Discount to Signal Value and Serve the Emotional Job
Set a high list price to signal quality, then discount hard with urgency to let buyers complete an emotional job.
- Difficulty
- Easy
- Time to result
- ~weeks to results
- Steps
- 3
- Confidence
- 88%
For products with murky perceived value, a high list price signals quality while a steep discount makes the true price affordable. Abrams' deeper insight from Udemy: the real job-to-be-done is often emotional (feeling progress toward a goal), and the act of purchasing itself delivers that emotional payoff. A high-value item made cheap with urgency lets buyers complete that emotional journey repeatedly, driving strong retention even if they never fully use the product.
Origin
Archie Abrams on Udemy's early growth (2012+), where 90-99%-off course deals were a core differentiator; draws on Claude Hopkins' 'Scientific Advertising' first-principles copywriting.
Core principles
- 01Price signals quality when true value is murky or unknown
- 02High list price + steep discount reframes willingness to pay
- 03The core job is often emotional (feeling progress), not functional (using the product)
- 04The act of purchase can itself deliver the emotional payoff, enabling repeat buying
How to run it
- 1
Set a high list price to signal quality
Anchor with a high list price so the item is associated with premium value in a category where quality is hard to judge.
Pro tip Udemy listed courses near $100 to associate them with a college course.
- 2
Discount steeply to reset willingness to pay
Bring the price down dramatically (e.g. to ~$10, 90-99% off) so the effective price matches what buyers actually value it as.
Pro tip Buyers valued a course like a book (~$10), so the discount closed the willingness-to-pay gap.
Watch out Fire-sale discounts can look cheap; the anchor is what makes them read as value, not junk.
- 3
Identify and serve the emotional job with urgency
Recognize the aspirational/emotional job (feeling progress) and use urgency so the act of purchasing itself delivers that feeling, which buyers return to repeatedly.
Pro tip 'The act of purchasing a course or the act of buying a book is progress' - urgency lets people make that emotional journey.
Watch out Works when the emotional job is real; don't force it where the buyer only wants the functional outcome.
In the wild
Udemy anchored courses at ~$100 to signal college-course quality, then discounted to ~$10 with urgency; buyers got the emotional payoff of progress just from purchasing, which drove strong repeat retention.
→ Discounting became a core differentiator and growth lever behind Udemy's early success.
Common mistakes
Discounting without a quality anchor
A low price with no high list-price anchor reads as cheap/low-quality rather than high-value-made-affordable.
Assuming usage is the job
Optimizing only for course completion misses that the emotional job (feeling progress) is often what drives purchase and retention.
Is it for you?
Best for
Marketplaces and products with murky perceived value and an aspirational/emotional buying motive
Not ideal for
Commodity products with well-understood value where discounts just erode margin
From the transcript
“discounting has a really powerful effect on is it can signal value with a high list price but then bring something down to an affordable…”
“there's an emotional job that's even more important which is I'm feeling like I'm making progress in my educational journey and just the act of…”
“if you can make it very enticing very high value thing cheap urgency you can let people make that emotional journey by the act of…”
From the episode
Breaking the rules of growth: Why Shopify bans KPIs, optimizes for churn, prioritizes intuition, and builds toward a 100-year vision
Archie Abrams (VP Product, Head of Growth at Shopify)