The Discount Token model does not merely reduce retention cost (which it can do), rather if done well it significantly reduces CAC (customer Acquisition Cost), one of the key components of SaaS economics. An upfront discount to use a service is a marketing expense, and could also be classifed as a ‘cost of sale’. Reducing operating margin slightly for a customer who may be with you for 10 years is a small cost to pay compared to the opportunity cost of trying to win over a customer that never converts.