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The worst users come from referral programs, free trials, coupons

andrewchen.com

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Re: The worst users come from referral programs, free trials, coupons

#31

Post by dazc »

cpach wrote: post #24
dazc wrote: post #9

Earlier quoted context omitted.

I once did a free gig for a neighbouring business, that was a lesson for me and not one I intend to repeat.

What happened?

Turned out to be a huge waste of time and if I had actually billed them it would have been such a high sum that they would never be able to pay me anyway.

For example, several meetings in the local coffee shop where subjects covered could be done within an email. They once arranged a meet with their database guy so we could discuss how it would be stored and accessed etc? Both looked at each other as if to say wtf are we doing here?

The lesson for me is that if you don't value your time then no one else will.

Re: The worst users come from referral programs, free trials, coupons

#32

Post by red_admiral »

dazc wrote: post #6

Recent example, a piece of furniture costing over £3k and I can get 10% off if I sign-up to their newsletter. As someone who works in retail marketing, this is a guaranteed way to ensure I don't spend a penny in your store.

If I wanted that product anyway, I'd sign up with my other email address I use when something looks spammy, and take the £300 discount.

Re: The worst users come from referral programs, free trials, coupons

#33

Post by steveBK123 »

forsyth2024 wrote: post #20

For the most part, it doesn’t sound like these “bad” customers are doing anything illegal or in violation of TOS. They’re just exploiting offerings for something they wouldn’t normally spend any money on. To be surprised that they don’t stick around long or spend as much as non-incentivized customers shouldn’t come as a surprise to anyone and shouldn’t be seen as some kind of failing. They would not normally have use…

It's less a complaint and more a warning to people who try to use this kind of marketing. It generally doesn't work, and where it does.. only very narrowly.

If you are losing money to try and attract customers by this method, you may just burning money. They won't become regular customers, you just lost money for no reason. His point about it working to attract Uber DRIVERS makes sense because it's like a hustle culture thing. You could probably attract sales people or affiliates with this kind of thing, but again, not retail customers.

I had a friend who ran a gym and for a while he kept trying to get more people in using Groupon and Classpass. The problem was that literally zero of them ever converted to a regular membership.

So full paying members were complaining that the classes were getting crowded, meanwhile he was collecting pennies on the dollar from the discounters. In his case at least it was "free revenue" in that it didn't directly cost him anything to serve the discounters. BUT.. If even a single regular member quit due to crowding, it offset 100 Groupon/Classpass people. That's how skewed the economics are.

Re: The worst users come from referral programs, free trials, coupons

#34

Post by mrweasel »

dazc wrote: post #28
mrweasel wrote: post #14

Earlier quoted context omitted.

What programs like that tells me is that I can get at least a 10% discount if I talk to one of your sales people. My wife doesn't consider something a discount if it's less than 20%, because "You can always get a 20% discount" (on certain product categories). I did have to deal with a store where I almost couldn't buy something, because I refused to signup for the "customer club program discount card", which gives yo…

Not many genuine businesses have a margin of 20%, especially in retail. If you can get such a discount then it's already been priced-in.

Electronics (excluding gaming console), furniture, interiors design stuff, appliances, clothing and beauty products are frequently 30 - 50% margin. I previously worked with buyers, the toy department expected around 40% margins, electronics didn't want to deal with anything that didn't make them 45%, unless it was part of some promotion.

You can always get a 20% discount on appliances in big-box stores, if you're flexible on the brand. I got 66% discount on a extractor fan when updating our kitchen, that's just insane.

Edit: depending on your script, you could get the Busybox image and use that as a base. Probably a little more work, but it does fix some of your dependency issues. It doesn't have bash, git or fzf though, so there's a fun challenge getting those build.

Re: The worst users come from referral programs, free trials, coupons

#35

Post by warner25 »

AlexandrB wrote: post #27
steveBK123 wrote: post #2

Anecdotally makes sense. Coupons attract scarcity mindset people. If your product targets more time poor money rich growth mindset people, this is a bad fit. My wife has a friend that did every Groupon known to man. She routinely signs up for gyms that have a 30 day special then quits. She says she wants to get in shape but can’t get over her own scarcity mindset to just pay for a regular gym continuously.

It's really weird to frame this as a question of "mindset". I certainly had a "scarcity mindset" when I was younger and had no money. Now that I'm older and have some money I have a "growth mindset". But really the main difference is my access to resources.

I agree with you. I've seen other people write about this before and it seems that the people talking about it are people who happen to make a lot more money than the average person. Good for them, but that doesn't mean that people who make less money just have the wrong mindset or some kind of moral failing.

I apparently have gone from an extreme "scarcity mindset," when I was in my 20s with questionable job security, to a moderate "scarcity mindset" now that I'm in my late 30s with a higher income, better job security, and 10x more in savings. It's still moderate because I'm a government employee with a relatively low ceiling on what I can make; not much room for growth.

Re: The worst users come from referral programs, free trials, coupons

#36

Post by steveBK123 »

Thinking more on this, I have a group of friends who partake in these types of deals. They are arguably a leading indicator of business models that are going to fail. Why? Because they will cycle through every single deal and never sign up.

Every single one of them cycled through all the meal kit trial discounts during the ZIRP era, without ever signing up for one (it's free food dude). If you think I am kidding, go google "Blue Apron competitors".. there's so many more than I even remember.

If the startups they were hustling were public companies, they'd be an incredible indicator of stocks to short.. alas.

Re: The worst users come from referral programs, free trials, coupons

#37

Post by IG_Semmelweiss »

red_admiral wrote: post #29

The kind of people who ran coupon schemes in the pre-internet days could have told you this. Back in the day, coupon schemes were things like you had to physically cut out and mail in vouchers from newspapers or magazines, and you got a discount on something like groceries in return. The point of this was market segmentation: you want to get people who (1) otherwise wouldn't buy your product, or at least not as much…

Actually , the one answer you gave, is a common myth[1]

https://www.investmentzen.com/news/the-surprising-identity-o...

Re: The worst users come from referral programs, free trials, coupons

#38

Post by dazc »

red_admiral wrote: post #29

The kind of people who ran coupon schemes in the pre-internet days could have told you this. Back in the day, coupon schemes were things like you had to physically cut out and mail in vouchers from newspapers or magazines, and you got a discount on something like groceries in return. The point of this was market segmentation: you want to get people who (1) otherwise wouldn't buy your product, or at least not as much…

The difference in those days is that people had to present an actual coupon that they had gone to trouble of cutting out and keeping. The advent of search 'business-name voucher code' brought this to anyone and everyone.

Re: The worst users come from referral programs, free trials, coupons

#39

Post by photonbeam »

jstanley wrote: post #11
dazc wrote: post #6

Recent example, a piece of furniture costing over £3k and I can get 10% off if I sign-up to their newsletter. As someone who works in retail marketing, this is a guaranteed way to ensure I don't spend a penny in your store.

Are you saying that if they offer 10% off when you sign up to the newsletter, that will prevent you from buying a product from them at all ? Why?

It makes you feel overcharged even with the discount, the product must actually be junk

Re: The worst users come from referral programs, free trials, coupons

#40

Post by steveBK123 »

AlexandrB wrote: post #27
steveBK123 wrote: post #2

Anecdotally makes sense. Coupons attract scarcity mindset people. If your product targets more time poor money rich growth mindset people, this is a bad fit. My wife has a friend that did every Groupon known to man. She routinely signs up for gyms that have a 30 day special then quits. She says she wants to get in shape but can’t get over her own scarcity mindset to just pay for a regular gym continuously.

It's really weird to frame this as a question of "mindset". I certainly had a "scarcity mindset" when I was younger and had no money. Now that I'm older and have some money I have a "growth mindset". But really the main difference is my access to resources.

It may come off this way, but I'm 40 and my friends doing this are.. NOT poor. The same friends who did this in college are the ones doing it now at 40 despite owning LV bags, $1M homes, etc.

It's sort of a mindset difference between "I'm going to make as much money as possible" vs "I'm going to spend as little money as possible". Ideally someone can try to do both, but I've met near zero who meet that criteria.

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