[HN Gopher] The worst users come from referral programs, free tr...
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The worst users come from referral programs, free trials, coupons
Author : jyunwai
Score : 153 points
Date : 2024-02-03 13:39 UTC (9 hours ago)
(HTM) web link (andrewchen.com)
(TXT) w3m dump (andrewchen.com)
| steveBK123 wrote:
| 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.
| baq wrote:
| She says she wants to get in shape but actually she likes
| visiting new gyms. Nothing wrong with that, right?
| steveBK123 wrote:
| She is a gym member maybe 1 out of 3 months because she is
| perpetually rotating through the deal she can get.
|
| The secret to this stuff is boring - persistent, continuous
| effort. If you can't even maintain a regular gym membership,
| you will not get that effort in. She's been complaining for
| over a decade as she continuous this charade.
| dahart wrote:
| To be fair, gym memberships are often crappy rent-seeking
| contracts. They love it when people start memberships for
| their New Year's resolutions and then stop coming in
| February but keep paying, and they often try to hike the
| prices on you, renew automatically, and make it difficult
| to cancel. I'm perfectly fine with paying for a gym but I
| absolutely hate signing up for memberships. Currently I'm
| going to a city-run gym that has a day rate, and it's more
| expensive than a monthly or yearly rate, and I still pay it
| happily and I feel like I'm getting a good deal, because
| I'm paying as I go for what I use and I'm not locked in and
| there's no risk of wasting money.
|
| Maybe she's actually staying more motivated to go this way,
| maybe her engagement is higher than if she paid. Or, maybe
| she'd love it if you gave her a gift and pre-paid for 6 or
| 12 months of membership somewhere? You could even tell her
| you got a deal, which is true regardless of what you pay.
| Valentine's Day is here...
| steveBK123 wrote:
| You actually hit the nail on the head re: gift giving. I
| stumbled upon this years ago with family more..
|
| If you want to gift anything nice to family who is more
| scarcity mindset, you absolutely HAVE to talk up the
| deal/discount you got, or how you paid for it with points
| that were going to expire, or something. It's also better
| if the thing you are gifting has opaque pricing / is
| somewhat custom or uncommon so they can't just google the
| price.
|
| Anyway.. everything turns into sales/marketing sometimes!
| hakfoo wrote:
| I'm amazed at this point, given the "subscriptions are a
| nightmare to cancel" meme, that nobody's turned that into
| a marketing message. Some of the gym ads say "cancel
| anytime", but "sure, just bring in this blood-endorsed
| document countersigned by at least five Supreme Court
| justices" is still implied.
|
| Services that say "prepay up-front and we'll never bill
| you" is a viable selling premise. Gift subscriptions are
| an obvious viable business that comes out of that model.
|
| I wanted to get my father a gift subscription to the
| local newspaper, and they basically had no idea how to
| handle a fixed-term subscription-- all they could point
| to were recurring auto-pay setups.
| AlexandrB wrote:
| 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.
| warner25 wrote:
| 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.
| steveBK123 wrote:
| There's nothing wrong with either mindset, most people are
| incapable of doing both at once. You can have "scarcity
| mindset" and be rich. Of course someone with scarcity
| mindset grows savings over time because they have scarcity
| mindset! They are good at saving your money!
|
| But this part: > 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.
|
| Pretty firmly puts you in one bucket. You might have more
| money, but you are asserting that in your 30s your growth
| is limited. Someone with a growth mindset would not settle
| into that job & accept that life path. They'd be job
| hopping, running a side gig for extra income, squirreling
| away every last dime into investments so that they can
| immediately flip into private business at early retirement,
| etc.
|
| Getty is an example of a really rich guy with scarcity
| mindset. My parents & in-laws were scarcity mindset.. which
| is how they retired at 59! People think it's a slur, it is
| not!
| warner25 wrote:
| I see where you're coming from regarding "[settling] into
| that job & [accepting] that life path" as a government
| employee. I thought about that after I wrote it myself.
| The alternative, however, strikes me as taking imprudent
| risks, if one is supporting a family, and having a work-
| life balance that one's family wouldn't appreciate (mine
| already thinks that I work too much). You're right on the
| mark: my savings rate, and government pension, should
| result in early retirement. I think I'm interested in
| having more time, not more money. I'm really content with
| consuming relatively little.
|
| Maybe it's the "scarcity" and "growth" parts of the
| terminology that I take issue with, but I'm not sure what
| better descriptive terms would be. Edited to add: The
| more verbose descriptions that you wrote in your other
| comment make sense... "I'm going to make as much money as
| possible" vs "I'm going to spend as little money as
| possible"
| steveBK123 wrote:
| It could be more like risk vs conservative / growth vs
| savings / etc.
|
| Personal anecdotes - in college I wanted more spending
| money, so I ran a little eBay business related to my
| hobby. One of my roommates got big into MMORPG goods
| mining & selling. Our other roommates got into things
| like getting their baked goods for free by showing up to
| bakeries at closing time.
|
| Later, at some point in our careers my wife & I found our
| industry to be stagnating and tried some side businesses.
| They didn't pan out after a couple years, so then we both
| switched industries/subindustries. We both change jobs
| every 4-5 years. I've had 5 jobs by 40, my wife 6.
|
| But on the other hand we come from families where our
| moms didn't work and our dads worked the same jobs for 30
| years.
|
| For me, just like compounding interest makes a big
| difference in returns in terms of saving more earlier..
| so does growth. If you settle into a stable safe job with
| 2-3% inflation raises, vs making sure you are always
| getting an average 5-10% raises, you would be shocked
| what it means to your compensation at the end of a 20
| year period.
| steveBK123 wrote:
| 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.
| nerdponx wrote:
| I have experienced this as well, mostly among people who
| did not grow up with a lot of money but managed to make a
| lot of it throughout their adult life.
| BytesAndGears wrote:
| 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 south, you
| might not be able to make money, so you should have extra
| somewhere to weather the storm. Resources flowing to you
| could become "scarce" (in your mind), so you're cautious.
|
| An abundance mindset person believes that they'll always be
| able to find extra somewhere. They don't need a big savings
| account because they'll be able to figure out a way to make
| money, no matter the circumstance. Resources flowing to you
| are "abundant" (in your mind), so you are more carefree.
|
| Neither is bad, they're just different. If you're older but
| still tucking away money and trying to not spend too much,
| etc, then you still have a scarcity mindset (like me).
|
| I personally don't know if my career will go away in the
| future, so I'm trying to build a nest-egg to be self
| sufficient regardless of my work, even though I have plenty
| of money in my budget to not think about it
| warner25 wrote:
| 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.
| steveBK123 wrote:
| 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.
| arbuge wrote:
| Eh, YMMV.
|
| There are innumerable stories of SaaS companies succeeding with
| referrals and free trials. And coupons + referrals have been the
| lifeblood of retail ecommerce for ages.
|
| All of these are a function of what you put into them though.
| Poorly run referral / free trial / coupon programs cannot be
| expected to yield optimal results or ideal customers.
| ghaff wrote:
| Free trials in that context makes some sense. I don't want to
| pay you sight unseen. I'm not really looking for a discount. I
| just want to evaluate something at no cost other than my time
| (which isn't nothing).
| palmfacehn wrote:
| I've seen similar outcomes where free users required more support
| than paid.
| dazc wrote:
| I once did a free gig for a neighbouring business, that was a
| lesson for me and not one I intend to repeat.
| cpach wrote:
| What happened?
| dazc wrote:
| 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.
| CM30 wrote:
| This is one of the reasons free web hosting mostly died out.
| You'd spend more time and effort helping people that weren't
| interested in paying (and often didn't want to learn how
| anything worked) than you'd make through ads or upsells.
| ghaff wrote:
| I sort of expected something more insightful.
|
| This general topic was discussed quite a bit when Groupon was a
| thing. The coupons brought in people who were pretty much only
| there for the discount, tipped poorly, and generally didn't
| become repeat customers. They weren't looking for a new place.
| They were looking for a deal.
|
| ADDED: Per another comment, there is probably an angle whereby a
| free trial is the necessary nudge for someone to try something
| they'd be willing to pay full price for if they liked it. But I
| didn't get that distinction between those two modes from this
| short piece.
| Veuxdo wrote:
| The note at the end that referrals performed better than non-
| referrals _for drivers_ was interesting. Plus I'd say that even
| if this isn't earth-shattering insight, there is still benefit
| hearing the results for something on the scale of Uber.
|
| I agree that including free trials with referrals and coupons
| doesn't make much sense. As others have commented, free trials
| are all-but-unavoidable in certain markets.
| gumby wrote:
| > I sort of expected something more insightful.
|
| It's just marketing spam. The legal disclaimer is longer than
| the content in this self-described "high quality newsletter"
| (and in Safari reader mode all you get is the disclaimer!".
|
| Plus you need to enter something that looks like an email to
| read it -- ironically, given the subject, nobody@a16z.com
| works!
|
| Par for the course for a16z, really.
| dazc wrote:
| Recent example, a piece of furniture costing over PS3k 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.
| jstanley wrote:
| 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?
| dazc wrote:
| Because they are throwing money around which means they
| either have ridiculous margins or are just desperate for
| cash.
| photonbeam wrote:
| It makes you feel overcharged even with the discount, the
| product must actually be junk
| rchaud wrote:
| I don't feel that way. A 10% discount simply sweetens the
| deal for a commodity (clothing, furniture, etc) I could get
| at many other places. It's the cost of acquiring a new
| customer.
|
| The whole reason I'm stopping to look around is because
| every price tag just got 10% lower.
| mrweasel wrote:
| 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 you a 20% discount. The
| staff just looked confused and didn't know what to do. In the
| end my wife filled in the form and got the stupid card.
| dazc wrote:
| 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.
| mrweasel wrote:
| 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.
| piperswe wrote:
| I think you edited the wrong comment.
| kzrdude wrote:
| Sports and outdoor gear almost always has discounts like
| this
| antisthenes wrote:
| There's margin on cost of goods sold, and there's the
| margin of overall business.
|
| Retail is low margin only if you subtract
| salaries/offices/marketing AND cost of goods.
| red_admiral wrote:
| If I wanted that product anyway, I'd sign up with my other
| email address I use when something looks spammy, and take the
| PS300 discount.
| rchaud wrote:
| Doesn't the 10% off apply to the shopping cart total? I take it
| not everything in the store costs PS3k?
|
| Not sure why this would turn anybody off. Plenty of stores do
| this.
| dazc wrote:
| Yes, plenty of stores do this and it doesn't turn off that
| many people.
|
| Think of an online retailer that has been around a while and
| is solvent though and I'll bet they don't do stuff like this.
| penjelly wrote:
| > Incentive programs often don't perform
|
| should be "incentive programs have a lower conversion rate".
|
| > less qualified (users) ... will use your app
|
| Thats a good thing, and their negative interactions with the app
| can be measured to improve the experience for other non-technical
| users.
|
| if gamification doesnt work, explain the popularity of the gacha
| games. Sure it may attract users who enjoy easy dopamine which is
| kinda dystopian, but apps need to make money, thats that reality
| app developers end up facing.
| JoshTriplett wrote:
| How well do invite systems perform, of the style that gmail and
| other services famously used, where you need an invite to sign up
| and users get a certain number of invites to hand out? (They do a
| great job of rate-limiting user acquisition, such as if you want
| to ramp up slowly for resource reasons. The question is, how's
| the quality of users obtained through invite systems?)
| wcunning wrote:
| 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?
| ghaff wrote:
| 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.
| coffeebeqn wrote:
| The free alternatives were also kind of ridiculous with
| terrible UX. Like hotmail was the best MS could do
| ghaff wrote:
| Yahoo wasn't terrible but Gmail was definitely better. I
| kept using Yahoo for a while as the address I used when I
| ordered stuff but over time Gmail tabs did a pretty good
| job of compartmentalizing email and it made more sense to
| just have the one address.
| nottorp wrote:
| That's a definite it depends :)
|
| In the case of Uber, all those didn't help acquiring me as a
| customer. I wasn't even aware of the existence of any coupons,
| referrals and stuff. I installed it because clicking a button in
| an app is much easier than calling for a taxi on voice AND
| explaining where exactly you are.
|
| In other cases though, they help.
|
| If you don't have a free trial or free tier and don't have an
| unique offering suited to me, how would I know if I want your
| product? As a small piece of anecdata, I would have never
| subscribed to GeForce Now if they hadn't let me try it for as
| long as I wanted in 30 minute sessions.
|
| Coupons are a well known form of discounting for customers who
| have more time than money.
|
| Referrals may be useful if your product needs to achieve critical
| mass.
|
| Etc etc, I'm no professional marketer.
| oatmeal1 wrote:
| This is a big reason why it's so hard to start a startup. You
| need access to high quality customers. You can't just start by
| making the beta version of your product free, because the
| customers you want aren't motivated by price. Implementing
| feedback from the low quality customers you start out with can
| make the product worse for the customers you actually want.
| rconti wrote:
| What quality of users come from forcing people to give up their
| email address to read a single effing blogpost?
| vintermann wrote:
| Let me add one more: people who were signed up in some collective
| deal against their will e.g. cable TV). You bet I'm a bad
| "customer", I don't even want to be their customer!
| forsyth2024 wrote:
| 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 used the service anyway so
| why moan when they use it for a little while and then stop?
| red_admiral wrote:
| For "bad", read "poor".
| yCombLinks wrote:
| Nah, there is more than 1 bucket here. There are the poor
| people, who actually need the coupon to afford it, but they
| are not usually the problem. The problem is the stingy
| people. They'll complain the most, try to get refunds the
| most etc. Blah blah blah, if they can get it they should.
| Whatever, I'd rather not have their business, I'll take the
| 80% of people that are happy.
| steveBK123 wrote:
| 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.
| hnthrowaway0328 wrote:
| Well then don't offer them?
| red_admiral wrote:
| 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 and (2) without giving it away any cheaper to
| those who would buy it already. Who goes through the effort to
| cut out and collect vouchers for a little bit off their weekly
| shop?
|
| One answer is "poor people". Calling them "much, much worse
| customers", is a value judgement.
| IG_Semmelweiss wrote:
| Actually , the one answer you gave, is a common myth[1]
|
| https://www.investmentzen.com/news/the-surprising-identity-o...
| vdaea wrote:
| Which makes sense to me - more educated people are those who
| know how to save.
| ghaff wrote:
| There's a difference between being frugal where it actually
| moves the needle and pinching every penny when the
| effort/scarifice far exceeds any benefit.
| dylan604 wrote:
| What effort/sacrifice was expelled? Flipping through the
| paper with a pair of scissors? You didn't even need to
| buy the paper as the coupons were ignored by the majority
| of those that did buy the paper and would just toss the
| coupons. It took no more effort than what people expend
| doom scrolling the socials.
| ghaff wrote:
| People "waste" time on lots of things. But, yes, coupon-
| clipping and redemption is a certain amount of effort and
| I'm not going to bother unless it hits a fairly high
| threshold for something I'd have bought anyway.
| ipaddr wrote:
| Coupon clipping is not wasting time. Understanding how
| much you pay finding coupons to reduce that is will save
| a lot of money. Just the awareness itself will help.
|
| Write on here that it's a waste of time is probably the
| biggest waste of time. At least it's low effort.
| lupusreal wrote:
| Couponing is a hobby that is practiced by many people who
| have secure financial positions but get a thrill out of
| saving a few dollars on stuff they didn't need to buy in
| the first place. It happens that these sort of people are
| often pains in the ass from a retail worker perspective.
| They try to bend the rules by stacking coupons, using
| expired coupons, twisting what product the coupons are
| for, etc. They also waste a lot of time rifling through
| coupons looking for the best one to use, and just
| generally waste a lot of time and cause grief for
| everybody near them.
|
| It may not seem like an exciting hobby to you so maybe
| you think this is made up, but try to remember that there
| are people who collect stamps or sit around train tracks
| to see locomotives. One man's absolute bore is another
| man's nailbiting thrill.
| RicoElectrico wrote:
| Polish HN readers laughing at the domain ATM ;)
| Retric wrote:
| It fits my experience, the people I knew used coupons
| frequently where are all low income. One ended up having
| quite a large savings from compound interest and another got
| a healthy inheritance, but their jobs paid little.
| szundi wrote:
| I am a multimillionaire and love coupons and good value
| booleandilemma wrote:
| In your previous comment you said you wrote "about 1000
| games" in your school years.
|
| I wonder if that was a lie too? :)
|
| https://news.ycombinator.com/item?id=39235575
| ipaddr wrote:
| Why would making 1,000 games (that can be translated to
| many) that lead to a game startup and successful exit
| would call you to question if the parent was a
| millionaire.
|
| Successful exits usually are worth millions.
| rand846633 wrote:
| If 1,000 games can be translated to many, then
| multimillionaire can be translated to "at least many
| thousand dollars in net worth"?
|
| The point for criticism of unlikely claims online is that
| it is hard to know if made up, thereby kinda dubious as
| an justification for an acclaim of authority on a
| specific topic..
| geraldwhen wrote:
| If you make a game small enough, it's doable over 8
| years. If the real number is 100, it's definitely doable
| dazc wrote:
| 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.
| rchaud wrote:
| 9 out of 10 times, those online coupon finders never worked.
| You needed to use them pretty much on the day they were
| posted to the site, otherwise there would be too many
| redemptions by the time it found it ranked on Google search.
| paulmd wrote:
| Today it is pretty much actively a scam and you are better
| off searching for a newsletter subscription that often come
| with a 15% off code etc.
|
| (I assume the mechanism here is to obscure the coupon
| enough that Amazon doesn't get mad you're selling under
| their pricing but you let the customer have some of the
| savings from avoiding Amazon's commission.)
| FredPret wrote:
| 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.
| electriclove wrote:
| Why the downvotes / disagreement? "People using coupons ->
| worse customers" makes sense to me. The shop isn't getting
| more money from these customers.
| ipaddr wrote:
| Not true. A dollar off coupon will encourage purchasing
| otherwise ignored products.
|
| I buy toothpaste. A dollar off coupon will encourage
| another brand purchase to a more expensive product that may
| get repeated.
|
| The shop may get addition money by having me buy other
| items to save me the time of multiple store visits.
|
| There is a reason why each week a different item goes on
| sale. That loss leader leads to more purchases
| fireflash38 wrote:
| But would you continue to buy it afterwards, or just
| chase the discounts? Aka:are you truly a "conversion" or
| just a single discount sale?
| Tomte wrote:
| Doesn't really matter if the discounted price still makes
| you a profit.
| zakki wrote:
| Not continuing to buy doesn't make someone worst
| customer. What about turn out it is a worst product so
| they need to offer a discount?
| anonymouskimmer wrote:
| > There is a reason why each week a different item goes
| on sale. That loss leader leads to more purchases
|
| Except that I, the person who already buys that product,
| buys nothing, or buys it from another store, because it's
| no longer in stock when I make my purchases in the
| evening. (I've since changed to shopping in the morning
| or early afternoon, so run into sales pricing outages
| much less frequently, but the general point stands.)
| throwaway8877 wrote:
| Careful there. People also may also not feel good about
| being taken advantage off. They may also not feel good
| about valued less than a little more paying people.
| bombcar wrote:
| It's the other way around. Not all coupon users are worse
| customers (who would refuse a 5$ discount offered during
| checkout?) - but the worst customers will also go out of
| their way to find coupons.
| AnthonyMouse wrote:
| But even that isn't so simple, because there are at least
| three types of people who use coupons.
|
| The first are the ones coupons nominally target -- _not_
| people who go out of their way to find coupons. Just
| ordinary new customers who need an incentive to try the
| product once and then might become repeat customers.
| These are actually great when you can get them, but they
| 're not that big a percentage of coupon users.
|
| The second is the, let's say, analysts. Smart retirees
| who now have lots of free time and can use it to find a
| good deal. Tech savvy customers who know how to use
| advanced search features to find the best deal or are
| willing to set up a scraper to send them an alert. These
| customers are great too -- you don't make much margin
| from them, but you make a little, and then they
| immediately go away and leave you to keep their money in
| peace. And when you offer a good deal, _they_ will come
| to _you_ , so your margin is lower but so is your
| marketing expense.
|
| The real problem is Karens. They don't know how to read
| but own a fanny pack that says "the customer is always
| right" and want to spend two hours arguing with you to
| try to get you to accept an expired coupon for the wrong
| product over something that has a $0.17 margin.
| ginko wrote:
| 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.
|
| [1] https://en.wikipedia.org/wiki/Price_discrimination
| akudha wrote:
| There is this movie on Netflix called Queenpins, who run a
| coupon scheme/fraud business.
|
| I don't have any experience with coupons, but I found the
| movie interesting.
| almostnormal wrote:
| Lured into a physical shop by a voucher they are likely to by
| things they would have bought elsewhere, the effort to visit
| another shop not being justified.
| yjftsjthsd-h wrote:
| A similar effect happens online with free shipping over a
| certain dollar amount, which incentivizes getting as many
| things as you can from a single site.
| ghaff wrote:
| Alternatively, free shipping (or free shipping at quite a
| low threshold for what's being sold) is sufficiently
| normalized that if shipping is _not_ free, some percentage
| of users will just close the window and move on.
| ghaff wrote:
| I'm actually sort of curious why, sometimes substantial, mail-
| in rebates seemingly largely went away? I haven't seen one in
| years. A significant customer of a former employer processed a
| _lot_ of these out of Minnesota.
| lcnPylGDnU4H9OF wrote:
| Probably they were introduced as marketing and when more-
| preferred customers realized they never mailed anything in,
| and therefore the rebate price is misleading, it ceased to be
| effective marketing.
|
| Sounds like it was also the difficulty around "doing it
| right" which is probably different per seller. https://www.co
| nsumeraffairs.com/consumerism/rebate_madness01...
| ghaff wrote:
| Though they weren't a flash in the pan thing. It's true
| that their allure for marketing was that a lot of people
| priced the rebate in and then never mailed for it or
| violated some term/condition. But they were commonplace for
| a long time.
| etrautmann wrote:
| Sending outgoing mail is more rare now though? Perhaps
| when it used to be common to stamp and mail letters then
| one more wasn't as big a deal. Now, I'm not even sure
| where our stamps are or if we have any at home.
| ghaff wrote:
| Yes, as I wrote in another comment. I know where my
| stamps and envelopes are but I imagine a lot of people
| are like "I need to fill out a form and mail it? ROFL.
| Like that's going to happen. Stuff your rebate. That's
| fake news."
| red_admiral wrote:
| This is a pure guess, but one of the things a buisness would
| get out of a mail-in rebate scheme is a customer's contact
| details, for future marketing (or even to sell on to other
| companies). Of course, along with the information that "this
| is the kind of customer who takes part in mail-ins".
|
| That kind of thing can be done far more cheaply, and far more
| effectively, online these days.
| rhplus wrote:
| They're still going strong in the contact lens business.
| Annoyingly so.
| bombcar wrote:
| Cost of processing vs most customers ignoring them, based on
| my experience with the biggest one left that I know of
| (Menards 11% and the Home Depot equivalent).
| ghaff wrote:
| I suspect it's some combination of the human processing
| cost increasing and the idea of finding a stamp and an
| envelope to get a check (maybe) mailed to them making more
| and more people roll their eyes and just discount rebates
| out of hand.
| bombcar wrote:
| Lots of the manufacturer's rebates have become instant
| rebates because of pressure from places like Walmart (who
| really, really dislikes having to advertise a higher
| price than possible).
| anonymouskimmer wrote:
| Just an anecdote but years ago when Tiger Direct was still a
| decent place they offered a mail-in rebate for a product and
| I sent in everything that was asked for. I asked later about
| why I hadn't gotten the rebate, and they told me that I
| hadn't sent in everything that was asked for and wouldn't be
| getting the rebate. I responded that I couldn't send the
| things in anymore as I had sent in the originals in the first
| rebate request, and that if they didn't rebate me I'd never
| shop from them again. They sent me the rebate. I also never
| shopped from them again anyway.
|
| Probably not the reason they went away, but I do wonder how
| many customers were lost from bad rebate programs or rebate
| program mistakes.
| saurik wrote:
| Yeah: when I see "mail-in rebate" I just think "low-key
| scam". It also now tells me the "real price" of the product
| is cheaper, and so I feel screwed if I don't intend to put
| in the effort to deal with the scam, which is a rather
| different mechanism from coupons.
| treffer wrote:
| It becomes more funny once you shift online. Basically every
| checkout has a "coupon" field.
|
| Now you look for coupons, and some coupon aggregator of
| doubtful quality pops up.
|
| You find something that works. Or give up. Done.
|
| The coupon sites are usually of doubtful quality because ....
| Basically all affiliate networks forbid it. It's also the
| reason why "last click" attribution is horribly broken.
|
| Funnily enough it's now mostly magazins & newspapers that run
| these coupon sites in Germany.
| legutierr wrote:
| > The coupon sites are usually of doubtful quality because
| .... Basically all affiliate networks forbid it.
|
| I wasn't aware of this, and I'm not sure I understand why
| this would be the case. Do you have any more information
| about this?
| anonymouskimmer wrote:
| https://news.ycombinator.com/item?id=39243992
| MichaelVangard wrote:
| If you're asking why a referral program would forbid the
| listing of referral links on coupon sites, I'd imagine it's
| because most people visiting a coupon aggregator are
| already on the website checkout page ready to make a
| purchase. You're not referring these customers and bringing
| someone new to the table.
| shostack wrote:
| I used to run an affiliate program for a company and one of
| the top affiliates who was making a large sum annually from
| the program before I took over got quite hostile when I
| pointed out the bulk of their referrals were from coupon
| sites. They started trying to intimidate us about the
| backlash that would ensue if we took action and even brought
| a very physically intimidating person into a meeting for no
| other apparent purpose other than to be intimidating.
|
| The data was very cut and dry and in blocking coupon sites in
| our terms as one of the first actions I took in taking it
| over they lost a very high double digit % of their revenue
| from the program overnight.
|
| Surprise surprise, overall trials and subscription rates
| didn't change and channel ROI improved significantly. Goodbye
| Felicia.
| jncfhnb wrote:
| 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.
| leshokunin wrote:
| This is a value judgment. You're assuming the author is
| scheming an elaborate way to be dismissive of poor people.
|
| You just split the entire world of coupon users in 2 arbitrary
| sections. That's another value judgment.
|
| There are many other reasons to use coupons. Such as: I like a
| good deal. I like to use coupons. I wanna try something new. I
| am bored and want to cut coupons. I got this coupon book. This
| place opened and I'm not sure I wanna try it full price. Etc.
|
| There are so many ways to explore this question.
|
| As for "worse customers", it is entirely possible for a
| customer to be bad, and for it to have nothing to do with being
| poor. I recommend studying the user journeys of user cohorts
| motivated by external rewards, vs those who aren't.
| KorematsuFredt wrote:
| All customers are worse customers in my opinion, and those who
| seek max value for their bucks are often the worst. But I am
| always that customer. I harassed my car dealer so much that it
| took 9 months but he sold me the car for the exact price I have
| been demanding.
| steveBK123 wrote:
| 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.
| TheCaptain4815 wrote:
| I did the same with the free money those gambling sites were
| all giving away. Stayed disciplined and made around $800
| _puk wrote:
| That coupled with the crazy cashback deals that were on offer
| from referral sites..
|
| I cleared double that, but doubt it would work these days.
| pxx wrote:
| Ah with gambling the business model is very different. You
| just need to be fishing for whales. Somebody can't be a 1000x
| or even 100x customer on Uber compared to the median.
| Somebody can easily be a 1000x gambler
| HWR_14 wrote:
| Doesn't Uber offer helicopter rides? I'd imagine those
| people are 100x customers.
| coffeebeqn wrote:
| 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
| ghaff wrote:
| They still mostly were neither free nor a particularly good
| deal.
|
| I tried Blue Apron once (probably with a discount). In addition
| to the dark pattern of we'll send you meals next week by
| default they pretty much all used, they all seemed to have a
| really narrow use case.
|
| Basically, you had to be fine with cooking sometimes fairly
| time-consuming recipes for 2+ people three days a week, but
| didn't have a well-stocked pantry or interest in doing a
| grocery shopping.
| steveBK123 wrote:
| Really depends on where you live.
|
| In NYC/HCOL areas where the groceries are practically luxury
| priced, having a discounted meal kit delivered does add up
| savings-wise.
|
| I think it's like some of the other HCOL urban business
| models that won't / didn't scale nationally during/after
| COVID. Favorite example is Peloton. $40/month virtual gym is
| a great option in NYC where a "nice gym" might cost 5-10x
| that. In the rest of the country where you can get a
| serviceable gym for $20-50/mo and NICE one for maybe
| $100/mo.. it's not a compelling offer! People think I'm
| joking but my hometown which is 75mi outside NYC has a $20/mo
| gym. Why would anyone there get a Peloton?
| ghaff wrote:
| For me, it wasn't even so much the money as it was I had to
| plan and then do some (sometimes fairly time-consuming)
| meal prep. There are things I can buy either locally or
| keep in the freezer that are good and are far less time to
| prepare.
|
| But I agree with your basic point. More than a meal at
| McDonald's is probably a lot to many people.
| 972811 wrote:
| yeah surprisingly that was ideal for me when I was single. i
| enjoy the actual physical act of cooking but hate the
| constant planning/prep/shopping. guaranteeing a few healthy
| dinners a week that I don't have to plan was pretty nice.
| unfortunately the meal quality dropped a good bit and the
| recipes get redundant after a while
|
| i'd still recommend it to anyone who's never cooked before at
| all and wants to start
| SkyPuncher wrote:
| We use HomeChef now and only get their oven ready or "quick"
| meals. It's wonderful.
|
| Previously, we tried a few services. It would often take an
| hour for me to cook a meal. These weren't anything special
| either. I had four major complaints:
|
| * it often felt like recipes would include unnecessary steps
| just to make you feel like a cook. Things like mixing siracha
| and mayo to make the dressing when they could have simply
| sent it combined.
|
| * reading the instructions was a ridiculous slow down. After
| a full day of work, it wasn't fun having to interpret the
| overly zealous recipes.
|
| * the time estimates were clearly made by someone who preps
| food all day.
|
| * they still expected you to have certain basics. Not really
| the end of the world, but part of the point was to not worry
| about any other shopping.
| nipponese wrote:
| I frequently use 50% off discounts to buy square pie guys
| pizza.
|
| Will I buy that pizza at full price? _probably_ not, but I will
| tell everyone that it's amazing because is it. So it's a $12
| review, right?
|
| Compared to a $1k-$5k /video influencer, isn't that a deal?
|
| I've even spammed their name in this comment.
|
| Disclaimer: I know nothing about marketing economics
| dylan604 wrote:
| > So it's a $12 review, right?
|
| > Compared to a $1k-$5k /video influencer, isn't that a deal?
|
| I mean, that totally depends on the "influencer" right? How
| many people will you actually talk to where you've spent $12?
| How many people will hear about it from the influencer? If
| they have 1M subs and get $5k, that's half a cent per view.
|
| Sometimes, simple arithmetic can disprove ridiculous
| viewpoints. Now, it's just a matter if you're one of the
| types of people that will hold on to ridiculousness in the
| face of evidence.
| nipponese wrote:
| Well how many people do you calculate saw my comment?
| dylan604 wrote:
| 1
| steveBK123 wrote:
| A loyalty program is probably a better model for attracting
| regular customers than this though, right.
|
| You want to attract people willing to pay more or less full
| price. A program that you get the 10th pie free, and always
| get a free 2L soda with every pie or something would
| accomplish that better.
|
| An example - I live part of the year in an area that is more
| a "summer destination" so a lot of the local restaurants
| close November thru April.
|
| One hotel restaurant stays open year round, and in their
| first year they mailed everyone locally an offer to get a 15%
| off "locals only" loyalty card. You had to apply, send some
| proof you were local, wait for them to mail the card, and
| then keep it in your wallet. 15% is a nice little incentive,
| but given tax/tipping/etc, doesn't materially change the
| price. Going there off season, even just monthly, all the
| hosts/waiters know us well now vs the more transient guests.
| So it sticks out in our mind as a reminder that they are
| always open, and a friendly place to go eat.
| nipponese wrote:
| The core issue here, is the campaign responsible for conversion
| or not?
|
| Some of the most profitable businesses of our era are just
| endless free trials and, surprise, they are just portals that
| sell ads.
| eightysixfour wrote:
| I spent some time in UX consulting and I started to notice a
| pattern that surprised me a bit - having really slick UX (if that
| isn't your key selling point!) in a very early product seemed to
| be a bit of an anti-pattern for long-term success. My hypothesis
| is that there are a group of users who will sign up for anything
| and "play with it" if it is easy enough and slick enough, but
| that doesn't make them good customers, much like the customers
| Andrew is talking about.
| graemep wrote:
| Could you elaborate? Easy to signup for or initially easy to
| use?
|
| Would it actually lose customers long term or just give you
| early extra customers you fail to retain?
| eightysixfour wrote:
| Sure - an example for me is RunwayML. It is a neat product
| that is very accessible to anyone, so I signed up and played
| with it a bit. Every once in a while I hop on and show
| someone a little demo of it as a cool GenAI/ML thing, but
| video isn't a medium I work with or intend to work with. I am
| never going to become a paying customer.
|
| The low barrier to entry (both in sign-up and usage) helps
| amp up user counts and usage which makes you think you have
| some sort of market fit, but the interest is not real.
|
| The startups _I_ worked with that experienced explosive
| growth were ones where their initial UX was mediocre or even
| hostile, but the demand for the thing was so high they had
| customers anyways. Improving the UX unlocked more growth.
|
| I have a skewed perspective since people came to us for UX
| issues, so this isn't an iron law or anything, but I think
| about it a lot when I see very shiny, polished launches.
|
| A counter to this may be something like Linear, where the UX
| _is_ the value.
| graemep wrote:
| Thank you. That makes a lot of sense.
| SkyPuncher wrote:
| This aligns with my experience as well.
|
| My hypothesis is slightly different. When people have a strong
| enough need, they're willing to look past UX/UI issues because
| they see the core value. They're okay using a "crappy" product
| because it's actually doing something really important for
| them. Later in a products life, it needs a better Ui to attract
| the remaining user and compete with the market.
|
| The crappy UI serves as a bit of a filter, helping you learn
| quickly if something is valuable.
| eightysixfour wrote:
| I agree and I think our hypotheses are two sides of the same
| coin - if the UX is great it gains users that aren't good for
| business, if the UX is bad it filters for users that deeply
| need the product.
|
| I'd certainly rather be in a startup that is dealing with the
| latter than the former.
| pflenker wrote:
| Only tangentially related - one big hardware store chain in
| Germany ran bankrupt because they started to frequently ran ,,20%
| on everything" marketing activities. The idea was to attract
| customers who would return when one activity ended, but the
| result was the opposite: the extra customers only came for the
| 20% and didn't return between the activities, and the loyal
| customers started avoiding the chain and waited for the next
| program to start.
| standardUser wrote:
| In the US we had Bed, Bath and Beyond which was famous for it's
| ubiquitous 20% off coupons. I'm not sure if their failure had
| anything to do with the coupons, but many people, myself
| included, only went there with the specific intention of using
| that coupon. They were bought by Overstock and all the stores
| were shut down.
| jawns wrote:
| Those 20% off coupons allowed them to price an $80 item at
| $100. If the customer has a coupon, they get that item for as
| low as the store is willing to sell it for -- which works out
| to be market price. But if they lack a coupon, they're likely
| paying above-market price, and that's extra revenue for the
| store! Granted, this is an oversimplification, because many
| people might decide not to buy the item at a perceived above-
| market price. But I think, in general, coupons work. JCPenney
| famously got rid of coupons in 2012, and the customer outcry
| and effect on its stock price forced them to restore them
| soon after.
| switch007 wrote:
| That's pretty tragic. Did nobody realise that hardware
| purchases are infrequent?
| arthurofbabylon wrote:
| > Incentives are a form of selection and you need to make sure
| you know what you're selecting for.
|
| That's the best insight from the article.
|
| I'm a little disappointed that the leader of one of the world's
| most prolific referral programs didn't have more to say about it.
| awinter-py wrote:
| have heard similar feedback from brick + mortar businesses
|
| go-kart track: folks who came in through groupon never converted
| to repeat customers at full price
|
| boutique fitness franchise: classpass users have low or negative
| margin, and don't convert to full price. they may be useful to
| fill out a part-empty class because that incurs no extra cost,
| but if you're spending new money to host them it's not economical
|
| opposite case of this is pharma, where the subsidies go up the
| stack instead of down. arguably goodrx is the 'true' price, and
| the retail price you pay as a walk-in is drastically inflated
|
| there are also communities of people who rotate credit cards to
| chase the best reward / rebates deals; imo they are behaving
| rationally in the face of an industry that offers bundles which
| decline in value over time
| amluto wrote:
| > 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.
| amtamt wrote:
| > The moral: set up your pricing structure and promotions to
| incentivize the behavior you want from your customers.
|
| Is it aligned with the incentive digital marketing team has?
| Taylor_OD wrote:
| But but but growth over everything... Right?
| pierat wrote:
| Eh, probably.
|
| When I bought a webcam at the local best buy, I price-matched
| scamazon's price that was 30$ cheaper. I trust Best buy to not
| sell scam shit, but do NOT trust Scamazon.
|
| But hey, I'll get the scamazon price WITH the convenience of in-
| person pickup.
| geor9e wrote:
| It's me, I'm the worst user. I subscribe&save at every
| opportunity, then cancel all of them before the next shipment. I
| get several new credit cards a year just qualify for the $500
| sign up bonus, then never use them again. I have 20+ gmail
| accounts to use new customer promos over and over. You do not
| want me as a customer.
| kbos87 wrote:
| It's really easy to spot effective vs. ineffective/"empty
| calorie" growth channels when you look at them through the lens
| of a single word - intent.
|
| Ads appearing alongside search results are among the highest
| intent, which is why they perform well and are thus so expensive.
|
| Referral programs and coupons are people looking for generic
| deals. You might form habits among a few of them, but the
| likelihood is low. Free trials are probably more dependent on the
| context.
| oneoff123 wrote:
| Ive always looked at it as a spectrum. You can buy thousands of
| hits for EUR3 but if you want to convert those you have to offer
| a service where one gets paid (very little) for visiting
| websites.
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