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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

#151

Post by a_c_s »

save_ferris wrote: post #23
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…

Ive been saying for years that airlines should do this. Add the price of an alcoholic beverage to everyone's ticket and then give those who want one a "free" drink. I never understood why they opted to go with ruthless cuts and declining customer experience.

As someone who doesn't drink alcohol it drives me crazy when the only option is to subsidize other's alcohol (because alcohol is marked up so heavily).

For people like me a paid-alcohol policy is a feature, not a bug.

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

#152

Post by user5994461 »

TAForObvReasons wrote: post #81
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.

It makes sense for the pricing to be aligned with what the users perceive as their usage/value. In any other shape, customers can and will adjust their usage or switch to something else. When you start selling per-seat licenses, everyone is incentivized to reshape usage so that only one seat is needed. That one seat is used by a team member who becomes the internal expert on the service, while everyone else turns to…

And the product is cancelled once the employee leaves or transfers to another team.

Assuming the employee doesn't decide to abandon the product first, because who wants to be the only person on a tool that can't be used by any of your teammates or interns.

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

#153

Post by greedo »

vorpalhex wrote: post #31
save_ferris wrote: post #23

Earlier quoted context omitted.

Ive been saying for years that airlines should do this. Add the price of an alcoholic beverage to everyone's ticket and then give those who want one a "free" drink. I never understood why they opted to go with ruthless cuts and declining customer experience.

Many people want the absolute cheapest ticket because having an expensive ticket doesn't really improve your life at all, at least on domestic flights.

I'm tall, so more legroom is essential when I fly. That means I usually need to upgrade (if I can't swing an exit row seat). So yes, an expensive ticket really does improve my life, for a short period of time.

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

#154

Post by curryst »

crankylinuxuser wrote: post #134
gav wrote: post #119

Earlier quoted context omitted.

I've been on both sides so I understand your perspective. Everyone wants to sell on _value_ and in an ideal world you could go up the food chain and say, "hey, if we spend $10,000 on this, we save $100,000 in employee hours". That should be the easiest decision in the world, especially if you could come back in a year and figure out it was really $105,000. However budgeting in just about any organization I've been in…

> However budgeting in just about any organization I've been involved in doesn't work like that. You ask for $10,000 and there's no budget for it. Even if there is, there's no guarantee that next year you're not going to have to "tighten belts" and "sharpen pencils". So.. a bigger question. Why doesn't budgeting work like this?

The time savings is theoretical.

If the employees that you saved time from are hourly, you can just cut some hours and probably save money. Although you have to offset that with reduced morale if you cut employees/hours.

If you're saving time for salaried employees, you probably can't just cut hours. Now you have 1,000 spare man-hours this year, what do you do with them? If you saved 1000 employees the same amount of time per day, each of them has an extra 13.7 seconds per work day. A basically useless amount of time. If you freed up that time from only 100 employees, each gets an extra 20 minutes a day, which is an actually useful amount of time, almost 2 extra hours a week.

Assuming that you have saved a significant enough amount of time per employee, then the question becomes do you actually have productive work for them to do? You only saved money if you were going to hire people that you no longer have to hire, if those employees can create something with that spare time that generates revenue, or if you saved enough time that you can fire employee/s.

It's the same concept as discounts. Yes, discounts can save you money, but only if it was something you were going to buy anyways. It's like buying a new phone because it's 20% off. If your old phone was on it's last leg or you were going to buy one anyways, you saved 20%, yay. If you have a brand new flagship phone and you buy a new one just because it's 20% off, you haven't actually saved anything.

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

#155

Post by hadlock »

manuel_w wrote: post #71

It is interesting to me how much free givaways people get in America. In Austria (and maybe some other parts of Europe, not sure), not only that free refills are unheard of, you even get charged for ketchup sauce at McDonalds. (The minimal allowed food quality is higher, though, so there might be economic reasons on top of, I believe, primarily societal reasons.) It is charged somewhere around 40 to 50 Eurocent per 2…

Free condiments etc are free in the suburbs but urban/urbifying places will typically restrict you to X packets per Y possibly as a cost cutting measure. I would guess that the packets cost $0.10 or more each. 10 ketchup packets might cost the restaurant as much as the profit margin on a medium fries.

Soda refills are almost free, the cup costs more than the soda, so besides avoiding an obesity epidemic, the customer satisfaction of giving free refills is probably worth it. Also it probably costs more to pay someone $15/hr to just fill sodas, when you can get the customers to self-service for free.

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

#156

Post by mormegil »

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…

Also, there is this case of a daycare center which started to collect fines for late child pickups. The result? The rate of late pickups increased. Picking the child late stopped being a shameful thing to do, causing the poor worker to wait for you, it started being a normal paid service you could use every time you wanted. https://freakonomics.com/2013/10/23/what-makes-people-do-wha...

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

#157

Post by drewcoo »

It's not about "used to be free." The Red Cross regularly shows up wherever there are people in need and charges them for things of negligible value. Years ago I was in a natural disaster where the power was out. The Salvation Army was handing out free blankets and hot meals but the Red Cross was charging for cups of coffee.

They are still like that to this day. No deep historical knowledge required.

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

#158

Post by DoreenMichele »

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 make me think of some study that concluded "Pay enough (market rate) or pay nothing." People who will do volunteer work for an organization because they believe in the mission will walk away and cuss you if you offer them 5 cents an hour for the same work because it's all you can afford to pay.

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

#159

Post by [deleted] »

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…

[deleted]

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

#160

Post by 0xy »

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…

Their enterprise pricing is disgustingly grandiose. At our relatively small scale (just a few tens of millions of requests per month) they wanted five figures a month after the price change.

Nope. We'll just roll our own solution.

Whichever sales and marketing guy is responsible for that atrocious pricing will ultimately be responsible for the product failing. I don't know who's going to pay those absurd prices.

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