The value of identity discounts

Although retailers may mark down prices on products to move stagnant inventory or drive year-end sales revenue, sale prices can also reduce the overall value of the brand. Harbert researcher Heath McCullough says the harm to a brand can be measurably reduced by offering identity discounts—special pricing to customers based on their membership in a specific group.

“Unlike loyalty program discounts or targeted promotions, identity discounts appeal to consumers by incorporating intrinsic aspects of their self-concept, such as their status as veterans, students or senior citizens,” said McCullough, an associate professor in the Department of Marketing.

For identity discounts to work, he recommends marketers understand a customer’s self-image, or how they want to be seen and identified. The discount then rewards the customer for qualities and achievements they value most.

McCullough’s insights come from research he conducted with marketing faculty colleagues Alex Ricardo Zablah at the University of Tennessee  and Leah Warfield Smith at the University of Arkansas. Their work was published in Journal of Retailing in June 2025.

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Read more about McCullough’s research in the story, “Identifying a desired value,” published in the Fall 2025 issue of Harbert Magazine..