4 ms·

> The best customer is one that comes in and says "I want this item, I will pay a reasonable price right now and walk out a happy customer" These customers are

> The best customer is one that comes in and says "I want this item, I will pay a reasonable price right now and walk out a happy customer" These customers are not price sensitive. So you do not want to give them the best deal. Instead the profit maximizing technique is to find customer who won’t pay your “reasonable price” but will pay some smaller amount. You make them jump through hoops so you don’t cannibalize your “reasonable customer” sales. When done right every customer is paying what they consider “reasonable”. For some that is more money than others.

maerF0x0 7y ago
But why waste everyone's time with all that noise? The scarcity of the coupon diminishes the discount and wastes real people's lives on triviality. I'd rather maximize profit by delivering more to my customers, not by extracting more for the same.
- scott_s 7y ago
  Coupons are typically for low-margin goods, such as groceries. There's not much "more" to deliver. And companies do it because they tend to get more profit than if they didn't do it.
  - maerF0x0 7y ago
    There's tons more to deliver and companies are innovating in the space. For example those prepared dinners you still cook fresh, impossibly meatless meat, delivery instead of shop yourself, direct farm to consumer (powered by ecommerce)
    - scott_s 7y ago
      That's a different product than a can of corn, which you can sometimes find a coupon for.
      - Marsymars 7y ago
        Though I've never seen a coupon for say, a fresh head of broccoli.
    - vkou 7y ago
      Which are all luxury upsells on life-ncessary goods, that the 90% of the population can't, or doesn't want to waste money on. Coupons and similar time-wasters optimize the revenue that you get from that 90%.
- lmm 7y ago
  What do you do once you're a mature, commoditized company with no room left to innovate? Maybe you wouldn't try to milk your customers for as much as they're worth, but you'll eventually retire sell your company to the highest bidder, who probably will.
  - danShumway 7y ago
    This is exactly why consumers need ways to subvert and compete with markets beyond just making individual purchasing decisions. Without a continual pressure in the opposite direction, markets will eventually optimize to be the most exploitative version of themselves that they can be. When people look at capitalism as a competitive system between multiple businesses, they're looking at an incomplete, broken system. Capitalism should be seen as a competitive system between (at least) businesses and consumers. Open Source is one way that consumers are able to place competitive pressure on the software industry without starting their own businesses. Open Source products are available for free, often developed at a loss, and they subvert the expectation that software features have to be profitable to exist. Businesses are forced to compete with free, which forces them to implement consumer-friendly features that wouldn't otherwise be profitable. Adblocking is another important force dictating online content rules -- it allows customers to directly reject a business model, by subverting the idea that profitable content can be forcibly bundled with unprofitable content. Then you have more grey-market pressures like piracy, which forces companies to compete on delivery mechanisms and not just on content. This kind of subversion helps commoditize content, making it difficult for industries to monetize products that they'd otherwise tightly control. Industries describe this as a bad thing -- if a business model isn't profitable and if creators aren't making money, then something's wrong. But this is consumers doing what they're supposed to do. It is good for consumers to compete by circumventing business models. In this case, what we'd like to see is consumers colluding to share coupons and deals, so everyone can get the best price. We want to force sellers to negotiate with consumers as a single group, not with each individual person. To a certain extent, we are seeing this, which is why you see certain businesses getting more aggressive about hiding their charges and making coupons harder to share.
hdfbdtbcdg 7y ago
Except that some like me will just not bother buying from you at all.
- jdsully 7y ago
  If done right you won’t even know its happening. The best companies setup entirely different brands to segment the market.
rebuilder 7y ago
Maybe. I just spent a month trying to buy (not all of that time, obviously) two articles of clothing. I had fairly specific criteria ( black, hoodie + joggers, zipper on hoodie, thick and soft material on both), which most stores could not fulfil. It was strange. Major sportswear brands make the items I want. I have the money. I'm willing to pay, frankly, much more than the product is worth for most people. But the issue seems to be, somehow, retailers do not stock enough of the kinds of things I want that I could actually buy them. IOW, the maths of supply and demand seems to be a bit more complicated than one might expect.

maerF0x0 7y ago

But why waste everyone's time with all that noise? The scarcity of the coupon diminishes the discount and wastes real people's lives on triviality. I'd rather maximize profit by delivering more to my customers, not by extracting more for the same.

scott_s 7y ago
Coupons are typically for low-margin goods, such as groceries. There's not much "more" to deliver. And companies do it because they tend to get more profit than if they didn't do it.
- maerF0x0 7y ago
  There's tons more to deliver and companies are innovating in the space. For example those prepared dinners you still cook fresh, impossibly meatless meat, delivery instead of shop yourself, direct farm to consumer (powered by ecommerce)
  - scott_s 7y ago
    That's a different product than a can of corn, which you can sometimes find a coupon for.
    - Marsymars 7y ago
      Though I've never seen a coupon for say, a fresh head of broccoli.
  - vkou 7y ago
    Which are all luxury upsells on life-ncessary goods, that the 90% of the population can't, or doesn't want to waste money on. Coupons and similar time-wasters optimize the revenue that you get from that 90%.
lmm 7y ago
What do you do once you're a mature, commoditized company with no room left to innovate? Maybe you wouldn't try to milk your customers for as much as they're worth, but you'll eventually retire sell your company to the highest bidder, who probably will.
- danShumway 7y ago
  This is exactly why consumers need ways to subvert and compete with markets beyond just making individual purchasing decisions. Without a continual pressure in the opposite direction, markets will eventually optimize to be the most exploitative version of themselves that they can be. When people look at capitalism as a competitive system between multiple businesses, they're looking at an incomplete, broken system. Capitalism should be seen as a competitive system between (at least) businesses and consumers. Open Source is one way that consumers are able to place competitive pressure on the software industry without starting their own businesses. Open Source products are available for free, often developed at a loss, and they subvert the expectation that software features have to be profitable to exist. Businesses are forced to compete with free, which forces them to implement consumer-friendly features that wouldn't otherwise be profitable. Adblocking is another important force dictating online content rules -- it allows customers to directly reject a business model, by subverting the idea that profitable content can be forcibly bundled with unprofitable content. Then you have more grey-market pressures like piracy, which forces companies to compete on delivery mechanisms and not just on content. This kind of subversion helps commoditize content, making it difficult for industries to monetize products that they'd otherwise tightly control. Industries describe this as a bad thing -- if a business model isn't profitable and if creators aren't making money, then something's wrong. But this is consumers doing what they're supposed to do. It is good for consumers to compete by circumventing business models. In this case, what we'd like to see is consumers colluding to share coupons and deals, so everyone can get the best price. We want to force sellers to negotiate with consumers as a single group, not with each individual person. To a certain extent, we are seeing this, which is why you see certain businesses getting more aggressive about hiding their charges and making coupons harder to share.

hdfbdtbcdg 7y ago

Except that some like me will just not bother buying from you at all.

jdsully 7y ago
If done right you won’t even know its happening. The best companies setup entirely different brands to segment the market.

rebuilder 7y ago

Maybe. I just spent a month trying to buy (not all of that time, obviously) two articles of clothing. I had fairly specific criteria ( black, hoodie + joggers, zipper on hoodie, thick and soft material on both), which most stores could not fulfil. It was strange. Major sportswear brands make the items I want. I have the money. I'm willing to pay, frankly, much more than the product is worth for most people. But the issue seems to be, somehow, retailers do not stock enough of the kinds of things I want that I could actually buy them. IOW, the maths of supply and demand seems to be a bit more complicated than one might expect.