Monday, October 17, 2011

Discount Cards

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Thank you for letting me scam you last week.

Scams are awesome, aren't they? I've got a few of them I'd like to tell you about, and then we can work together and do what's morally required of us: parting suckers from their money.

A great way to part suckers and their money is to make them feel like they're getting a huge discount on what you're selling. And for eons, the traditional route to doing so has been to inflate the price and quote that to the customer, then let him haggle you down. It has worked well in the open-air markets of the world for millennia. Americans haven't directly experienced the joy of haggling in quite some time outside of a car lot, but if you'd like to see how it works, you can easily take a trip to Mexico and give it a try. I got my first experience when I was briefly stationed in San Diego. A couple weekends, we went down to Tijuana.

In Tijuana, and probably other Mexican border towns like Juarez, there is a touristy section of town where the locals bring what you're supposed to believe are handmade crafts (many of which might actually be) and if you pay the asking price, you're going to feel ripped off when you ask your buddy who DID haggle what they paid. For example, I found a really nice onyx chess set. After some haggling, I bought it for about $15. I have since seen the same set in two or three different stores selling for $50. I think I got a good deal! But if I hadn't haggled, I would've wound up paying about $30 or more.

Since we in America don't haggle on anything but the price of a car any more, and we all dread doing that, we don't get much experience with it, and it makes us pretty vulnerable to scams which use this simple principle of asking for a lot more than it's worth.

So it's not at all uncommon to see sales advertised which offer large discounts of 25%, 30% or even more, but which in actuality are the same price as before the sale. You've heard the deal: "They marked it up 35% so they could offer a 30% discount."

So let's do something like that ourselves, except we're going to do something different so people won't realize we're scamming them the same way everyone else does. What we're going to do differently is create a membership club for our grocery store. We'll even print up special cards so that people feel special, and at the cash register, they'll have to sign up for and use those cards to get discounts and sales.

This way, we can jack up ALL the prices in our store, then offer discounts on a few items for those people who have the card, and at the register, we'll tell them how much they've "saved" so they feel like it was worth it to get this card. We could sell them this card, but we could also give them away for free so that our customers feel like we're giving them something for free on top of the discounts.

Of course, it costs money to get these cards printed and get the card-reading equipment and track our customers and do all that obnoxious paperwork just to get the card, but we'll just pass those costs along to the customer. We can't add those costs to just the non-card-users, because there won't be many of them, and it would drive business away, but if we apply the additional cost burden too ALL customers, it will be harder for them to notice.

This puts us at a pricing disadvantage against any store which does NOT use this expensive system, but what are we going to do? We can't accept a smaller profit; I NEED a new swimming pool because the old one got wet! I think the "savings" we'll report to the customer should suffice to distract them from it. Most people believe anything you tell them if you say it with enough authority and conviction.

But wait, I've got another great idea!

Since we're already tracking what people are buying with their cards, why don't we use this information to make even more money off them? For instance, we can use what's called "targeted advertising" to send them ads regarding things they buy and things similar to things they buy. This should keep us on their minds so they don't leave us, and it should bring them in to check out those alternatives. They'll think we're very relevant and that we have everything they're looking for on sale all the time!

It will take a little while to get this information, and then to make use of it, but once we do have it, we have a choice of either lowering our prices or of pocketing the profits. HAHAHAHA!!! Yeah, like we'd ever choose to lower our prices! Had you going there, didn't I?

But wait, there's still a lot more we can do!

Our store doesn't carry everything everyone wants. It's simply not possible, and trying to do otherwise would cost too much. Let Bass Pro handle motorboats, we'll take care of groceries.

But people still DO want to buy stuff we don't have. How to profit on those sales? Simple! The stuff that people DO buy from us can still be used to find out other things people want to buy which we don't carry. What if we sold that data to other companies who DO sell those things? We can make as much in selling this behavioral data as we can in our actual business, and it's all PURE PROFIT! Our customers have already bought the equipment required to track what they're doing, we'll leave it to the other businesses which buy our data to interpret it; after all, we can't possibly know what they're looking for or how to get it from the data.

We'll get business from more than just Bass Pro. Think of all the insurance companies wanting to find evidence that their customers might have undisclosed health problems that they should be getting charged for. Think of all the mass-email-marketers who are looking for suckers to buy viagra. Think of all the government agencies desperate to find out what Americans are doing; and not just OUR government, but all of them! And think of all the uses we can't ourselves even conceive of! There's no limit to the uses that the data could be used for, or the people who will buy that data.

This is again PURE PROFIT, and the customers will eagerly give us all the information we want because we're making them think we've saved them 20 cents on a dozen eggs or a pair of crappy China-made shoes. It's a windfall like no other.

So what do you say? Can I count on your investment in a sure thing?

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