I've posted about the "Unrecognized Risk of Coupons" because they are so irresistible to media and business looking for a linear, direct, measurable way to prove they can impact sales. In that post, I introduced the idea that couponing (like any temporary discounts, including the "free" internet market) creates a game in which the business and the customer are adversaries. Either customers win by getting more than they paid for, or, business wins by finding a way to take advantage of the customer.
For example, the business which coupons during slow periods, but charges full price when they can be assured of seasonal demand. May seem fair to the business, but the customer is thinking, next year I'll remember to load the pantry so I don't have to pay full price.
Or the free internet, where, as Alan Patrick says, ". . . someone is subsidising everything, and if you can't see the free lunch then it's you :-)" Many internet companies say they are winning that game, but who knows how many active Facebook users there really are or how meaningful the information shared is to advertisers.
People like games. Unless or until they think the adversary has an unfair advantage. When the game is between business and customers and the business takes the advantage, the customer will quit. There is no love lost and getting the customer back is very expensive. Ask the financial community what it takes to win back customers who were screwed during the economic collapse.
People like to be "wooed" too. As I mentioned in the above post about coupons, another reason they don't work is because sales is not a "linear" process. It zigs and zags. As I remember Sarah Barber, an early interactive marketer, saying, " you wouldn't ask a girl to marry you on a first date, would you?" Sales is more like the game of courtship. Businesses entertain customers because when you get to know a customer in a more relaxed environment they say things they wouldn't have told you in a formal meeting.
There are other business models that "court" people.
- When a business invests to create something of value for the customer and it shows. Think Apple. Who knew people would pay for music?
- When customers invest money, time and assets and get a return on that investment - something better than they started with. Think about a CD cabinet carefully organized by genre replaced by something the size of a business card you can listen to anywhere.
- When the game is risk-free play value. Think about the touch screen technology on the I-Phone and I-Pad.
Change the game: from an economic game like the bait and switch of couponing and most internet business models -> to the game of courting the customer, where trust is the only way to win, and returns exceed the time, money and assets shared by both business and customers.
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