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The Cost of Free Doughnuts: 70 Years of Regret

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Re: The Cost of Free Doughnuts: 70 Years of Regret

#121

Post by et-al »

marcosdumay wrote: post #77
socketnaut wrote: post #25

Earlier quoted context omitted.

Because most people search fares online and book the cheapest ticket.

That actually does not disprove the GP's point. People do this when the price difference is too high, or when they don't know of any difference of value on both options. Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest (even then, the flight schedule matters). That is not reason for a company to n…

> Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other

Southwest has a pretty loyal following since you can "refund" a ticket for Southwest credit good for a year.

Alaska and Delta don't charge for bike fees (they're just priced like ordinary luggage).

And aside from maybe 1K members, I don't know anyone who enjoys flying United.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#122

Post by LukeShu »

RandallBrown wrote: post #13
blakesterz wrote: post #8

I witnessed something like this when I worked at a Six Flags amusement park (wasn't 6F at the time) that had a decent size water park. They did exit surveys every night, asking as many people as they could if things were ok, and one year they also asked people "Would you pay extra for the water park", it was free as part of admission. So they wanted to know if people would pay extra. People said yes. Something like 9…

A park in Indiana, Holiday World, did something sorta the opposite. They figured out how much the average guest paid for drinks, then raised the ticket prices that much but made all drinks free in the park. It was a huge success. People expect ticket prices to go up occasionally and they expect to be gouged for drinks. By getting "free" drinks, it felt like a huge value. (At least for me when I visited.) I bet it mad…

Growing up in Indiana: I don't remember much about different theme parks, but I remember that I'd always end the day dehydrated and thirsty--but not at Holiday World. And regardless of the actual amount of money, as a kid it removed friction from getting a drink, I didn't have to go ask my parents for money. (Just drink for free from the water fountain! Sure, maybe as an adult, but it's definitely easier for kid-me to drink a yummy sugary beverage than water.) And that contributed to having a better time there.

And so we went to Holiday World way more often than King's Island, which was almost an hour closer to us (maybe Holiday World was just a better park too, maybe not--like I said, I don't actually remember much about various parks).

Re: The Cost of Free Doughnuts: 70 Years of Regret

#123

Post by freeone3000 »

Jommi wrote: post #80
marcosdumay wrote: post #77

Earlier quoted context omitted.

That actually does not disprove the GP's point. People do this when the price difference is too high, or when they don't know of any difference of value on both options. Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest (even then, the flight schedule matters). That is not reason for a company to n…

>Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest Where are you getting this? Tons of airlines provide varying levels of service/amenities. Only thing that is homogeneous is that you get from A to B. I think you are onto something there, but you should have phrased it another way. E.g. I think air…

Getting from A to B is the most important service an airline provides. The seats are always cramped, so the degree doesn't matter terribly. Even on their website, I can't search by "flight has power outlets". Nor is the wifi speed available, or even consistent. Maybe the problem is that airlines don't have a value prop relative to each other at all.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#124

Post by crankylinuxuser »

monadic2 wrote: post #101
tomjakubowski wrote: post #68

Earlier quoted context omitted.

In general for SaaS, does it make sense to let customers choose between two (or more) pricing models, depending on their needs? Does this cause too much complication for the business? Curious why I haven't noticed schemes like this, other than at "enterprise" tiers where the customer is paying a lot for something closer to a custom solution and prices are negotiated.

I am quite curious why business plans themselves are not generally subject to a/b testing....

That would allow the thought the upper executives aren't infallible. An upper exec can never show vulnerability, especially to something like a business plan.

And that has ripple effects if they deal with vulture capitalists as well.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#125

Post by hhmc »

ChuckMcM wrote: post #117

This is a good cautionary tale and one I've seen played out in the tech industry with food. Even in the 80's it wasn't uncommon for a tech company to have a "beer bust" on Friday's where drinks and snacks were served as a social gathering for employees at the end of the work week. It was a turning point in employee relations when the VP of HR at Sun cancelled the weekly beer bust. Similarly at Google when they decide…

Your comment about the hidden impact of cancelling snacks reminds me of this article: https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...

Re: The Cost of Free Doughnuts: 70 Years of Regret

#126

Post by dahart »

klmadfejno wrote: post #93
RandallBrown wrote: post #13

Earlier quoted context omitted.

A park in Indiana, Holiday World, did something sorta the opposite. They figured out how much the average guest paid for drinks, then raised the ticket prices that much but made all drinks free in the park. It was a huge success. People expect ticket prices to go up occasionally and they expect to be gouged for drinks. By getting "free" drinks, it felt like a huge value. (At least for me when I visited.) I bet it mad…

By what metric was it a success? Drinks, even non alcoholic ones, have phenomenal margins, and if you're stuck in a theme park or sports stadium, for hours, you basically have to purchase one. I'm a bit surprised this makes financial sense unless they really went for it. For similar reasons, restaurants are hurting extra hard right now because people don't order drinks as often with delivery or takeout.

It’s a success if more people show up. You’ve heard of sales, promotions, and loss leaders? Having good margins on drinks doesn’t mean it’s more profitable overall to charge for them, when having more people there means they’ll purchase more tickets, more food, and more souvenirs. Plus offsetting the ticket price by the retail price of a drink is likely to mean the move was instantly financially profitable, by getting 100% of people to “pay” for the drink, where before not everyone might.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#128

Post by bryanrasmussen »

tomjakubowski wrote: post #68
013a wrote: post #57

I can call out one example of a poorly executed price raise: Apollo Engine ( https://www.apollographql.com/pricing ) There was a time when they charged for data points/performance traces ingested into the system. At our scale, we were paying around $100/month. We were prepared to scale that to their, I think it was, $550/month plan when our usage got that high. They relatively recently changed their structure to char…

In general for SaaS, does it make sense to let customers choose between two (or more) pricing models, depending on their needs? Does this cause too much complication for the business? Curious why I haven't noticed schemes like this, other than at "enterprise" tiers where the customer is paying a lot for something closer to a custom solution and prices are negotiated.

I think the current thinking is that you should keep your price down to 3 levels (but the same model) to keep it in one easy to read line on your landing page / price page so that potential customers will not be confused.

If you give them multiple models and ways to do things then they will have to think over what is right for them, and someone thinking over it might decide not to go with you.

On the one hand I can see the point, I hate to think too much over things. But I also hate how often products don't have a reasonable model for my use case.

Re: The Cost of Free Doughnuts: 70 Years of Regret

#129

Post by jrs95 »

Zenbit_UX wrote: post #89
karaterobot wrote: post #69

I didn't know about the Red Cross and its donuts. The example I've always used for this is helping a friend move. If the friend asks "hey, will you help me move? I'm buying pizza and beer afterwards!" I will more than likely say yes, even though I can buy my own pizza and beer. If they instead say "hey, will you help me move? I'll pay you $21.58 for your time," I'd probably bristle. Even though that might be the equi…

You got weird friends, no one's ever had to ask or bribe me, I would just offer to help. In turn I'd also be uncomfortable asking others to do manual labor for me, if they didn't offer when I said I was moving I wouldn't ask. Buying them supper after would be a given, no bribe required.

I think the idea is partly "I could use some help with this, but I'll get some food and drinks and we'll try to hang out and have a good time even though the work part sucks"

Re: The Cost of Free Doughnuts: 70 Years of Regret

#130

Post by crankylinuxuser »

ashtonkem wrote: post #104
Zenbit_UX wrote: post #89

Earlier quoted context omitted.

You got weird friends, no one's ever had to ask or bribe me, I would just offer to help. In turn I'd also be uncomfortable asking others to do manual labor for me, if they didn't offer when I said I was moving I wouldn't ask. Buying them supper after would be a given, no bribe required.

“I’ll buy you pizza for helping me move” is an extremely common social interaction, to the point of being a trope. It’s not a bribe, it’s an acknowledgement that helping somebody move is a huge amount of work and some token of appreciation is wise. GP doesn’t have weird friends.

Sitting down and having a meal is breaking bread with friends. Thats always more than a simple financial transaction of $20 or so.

There was an article that time is our most important resource... Having a meal with someone is giving your most important resource to them, and them to you.

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