoid purchases. They may wait for discounts to return or abandon the brand altogether.

 

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A Value-Based Brand and Pricing Strategy Done Right

 

Here’s how to make the shift to a value-based pricing strategy:

 

1. Clarify and reinforce your value. Your value proposition should be crystal clear before you reduce discounts. What makes your offer worth full price? Is it of superior quality? Better service? Brand identity? Exclusive experiences?

 

Communicate this consistently across channels. Use customer testimonials, lifestyle branding, education, and product storytelling. Every touchpoint should reinforce why your offer is worth more, without needing a sale.

 

2. Talk to your customers. Use data and direct feedback to understand price sensitivity. Tools like price elasticity testing, customer surveys, and behavioural data help you determine how customers will react to fewer discounts or higher prices.

 

3. Use smart price architecture. Introducing new tiers, bundles, or smaller entry-level offers gives customers more ways to engage without discounting. It also protects premium positioning by offering value in different formats.

 

Think “good-better-best” strategies, service add-ons, or memberships that reward loyalty without eroding margin. Price architecture helps you reduce the need for deep promotions while still offering choice.

 

4. Train your team. Your customer-facing teams must be ready to articulate value confidently. If they default to justifying prices by comparing to competitors or apologising for lack of discounts, the strategy falls apart.

 

Equip them with value-selling tools, language, and confidence. Show them how to reinforce the brand’s worth, not just quote numbers. Internal alignment is as vital as the external message.

 

 

5. Align pricing across your business. Pricing can’t be siloed. Marketing, sales, product, and finance must all work together. Your pricing team should facilitate this alignment by modelling revenue impact, running experiments, and guiding execution.

 

Without this coordination, changes feel disjointed and confuse the customer. Unified planning helps avoid mixed signals and reinforces consistent value across the customer journey.

 

6. Execute a phased rollout. Going cold turkey on discounting is risky. Instead, test in one region, product line, or channel. Track what happens. Watch for drop-offs in conversion or spikes in customer questions.

 

Then refine. Then expand. Controlled rollout lets you minimise downside while learning what works.

 

Why Value-Based Pricing Capability and Strategy Matters

 

Value-based pricing strategy is not guesswork. It requires skill, data, and cross-functional execution. Companies without in-house pricing capability are more likely to default to discounting because it’s easy to implement, but hard to sustain.

 

A strong pricing team:

 

  • Reads market signals in real time
  • Designs pricing structures that reflect customer value
  • Tests and measures impact
  • Aligns pricing decisions with overall business strategy

 

Without this function, businesses are flying blind.

 

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When you manage the shift well:

 

  • Margins improve
  • Brand perception strengthens
  • You attract more loyal and profitable customers
  • You invest more in experience and innovation, not markdowns

 

Customers pay full price because they believe in your value-based pricing strategy. And that’s the ultimate win.

 

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How to Build Your Value-Based Pricing Strategy

 

Cutting discounts is not the end goal. Creating pricing that reflects true value—and that customers are happy to pay for—is.

 

Honey Birdette’s story is a powerful reminder: without a clear plan and pricing capability, even a sound strategy can fail. But with the right team, tools, and approach, you can shift to a value-based pricing strategy and grow stronger in the process.

 

Want help planning your transition away from discounts? We help businesses build the right pricing models and teams to make that shift successfully. Let’s talk.

 

For a comprehensive view of integrating a high-performing pricing team in your company, Download a complimentary whitepaper on How to Improve Your Pricing Team Performance.

 

Are you a business in need of help aligning your pricing strategy, people and operations to deliver an immediate impact on profit?

If so, please call (+61) 2 9000 1115.

You can also email us at team@taylorwells.com.au if you have any further questions.

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