How Smile Is Helping Brands Ditch Discounts and Build Healthier Businesses

Let’s be honest: most ecommerce brands lean hard on discounting. First-time popups. Holiday flash sales. Winback codes. But Smile CEO Mike Rossi thinks it’s time for a different approach—one focused on margin, not markdowns.

In a recent interview, Mike shared how top brands are using loyalty programs to shift away from transactional thinking and into something more sustainable. The big idea? Loyalty isn’t just about increasing LTV. It’s about creating healthier businesses.

Here’s what stood out.

1. Think Future-Focused, Not Flash Sale

When brands think of “retention,” they often go straight to discount codes or store wide sales. But here at Smile we think loyalty is about investing in future behavior, not rewarding one off actions. “You’re not discounting today—you’re discounting future orders.”

This mindset shift is huge. Instead of handing out 20% off codes, Smile powered brands offer points that build toward future perks. Customers still get rewarded but your margin stays intact.

2. Don’t Train People to Expect a Discount

If your brand’s first impression is a discount popup, what are you teaching your customers? “You’ve just discounted your brand 25% out of the gate.”

Not exactly the tone you want to set for your brand and a customer's first interaction with it. Instead, Smile encourages brands to start relationships with value. Show appreciation over time, not discounts on Day 1. You’ll attract better customers—and keep them longer.

3. Double Points > 25% Off

The power of points events. They create urgency, excitement, and engagement without discounting your brand. Think of it like a flash sale, but with none of the margin pain for your business. Instead of cutting prices for a weekend, brands offer double or triple points. Customers feel like they’re getting value. You keep your margins and it becomes a win-win.

4. Launch Quietly, Reward Loudly

You don’t need a big launch announcement or campaign for your loyalty program. In fact, Smile often recommends a soft rollout, especially for brands trying to reset customer expectations.

The first step is to identify your best customers and drop some unexpected value into their account. A few hundred points. Early VIP status. A thoughtful gesture to resonate with them.

 “A small airdrop to top customers sets the tone—it’s appreciation, not bribery.” This builds early goodwill and gives you valuable signals before scaling your program more broadly.

5. Ditch One-Size-Fits-All Rewards

Not every customer wants 10% off. Some want access. Others want exclusivity. Some just want to feel seen. That’s the beauty of loyalty programs done right, they let you tailor your value to what actually matters to your customers.

“You can offer rewards that barely cost you—but mean everything to them.” Exclusive product drops. Founder Q&As. Points-only merch. The best brands make loyalty feel personal, not like a formula.

6. Measure Campaigns in Margin, Not Just Revenue

Most marketers measure success by revenue. But Mike’s advice? “What if you looked at attributed margin instead of attributed value?” That 25% off flash sale might drive a spike in revenue, but how much did it actually cost you? A loyalty driven weekend campaign might generate less topline but it often brings in better profit.

And that’s what healthy growth really looks like.

7. Use Loyalty for Acquisition, Too

Smile isn’t just for retention, top brands are using loyalty in their acquisition flows. Running targeted ads that offer 2x points instead of 20% off. Not only does it attract customers who care about long-term value, it also sets expectations early. No discount code required.

“Loyalty isn’t just post-purchase. You can make it part of your first touch.”

8. Start Small, Learn Fast, Scale Smart

Before you go all-in, do some testing and learning. Run micro-campaigns. Try an airdrop to a small segment. Launch a double points weekend and see how customers respond.

When it works (it often does) you’ll have the confidence to roll out a full program that actually drives results.“The best brands we work with iterate like crazy in the first 6 months.” It’s not about perfection. It’s about progress. And loyalty is one of the most flexible, brand-aligned levers you’ve got.

Final Thought: Loyalty Is Appreciation, Not Just Retention

“Try to build a culture of appreciation, not just a habit of discounting.” Loyalty is one way to do that. If you’re not ready to launch a program today, the shift in thinking toward margin, relationship-building, and long-term health. It’s one worth making for your brand. 

When you invest in your customers, they tend to stick around. And when you stop giving away your margin? Your business tends to grow stronger.

Want more from Smile?

Explore how Smile helps 100,000+ brands build sustainable growth through loyalty, community, and customer love.