Managing Promotional Offers and Finding the Equilibrium

Do you need deeply discounted offers to get consumers to buy? Deep offers have two big negatives: First, you have the margin hit of giving deep discounts. Second, you train customers to wait because they know the deep discount is coming. One alternative is to wean your customers off of waiting for the big offer by giving them a series of much smaller discounts so that they learn to expect frequent but not such dramatic discounts.