Re:LivingSocial: Employees' and Founders' Common Stock Now W...
by bigiain on Thursday February 21, 2013 @02:54AM
(#5256093)
And we've just re-invented loyalty schemes.
(I know at the budget conscious end of the cafe/coffee business, the "buy $n, get the $n+1th coffee free" cards do pretty well around here. Not so much in specialty coffee places though, most of them do a good job of giving free coffee to their regulars pretty often. I rarely pay for espresso shots at any of my regular cafés if I buy them at the same time as a latté/piccolo/cappuccino…)
Daily deal sites that offer a discount coupon at a price to the consumer which they have already negotiated a steeper discount for themselves, while cheaper for the discount site, is too cheap for comfort for the vendor.
This is a negative incentive for the vendor to keep going with with discounts, thus reducing inventory. further, the discounts are typically on ephemeral things that people dont NEED but just want.
The model should be flipped a bit: offer progressive discounts on repeat business. i.e.: 20% off on first visit, 30% on second, 50% on third - etc.
Incentivise repeat business.