The Black Friday Paradox: Why Competing On Price Lets Your Competition Win
How playing the price game transfers equity to category owners, and what do to about it
The Anxiety of Black Friday
Your inbox knows your competitive position better than your strategy deck does.
On Black Friday, it fills with the same flood everyone else receives.
Percentage-off subject lines. Flash sale countdowns. “Don’t miss out” from brands you forgot you subscribed to.
Some of those emails came from companies you buy from. Some came from their competitors. And buried in that noise was a signal most people miss:
The companies competing hardest on price let their competition win.
How? They’re paying strategic rent to category owners.
Every dollar spent acquiring price-sensitive customers builds competitive advantage for whoever owns the low-cost position. Every discount proves you’re operating on rented territory—competing on variables someone else controls.
The paradox isn’t that discounting doesn’t work. It’s that it works perfectly—for the low-cost leader.
If that’s you, discount away.
If it’s not, you’re paying rent through your promotions while they collect the equity.
And What’s Worse: You Already Know This
You’ve sat in the meeting where someone floated the discount idea. You’ve felt the gravitational pull of “but our competitors are...” You’ve watched the Slack threads where urgency overtakes strategy.
Maybe you held the line. Maybe leadership killed the proposal. Maybe margin math saved you from yourself.
But the pressure existed. And that pressure is the tell.
Because the problem isn’t the discount decision. The problem is that competitor pricing registered as threat instead of noise. The comparison felt relevant. The urge was real.
Those Slack debates? That coordination overhead? That’s what paying strategic rent looks like from inside the building.
You’re not failing at discipline. You’re succeeding at responding rationally to a game someone else designed—on territory they control.
But Some Companies Felt None of That Pressure
Not because they have better brand guidelines. Not because they’re playing some premium positioning game that only works at Apple scale.
Because the comparison didn’t connect.
A nonprofit executive director I worked with discovered this by accident. For years, the wrong funders kept showing up. Their free services attracted charity-seekers instead of advocacy partners. Every fundraising event fell flat: strong attendance, but donors who disappeared the moment the event ended.
The obvious move was to discount harder. Match what other nonprofits offered. Make services even more accessible to compete for the same pool of charitable dollars.
That’s what operating on rented territory looks like. Competing on variables—”free services,” “accessibility”—that someone else established as what matters in the nonprofit space.
Instead, they stopped renting and began owning territory they defined.
They repositioned around disability rights advocacy—not charity, but empowerment. Higher barriers to entry. Clearer expectations about what participation meant. A transformation story that wasn’t about helping people, but about changing systems.
Fundraising donations nearly doubled. Not because they made it easier to attend, but because they made it clearer what attending meant.
And when other nonprofits offered free services, there was no longer an urge to match. No internal debate. No pressure. No coordination overhead.
Because they weren’t operating on rented territory anymore. They’d claimed their own ground.
Why Owners Don’t Feel Black Friday Pressure
Owned territory and rented territory follow different economics.
Owned territory means you’re competing on a transformation only you can deliver. The variables that matter—the story, the customer change, the outcome—are ones you defined.
And as an owner, you set the terms.
Rented territory means you’re competing on variables someone else controls. Price. Speed. Features. Convenience. These feel like universal competitive dimensions, but they’re territory where the category owner has structural advantage.
Competing on those variables, you’re paying rent through every competitive move you make on their terms.
Price competition is the clearest example. On rented territory, competitor pricing changes register as threat. The coordination overhead compounds—meetings about meetings, sales pushing for deeper discounts, and margin evaporating.
That overhead? That’s the rent payment.
Owned territory changes the economics. Discounts become tactical—inventory management, acquisition experiments—not existential. The promotion doesn’t threaten your position because price isn’t the variable your transformation depends on. No rent to pay because you own the ground.
Which brings us to a question worth sitting with.
Do You Own Your Market—Or Just Renting?
Black Friday sorts companies into three categories:
Renters who don’t know they’re renting. Competitor pricing registers as threat. The response feels necessary. Match the deal, run the promotion, stay competitive. The urgency was real because on rented territory, opting out of the price game feels like surrendering market share. They’re renting their position and the landlord just raised the rent—and they can’t see the transfer happening.
Renters who know they’re renting. The urge to discount was there. Competitor promotions created internal debate. Maybe you hold the line, or brand guidelines prevented the response, or margin math killed the proposal. But the pressure existed. That coordination overhead—those endless meetings, those Slack debates—that’s what strategic rent looks like from inside. Knowing you’re on rented ground doesn’t make it owned ground. It just means you see the rent bill clearly.
Owners. No pressure felt. Not because of discipline or premium positioning mythology. Because the comparison didn’t connect. Customers coming for this transformation aren’t cross-shopping on price with those alternatives. The inbox flood was noise from a different conversation.
Resisting the urge doesn’t make you an Owner. It makes you a Renter with good instincts. The foundation gap still exists. You’re still competing on territory where price is a variable that matters—you just didn’t act on it this time.
The diagnostic signal isn’t the discount decision. It’s the urge.
For Renters of both kinds, here’s what happened when you felt that pressure...
Who Really Benefits When You Discount
When you compete on price, you’re not just making a tactical decision. You’re signing a lease on territory you don’t own.
And here’s exactly where your rent payments go:
First payment: You attract price-optimizing customers—and give away pricing equity. You can own a stock. You can own a house. You can also own a price point—where the market expects you to charge, where your value positioning holds. When you discount, you’re not borrowing against that equity. You’re transferring it.
These aren’t bad people—they’re rational actors responding to the signal you sent. You told them price matters here, and they believed you. The customer who paid full price last quarter now questions whether your product was worth it. The prospect who would have converted at your stated value now waits for the sale. They’re loyal to the deal pattern, not to you.
And here’s the brutal part: getting that equity back is like trying to repurchase stock you sold at a discount. The market remembers what you were willing to accept. That’s not customer acquisition. That’s building a customer base for whoever can sustain the lowest price long-term. Usually not you.
Second payment: You train your existing customers to wait. The customer who would have bought Tuesday now waits for Thursday’s sale. The customer who paid full price last quarter wonders if they overpaid. Promotions don’t just acquire new customers—they retrain current ones to optimize against you. This compounds. Each discount cycle makes the next one more necessary because you’ve trained margin erosion into customer behavior.
Third payment: You prove you’ll move on price under pressure. Competitors now know competitive pricing registers as threat in your building. That information has strategic value—they know your vulnerability, your constraints, your coordination patterns. For everyone except you.
Fourth payment: You fund the infrastructure that makes escape harder. AI shopping assistants, price comparison platforms, deal aggregation tools—all optimizing for lowest price. These platforms don’t just surface deals. They train deal-seeking as the default customer behavior. You’re not just competing on rented territory. You’re funding the infrastructure that makes the category owner’s position harder to challenge.
Groupon made this visible at scale. Small businesses paid to acquire customers through the platform. They thought they were buying customer acquisition. They were actually funding Groupon’s customer education program—and paying rent to do it.
The deal-seekers Groupon delivered weren’t becoming loyal customers of local businesses. They were becoming loyal customers of deal-seeking behavior. Building equity for whoever could sustain the lowest price long-term.
And when Groupon’s economics stopped working, those customers didn’t convert to regular patrons. They moved to the next deal platform. The behavior pattern had been installed—just not for the businesses who paid for it.
Deal-seekers churn at 3–5x higher rates for a reason: the discount doesn’t just attract price-sensitive customers—it trains churn behavior into your customer base. You’re not selecting for buyers. You’re building competitive advantage for category owners while paying coordination overhead to do it.
Every rent payment compounds. The first discount creates the comparison. The second validates the pattern. The third makes it your operating system.
Price Isn’t The Only Ground You’re Renting
Price is the clearest example of rented territory because the mechanism is visible. But it’s not the only ground you’re renting.
Rented territory is ANY competitive variable someone else defined as “what matters in this category.”
Features. Competing on who has the longest feature list. Rented from whoever had resources to build the most. Every feature you add to match competitors validates that feature count is how customers should evaluate you. The game rewards whoever can sustain the highest build velocity—probably not you. Every sprint spent on feature parity is a rent payment to category owners who defined “comprehensive feature set” as the winning variable.
Speed. Competing on fastest delivery, quickest implementation, shortest sales cycle. Rented from whoever optimized operations first. Every speed improvement you make to match competitors proves that speed is the decision variable. The game rewards whoever has the best logistics infrastructure or lowest operational friction. Every operations optimization chasing their timeline is strategic rent paid to whoever owns the speed position.
I worked with a battery startup stuck in this trap. Brilliant engineers. Superior technology. They could out-spec every competitor in the electrification space.
And customers didn’t care.
They were competing on rented territory—features—in a game designed by established engineering firms. The comparison rewarded whoever had the deepest technical heritage. Every technical specification they added to match competitors was a rent payment. Every engineering sprint chasing feature parity built equity for the firms who owned “technical sophistication” as the category variable.
Once you compete on rented variables, the pattern is predictable: a competitor launches more features and you feel pressure to match; a competitor cuts delivery time and you scramble to respond. The variable doesn’t matter. The response pattern does. And that response pattern is how you pay rent.
The diagnosis was immediate: “Stop paying rent and define territory you can own. What transformation do YOUR customers actually need that your technology enables?”
The answer wasn’t “better batteries.” It was “faster electrification deployment with less integration risk.”
Owned territory. Variables they defined. And once that territory was clear, technical specifications became evidence of the transformation—not the variable customers used to judge them. No more rent payments because they weren’t competing on someone else’s terms.
Price is just the most expensive way to rent territory you don’t own. Whether you’re competing on price, features, or technical specs—once the pattern starts, the same compounding trap emerges. Every competitive response is a rent payment. Every coordination meeting debating how to match is overhead you’re paying to operate on someone else’s ground.
Which brings us back to Black Friday.
What The Inbox Revealed
Black Friday doesn’t create your competitive position. It reveals it.
The inbox flood, the discount pressure, the urge to match competitor pricing—these weren’t external forces. They were diagnostic signals showing where your strategy actually lives.
And here’s what that signal means for what comes next:
If you’re a Renter who doesn’t know you’re renting, every strategic decision you make optimizes for rented ground. Your marketing builds equity for category leaders. Your sales conversations validate competitor framing. Your product roadmap responds to variables someone else defined. You’re paying rent through every function—and the coordination overhead compounds as teams debate how to compete on territory you don’t control.
The inbox pressure wasn’t a Black Friday problem. It was a strategy problem that Black Friday makes visible.
If you’re a Renter who knows you’re renting, discipline held the line this quarter—but the pressure will return. Next promotion cycle, next competitive launch, next economic squeeze. Knowing you’re on rented ground doesn’t make it owned ground. It just means you see the rent bill clearly. The strategic debates will keep consuming leadership bandwidth. The rent keeps coming due.
If you’re an Owner, this piece was confirmation, not revelation. Keep building.
The path from Renter to Owner isn’t about better discipline or stronger brand guidelines. It’s about changing what your organization competes on—which variables matter, which customers you’re transforming, which territory you’re claiming.
And here’s what operating on rented territory actually costs you:
Your marketing pays rent through every campaign. Every message proves that price matters. Every promotion trains customers to shop on variables the category leader controls. You’re not building brand value—you’re building their category position.
Your product roadmap pays rent through every sprint. Features get prioritized based on competitive matching, not customer transformation. Speed improvements chase what others established as table stakes. Your engineering capacity builds parity, not differentiation.
Your sales conversations pay rent through every pitch. When price comes up, you defend your position relative to alternatives. When features get compared, you explain why you’re competitive. When speed matters, you prove you can match their timeline. Every conversation happening on their terms is a conversation where you’re not claiming owned territory.
The coordination overhead you’re experiencing? That’s what paying strategic rent looks like from inside the building. And it compounds with every cycle.
Most companies can’t see this clearly from inside. Not because the concept is complex—because seeing your own competitive position is like reading the label from inside the bottle.
Watch what happens in your next competitive decision.
Not the decision itself—the pattern that precedes it.
If the conversation starts with ‘What are they doing?’ you’re on rented ground. The question itself is the tell.
Owned territory starts with different questions: ‘What transformation are we creating?’ ‘What customer change matters here?’ ‘What variables do we define?’
The rent payment isn’t the discount. It’s the meeting about the discount. The coordination overhead. The gravitational pull of comparison.
That overhead compounds. And the category owner collects the equity while you pay the rent.