If you're running a DTC brand past $10M, someone in your leadership team has said it. Maybe in a planning meeting. Maybe on a Slack thread about margins. Maybe when someone questioned why retention is offering deeper discounts than acquisition.

"We're a discount-heavy brand."

It gets a nod. The conversation moves on. Nobody challenges it because it sounds like a strategic position. Like the company made a deliberate choice.

It wasn't a choice. It was a drift. And it's quietly eating your business from the inside.

It always starts the same way.

Acquisition runs a clean welcome offer. 15% off. Maybe 20%. First purchase comes in on a curated collection. Good margins. Clear value. The customer knows what they bought and why.

Then the handoff happens. Or more accurately, it doesn't.

Retention takes over with a completely different playbook. Different products. Different pricing logic. Different tone. The customer who bought a curated collection at 20% off is now getting emails about the full catalog with a $10 credit. Then $15. Then dollar-off stacks with free shipping.

Nobody designed this. It accumulated. One campaign at a time. One "quick win" at a time. One quarter where the retention team needed to hit a revenue target and credits were the fastest lever.

Three years later, you have a retention program that discounts harder than acquisition. And nobody can explain exactly when that started.

This is what ecommerce discount dependency looks like. Not a strategy decision. An accumulation of short-term revenue targets that became a margin problem.

Because the reports look fine.

Revenue is up. Repeat purchase rate is stable. Targets are hit. The quarterly review has green checkmarks.

Here's what those reports don't show.

They show YoY revenue growth. They don't show YoY net profit growth. Revenue went up because the discounts went deeper. Every repeat purchase cost more to generate than it did last year. The margin on returning customers is shrinking while the volume holds steady.

You grew the top line and shrank the business in the same quarter. But nobody sees it because the dashboard wasn't built to show it.

I've watched this happen. The retention team gets praised for hitting revenue targets. Nobody asks what it cost to generate that revenue. And the one person who might raise the question — usually someone in finance or analytics — gets told "we're a discount-heavy brand, that's our model."

Conversation over.

Here's an exercise most ecommerce brands have never done.

Take your repeat purchasers from the last 12 months. Split them into two groups: those who repurchased at full price or with a standard offer, and those who only repurchased after receiving a credit or a stacked discount.

Now compare the 12-month LTV of both groups.

At most brands I've worked with, the gap is staggering. Full-price repeat buyers have 2-3x the LTV of discount-driven repeat buyers. Not because they spend more per order. Because they keep buying without being bribed to come back.

Now look at the ratio. What percentage of your repeat purchases are discount-driven? If it's above 60%, your retention "strategy" isn't retaining customers. It's renting them. Every month you stop the credits, they stop buying.

That's not retention. That's a subscription to your own discount program.

This is the difference between retention that builds customer value and retention that subsidizes repeat purchases.

This is the part that hurts.

Every $10 credit you send teaches the customer something. Not consciously. But behaviorally. They learn that if they wait, a better offer comes. They learn that buying on day one is for suckers. They learn that your brand is worth exactly what the discount says it is.

Do this across 100K customers over two years and you haven't built a loyal base. You've built an audience that is conditioned to wait.

Then when you try to pull back — fewer credits, smaller discounts — repeat purchase rate drops and someone panics. "See? We need the discounts. We're a discount-heavy brand."

No. You built a discount-dependent customer base. That's not the same thing. One is a strategy. The other is a trap you walked into one campaign at a time.

The root cause is almost never the retention team. They're responding to incentives. They have revenue targets. Credits hit targets. So they send credits.

The root cause is structural.

Acquisition and retention don't share a pricing logic. Acquisition knows what offer brought the customer in. Retention doesn't use that information when deciding what to send next. The customer who bought at full price and the customer who bought at 40% off get the same post-purchase journey.

Acquisition and retention don't share a collection strategy. The products shown in acquisition ads are curated. The products shown in retention emails are often the full catalog or whatever merchandising pushed this week. The customer's first experience and second experience feel like two different brands.

Nobody owns the handoff. There's an acquisition team. There's a retention team. There's nobody whose job is the transition between them. That gap is where the discount spiral starts.

It's not "send fewer discounts." That's the surface-level answer that causes the panic.

It starts with connecting acquisition data to retention logic. If a customer was acquired at full price on a summer collection, their post-purchase flow shouldn't open with a $10 credit on clearance. It should continue the story that got them to buy in the first place.

Then it's segmenting retention offers by acquisition behavior. Not all customers need credits. The ones who bought at full price probably don't. The ones who came in on a deep discount might need a bridge offer, not a deeper one. Right now, most brands treat every repeat-purchase opportunity the same way. That's the leak.

Then it's measuring what matters. Not revenue from retention campaigns. Revenue per customer minus the cost of the offer that generated it. Net contribution margin by cohort. This is the report nobody pulls up. And it's the only one that tells you whether your retention program is building value or buying it.

I rebuilt this handoff at a multi-brand ecommerce group. Aligned pricing logic between acquisition and retention. Redesigned the post-purchase journey around how the customer actually experienced the brand. Result: 15-35% improvement in repeat purchase margin. Not from spending more. From stopping the spiral.

You know what the same effort applied to paid media gets you? Less than 8%.

That gap is the entire argument for why retention infrastructure matters more than another campaign.

Pull up your repeat purchasers from the last 6 months. What percentage repurchased without any discount or credit?

If you don't know that number, that's the problem.

If you know it and it's below 40%, your retention program isn't retaining. It's subsidizing.

Every quarter this disconnect stays in place, you're training another 30K customers that your brand is worth less than what you told them on day one.

"Discount-heavy brand" was never a strategy.

It was what happened while nobody was connecting the dots.

Best,
Muca