Key takeaways
- Costco renews 93% of memberships and Chewy keeps an 80% repeat purchase rate, without flash sales or winback coupons.
- Costco replaces discounts with wins, a $1.50 hot dog and $300 a year in gas savings, so the $65 fee feels like a bargain.
- Every discount teaches customers that your full price is wrong, which trains impatience instead of rewarding loyalty.
Three brands. Three different categories. One thing in common:
They don’t need a flash sale to keep a customer.
No “20% off” welcome emails. No desperate winback coupons.
Yet, they have the highest retention numbers in their industries.
Costco: 93% membership renewal rate.
Chewy: 80% repeat purchase rate.
Red Bull: Premium pricing, unchanged for decades.
This is not luck.
It is a deliberate choice about the relationship they want.
What replaced the discount
Costco replaced the discount with a win.
The $1.50 hot dog.
The gas station saving you $300 a year.
The no-questions-asked return policy.
Every visit, the customer feels like they won.
The $65 annual fee doesn’t feel like a bill.
It feels like a bargain.
Chewy replaced the discount with humanity.
When a pet dies, a handwritten card arrives.
Sometimes flowers.
A full refund on unopened food, without being asked.
You don’t stay with Chewy because of the price.
You stay because no other brand has made you feel that remembered.
Red Bull replaced the discount with identity.
The F1 team. The athletes.
The world they built around a $3 can.
You don’t buy Red Bull because it is cheap.
You buy it because of what it says about you.
The truth about discounting
Here is the uncomfortable truth about discounting:
Every time you discount, you teach your customer that your full price is wrong.
You are not rewarding loyalty.
You are training impatience.
A different question
The brands that never discount have answered a different question.
Not how do we win the next order?
But how does our customer feel between orders?
That feeling is your retention strategy.
What does your brand offer when the discount runs out?
