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The worst users come from referral programs, free trials, coupons
101–110 of 175 posts
Re: The worst users come from referral programs, free trials, coupons
#102Earlier quoted context omitted.
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 think you’re making a false comparison. Growth mindset is a separate thing entirely. “Growth” versus “fixed” in terms of ability to change your thought patterns. It’s “scarcity mindset” vs. “abundance mindset”. In terms of ability to gain resources. A scarcity minded person, such as myself, thinks that they should build extra buffer and not spend their resources, in case they need them in the future. If things go s…
This is a good explanation. I think the word "abundance" is more fitting than "growth." I also like how you frame it as someone with an "abundance mindset" possibly being wrong, foolish, etc. to think that they can always get more resources whenever they need them. When I've seen this written about before, it really seemed like it was framing the "scarcity mindset" as being wrong; like the person with that mindset is just obviously leaving so much (money, pleasure, etc.) on the table.
> If you’re older but still tucking away money and trying to not spend too much, etc, then you still have a scarcity mindset
This does seem to become something of a problem when people earn and save prodigiously so that they can retire, but then never feel comfortable enough to actually retire and start spending down their savings. I don't want to be "the richest guy in the graveyard," dying at 80 with an 8-figure net worth (in today's dollars), but I see how that can happen.
Re: The worst users come from referral programs, free trials, coupons
#103> You have a target market and sometimes it takes time for a product to spread through its ideal users — this is magical because word of mouth is free. And when it happens in an organic way, the intent is even higher. But if these ideal users encounter the product via an incentive program, you often “pull forward” these users, thus costing you money, when you would have gotten them anyway.
It’s worse than that. Some of these users you think you pick up via an incentive program were already loyal repeat customers!
As a silly example, there’s a local cafe that is part of a small chain that roasts its own (excellent!) coffee. I used to buy bags of coffee at their shop. But their website often has promotions, which they market to me heavily, which makes it cheaper to shop online and even cheaper if I wait for the right promotion.
And if I go to the cafe, I don’t cost them money in free shipping and I might buy a drink or a snack!
The moral: set up your pricing structure and promotions to incentivize the behavior you want from your customers.
Re: The worst users come from referral programs, free trials, coupons
#104The 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…
Another answer is “someone who would slog through some effort to get a tiny bit of a better deal” and these people are definitely worse customers, rich or poor.
Coupon programs are arguably a form of price discrimination[1]. It allows you to sell at a lower price to people who a willing to put in the effort while still being able to sell for more to people who are fine with sticker price.
Re: The worst users come from referral programs, free trials, coupons
#105The 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…
My in laws side of the family still has plenty of grocery coupons active in their area. It’s definitely not a poor person thing. It’s a generational / cultural thing.
Re: The worst users come from referral programs, free trials, coupons
#106Earlier quoted context omitted.
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 fle…
I think you edited the wrong comment.
Re: The worst users come from referral programs, free trials, coupons
#107Thinking 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…
I did the same with the free money those gambling sites were all giving away. Stayed disciplined and made around $800
I remember playing a lot of very boring optimal blackjack to break even on money and pick up the deposit bonus. Usually you had to do something like play the total amount of the bonus once before you could withdraw it
Re: The worst users come from referral programs, free trials, coupons
#108Earlier quoted context omitted.
I think you’re making a false comparison. Growth mindset is a separate thing entirely. “Growth” versus “fixed” in terms of ability to change your thought patterns. It’s “scarcity mindset” vs. “abundance mindset”. In terms of ability to gain resources. A scarcity minded person, such as myself, thinks that they should build extra buffer and not spend their resources, in case they need them in the future. If things go s…
This is a good explanation. I think the word "abundance" is more fitting than "growth." I also like how you frame it as someone with an "abundance mindset" possibly being wrong, foolish, etc. to think that they can always get more resources whenever they need them. When I've seen this written about before, it really seemed like it was framing the "scarcity mindset" as being wrong; like the person with that mindset is…
Neither is more right/wrong in a general sense.
Either in their extreme can be "wrong".
It also has impacts on how your kids turn out to relate to money later.
My wife and I were the oldest child of scarcity mindset parents. For both of us it turned into a motivator to "not have to think about money" on the income side.
For me, the worst thing in the world was when I had to ask my parents for money, it was emotionally draining. I haven't asked my parents for a penny since I turned 20. They are generous in gifting money/things at time/place/amount/reason of their choosing, but I never wanted to have to ask again.
It drove me to want to have cashflow, and I started working when I was 14 under the table, officially W2 summers/weekends/after school from 16. I've really never stopped working, been doing my own taxes since I was 16.
My wife ended up with almost 6-figures of college debt ~20 years ago because her parents contributed very little & were sticking to a very strict budget to payoff their mortgage in under 15 years. After paying off the mortgage and retirement, they became much more generous. They bought themselves several (cheap) vacation homes and investment property. The impact on her though in her 20s was to feel very resentful of them for some time, fair or unfair as that is.
Re: The worst users come from referral programs, free trials, coupons
#109Earlier quoted context omitted.
So it famously worked really well to create desire around Gmail, but it also famously didn't actually get anyone to use Google Plus or Google Wave. I was desperate for invites to both and then... never found a reason to use them? So it probably does better in terms of rate limiting than anything else. Maybe the right modern comparison would be Threads to BlueSky?
Everyone increasingly needed email at the time, people weren't especially wedded to their current email providers, and Gmail was arguably better than whatever they were using and free. Google Plus was a social network that never got widely used outside of certain circles and Wave was this new weird thing that never took off.
The free alternatives were also kind of ridiculous with terrible UX. Like hotmail was the best MS could do
Re: The worst users come from referral programs, free trials, coupons
#110Earlier 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.
Sports and outdoor gear almost always has discounts like this